Pending home sales in the Twin Cities metropolitan area decreased 17.6 percent in March, marking the second month of double-digit declines after a slight rebound in January.
The Twin Cities real estate market took another dip in March as pending sales fell 17.6 percent and home prices fell 15.2 percent, according to a monthly report released Tuesday by the Minneapolis Area Association of Realtors (MAAR).
During the month, 4,162 purchase agreements were signed, a 17.6 percent decrease from March 2010.
Although overall purchase activity was down 17.6 percent, the foreclosure segment saw a 31.3 percent jump in pending sales and a 29.9 percent jump in closed sales.
According to the MAAR, the comparison to last year is skewed because of the increase in sales due to the 2010 tax credit, making 2009 and 2008 more reliable comparison years. Pending sales were down a less-dramatic 5.6 percent from March 2009, and they were actually up 14.6 percent over March 2008.
Closed sales were down 3.5 percent from March 2010 but were up 2.7 percent over March 2009 and up 17.4 percent over March 2008.
Overall prices declined 15.2 percent to $140,000 largely due to the boost in foreclosure sales. Foreclosure prices decreased 11 percent to $105,000, short-sale prices decreased 6.9 percent to $134,950, and sale prices of traditional homes decreased 3.5 percent to $192,000.
“Foreclosure sales accounted for roughly 40 percent of [pending sales] and 43 percent of closings,” Brad Fisher, president of the MAAR, said in a statement. “While those market shares are in line with recent trends, they’re still higher than what we would like to see.”
The good news is that inventory levels shrunk by 4.5 percent to 24,112 units in March—the lowest March inventory count since 2005. According to the MAAR, this trend will help stabilize prices and restore balance to the market.
The MAAR, a provider of information services and research pertaining to the real estate industry, bases its reports on data from the Regional Multiple Listing Service of Minnesota, Inc. Its report analyzes 13 counties in the metro area.
—Melissa Loth
(mloth@tcbmag.com)