Real Estate Transactions Continue to Climb
Housing consumers continue to take advantage of historically low interest rates and lower prices in all but two of Minnesota’s 13 Regional Economies according to the September 2011 Minnesota Housing Report released by the Minnesota Association of REALTORS^®.

Many experts involved in the industry were optimistic about the overall trendline especially the Pending Sales figure which was up 40% when compared to transactions in September 2010.  This is the fifth consecutive monthly increase in Pending Sales.

“Pending Sales – purchase agreements written but not closed – for Minnesota residential home sales were up significantly,” said June Wiener, President of the Minnesota Association of REALTORS^®.  “Housing affordability, low interest rates and an improving employment sector all contributed to the strong results.”

Closed transactions are another positive indicator of a stronger housing market.  In September 2011 Minnesotans had 24 percent more closings than we experienced in September 2010.  Homebuyers have closed on more homes year-to-date than in the previous year.

“Improvements in the closed transaction figures are important because it indicates that buyers are interested in moving forward with homeownership,” said Wiener.  “Low interest rates, a very affordable housing inventory and strengthening confidence in Minnesota’s employment sector are all contributing to the rebound.”

Many Minnesota homeowners are concerned about the value of their property and in September the year to date comparable numbers still looked disappointing.  Statewide, Median Sales prices were down 6.6% compared to values in 2010.  The median is the midpoint, indicating as many transactions above as below the stated price.  In August the median home price was $140,000.

“This is not an uncommon situation when the market is stabilizing,” said Wiener.  “Individual monthly prices can fluctuate as housing consumers look for bargains and sellers price their properties competitively with others on the market.  In September, housing inventories fell 13% with days on the market at 130 days.”

Lower home values do mean positive things for housing affordability.  Minnesota’s Housing Affordability Index (HAI) increased in August as low interest rates and distressed properties made housing more affordable to consumers seeking residential property.  The HAI measures the median income of a Minnesota family compared to median home price.  When the index measures 100, the median family has 100% of the income necessary to qualify and purchase a median priced home.  Statewide the HAI is at 134, which means the median family income is 137% of the level required to purchase a median priced home.  Historically low interest rates have helped keep housing affordable to majority of Minnesota families.

“Affordability is much higher in individual market areas than it is statewide,” said Wiener.  “This is because of the number and price of properties for sale in the metro area and an overall lower income in Greater MN.”