Home sales stubbornly continue to increase through October

Home sales stubbornly continue to increase through October

Minneapolis, Minnesota (November 12, 2008) – According to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc., there were 3,480 pending sales in October, a surprising 6.9 percent increase over October 2007. Closed sales were up 12.0 percent from last year for the same time period comparison.

Year-to-date, pending sales are only 200 units behind this time last year. If these monthly year-over-year increases continue through the remainder of 2008, we will likely end the year with a higher sales count than 2007, something which seemed impossible at the outset of the year when sales activity was considerably slower.

"With weak consumer confidence and a fluctuating stock market, the fact that sales activity has shown a slight improvement indicates that people are tired of sitting on the fence," said Kevin Knudsen, MAAR President.

Consumers are finding opportunities in the more accessible price ranges. Of October's total pending sales, 40.7 percent were listed below $150,000. The increased market share of these bargain-priced properties led to further declines in overall median home prices.

As a result, the October median sales price for the entire 13-county metro area was $180,000, down from last year by 18.2 percent.

Lender-mediated home sales, which accounted for 48.8 percent of all sales, posted a median price of $146,000. This is a drop of $11,000 from last month and a decline of 16.7 percent from last year. Traditional properties had an October median sales price of $223,000, a decrease of 1.4 percent.

The overall decline in home prices helps offset a recent increase in mortgage rates, coaxing the November Housing Affordability Index (HAI) on its upward trajectory by two points over last month to 161. This is an impressive 16.7 percent higher than where it was at this time last year, and back up at extremely healthy levels following a few years of unsustainably low affordability. The national HAI, provided by the National Association of REALTORS®, is currently at a less-healthy figure of 123.

"What's a safer investment right now—housing or the stock market?'" asked MAAR President-Elect, Steve Havig. "The increase in sales activity seems to point to housing for many folks around here."

-MAAR