Twin Cities home prices continued to rise in January.
The median sales price for homes climbed to $179,900, the Minneapolis Area Association of Realtors said Wednesday. That's about 12 percent higher than January last year.
While prices rose, the number of monthly home sales plunged in January. The group said that drop was due to a shift in the local housing market -- far fewer distressed properties are coming online and selling, which pulls down sales numbers.
"As foreclosures and short sales move out of the system, it may temporarily bring down overall listing, inventory or sales activity, but the resulting move back toward a market of traditional properties is positive," association president Emily Green said in a statement.
Bad weather could cause the real estate market to freeze up for a couple months, but it's expected to thaw in the spring, said Herb Tousley director of real estate programs at the University of St. Thomas.
With the economy improving, people who hunkered down with friends or family during the recession may be looking for a house of their own, and that will boost "household formation rates," Tousley added.
"We think that's really an important indicator of future housing demand," he said.
"People that have been living with their parents are moving out to find their own place. People that have been doubling or tripling up, now that economic conditions are better, they feel a little bit more certain about that," Tousley added. "They're out getting their own places now."
Here are highlights from the Realtors' statement:
Although new listings declined 11.5 percent to 4,247 overall during January, seller activity is likely to pick up during the spring and summer months. More importantly, traditional new listings rose 7.9 percent over the same period, while foreclosure and short sale new listings fell about 50.0 percent each.
Buyers closed on 2,536 properties overall, a 12.8 percent decrease from last January. Once again, traditional sales were up 6.2 percent while foreclosure sales and short sales fell 34.7 and 54.3 percent, respectively.
The median sales price for the metro increased 12.4 percent to $179,900, marking a 23rd straight month of year-over-year median price gains. Last January, foreclosures and short sales comprised 42.2 percent of all closed sales. In January 2014, these segments made up 29.4 percent of all sales. Traditional homes are selling at a median price of $212,500; foreclosures for $130,500; short sales for $138,900.
On average, homes spent just 93 days on the market.