Twin Cities home sales dropped off in December, but the housing market still finished 2013 in generally stronger shape than the year before.
The total number of completed sales for the year was up about 9 percent compared to 2012, and the median sale price reached a five-year high of $192,000, the Minneapolis Area Association of Realtors reported Monday.
Sales in the first part of the year were brisk as pent-up demand unleashed a wave of buyers who'd been holding back, said Emily Green, president of the Realtors group. They slowed in the winter months as buyers looking for an investment property receded from the market said Green who expects the trend to continue.
"We're going to see investor activity tapering off in 2014 because of the lack of the inventory that they like, which is the low-priced foreclosure," she said.
The median price increase reflects the changing composition of the Twin Cities housing market, with fewer sales of low-priced foreclosures and more sales of homes priced above $200,000, said Michael Hunstad, president of the St. Paul Area Association of Realtors.
"The $200,000-$300,00 price range, which is more aligned with the traditional sellers, we're seeing more activity in that market," he added.
Foreclosures and short sales still comprise a historically large portion of sales -- they were 26 percent of all completed Twin Cities home sales last year. In a normal market distressed properties make up roughly 5 percent.
However, just a couple years ago distressed properties made up as much as half of completed sales.
With fewer foreclosures coming onto the market, the supply of homes for sale hit an 11-year low in 2013. And the amount of time a home is on the market prior to a sale keeps decreasing. The average is now 83 days, or under three months.