Minneapolis Housing Market Seeing stability

Foreclosure, short sale, and bankruptcy are all words that many people became familiar with as foreclosure rates took a sharp turn just five years ago. The housing market went bust, the economy went down the drain, and many individuals were being pushed out of their homes because of job loss, ballooning mortgage payments, and so much more.

That is why many throughout Minneapolis are sighing a sigh of relief as the Minneapolis and St. Paul housing market sees some stability.

While the Twin Cities housing market continued to see a wind down in November, it has much to do with the reduction in the number of foreclosures and short sales, according to a report by the Minneapolis Area Association of Realtors.

For the first time in seven months, new listings were lower, decreasing a total of 5.3 percent to just 3,900. This is very good and it is amplified by the fact that there was an increase in traditional listings of 11.1 percent over the same period of time.

In the meantime, buyers closed on over 3,700 homes, which is an almost 6 percent drop over 2012, although traditional sales saw an increase of 13.6 percent.

The president of the Minneapolis Area Association of Realtors has said that what they are seeing is what they want to see. Residential real estate is becoming stronger as there are fewer short sale and foreclosure properties in the system. There is also the fact that lender-mediated activity is not as high as it once was.

Although the traditional listings increased 11.1 percent, it was still not enough to offset the short sale and foreclosure listings, which dropped 42.1 percent and 36.2 percent respectively.

Furthermore, traditional closed sales increased 13/6 percent compared to short sale and foreclosures that dropped 57.6 percent and 34.7 percent respectively.

One reason why foreclosures and short sale homes have been decreasing is because of increased investor interest. Because of the number of individuals who lost their homes during the housing bust, there was and still is an increase in demand for rental properties. Investors use foreclosures and short sales as an opportunity to obtain affordable properties, flip them, and then sell them to buyers for a significant profit. This is a trend that saw an increase in the Twin Cities after the economy started to improve.

The median price for a traditional home clocked in at $217,000. The average value for a foreclosure home was $133,851. The average value of a short sale home averaged around $150,000.

While opinions can vary on the recovery, such as some saying that it is stalling, others state that the reality is the gain in momentum in job growth and fewer distressed property listings. It is expected that this trend will increase into 2014. While the numbers for the next year are expected to be good, they may not see the steep upticks that were seen in 2013 as the housing market finds its footing and levels off.