Bloem Johnson Blog

Pending sales in the 13-county Twin Cities metro area were down 3.3 percent compared to last November and closed sales were down 39.1 percent for the same period. This simply reflects the seismic impact brought about by the home buyer tax credit of 2009.

The $165,700 median sales price was a 2.5 percent decrease from last year. After the first seven months of 2010 experienced year-over-year price gains, November was the third month of the last four to show year-over-year price declines. That said, prices have been relatively stable for five consecutive months.

Contrary to median price declines, average sales price was up 9.5 percent as activity in the upper price brackets has improved in recent months. Home sales at higher price points affect the average more so than the median.

People are shopping for bargains. The appeal of foreclosures and short sales for budget-conscious buyers continues to compress median prices, even as the high end of the price spectrum is clearly in play. It’s also worth noting that prices typically decline in winter compared to the warmer months.

The total dollar volume of closed sales in the metro was down 33.3 percent from November 2009 to arrive at $570 million. Importantly, last November represented the tail end of the 2009 tax credit surge and prospective buyers responded favorably to that significant market incentive.

The economy is sending mixed signals with increased retail traffic and stronger private sector job growth, offset by stubbornly high unemployment. We are anticipating regular, seasonal challenges in the coming months, but we also expect some metrics to improve in the spring.