Perhaps we will look back on 2010 as the year we pressed 'reset' in the real estate market. It likely comes as no surprise that the number of real estate closings last year retreated to levels from years back, but how far back? How about nearly 20 years?!
Looking at total sales over the last 30 years shows that after the peak of 58,233 closings in 2004 the number of annual sales dropped precipitously in 2006 and 2007. Many thought we had hit bottom in 2008, but after sales jumped up during the federal homebuyer tax credit in 2009, they fell back again in 2010 to 37,365… even lower than 2008 totals. Hopefully this will be our 'reset' number and we will grow again from here as we move into slow, long-term recovery mode.
Looking at sales data by month, 2010 looks like a tale of two separate markets… as indeed it was.
The first half of 2010 was buoyed by the last gasp of the tax credit, and the last half came crashing back to reality. In fact, the monthly sales data for the last four years is all over the place due to various external influences. Perhaps in 2011 we will finally get back to a new 'normal'.
If the number of annual closed sales adjusted back about 20 years, how far back did average sale price adjust? As painful as it has been, average prices have adjusted back only about half as far… about 10 years back, to levels between 2001 and 2002.
The progression of yearly averages was much smoother for price than number of transactions with prices peaking in 2006, two years after the peak number of closed sales. The slight bump up in 2010 average price may be a sign we are already on the road to recovery when looking at the market as a whole.
Although prices for individual properties have still been falling as evidenced by the dropping percent of original list price received at sale and December median sale price back to February levels, sales overall are shifting up to higher price ranges again… a good sign that we are moving toward more 'normal' market conditions.
Both sale prices and months supply of inventory show distinct differences when compared by property type. This is a great time to be a condo buyer!
Average condo price is down about 10% compared to last year at his time and their months supply of inventory is not only significantly higher than for both houses and townhouses, it is up 12.5% compared to last year.
The figures above are based on statistics for the combined 13-county Twin Cities metropolitan area released by the Minneapolis Area Association of Realtors. Click here for local reports on 200 metro area communities.
Sharlene Hensrud, RE/MAX Results - Email – Minneapolis – St. Paul Real Estate Market Information
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