The Twin Cities housing market continues to struggle. Both the number of sales and the median sales price of homes in the area dropped in the month of August, according to the Minneapolis Area Association of Realtors.
Pending sales in August were down over 30% compared to August 2009. However, that decrease was the smallest it has been in about three months. The median sales price of a home in the Twin Cities was $172,165, down 1.6% from last year. Though foreclosures and short sales drag these numbers down, traditional sellers saw a 9.2% price increase for their homes.
There are now more than 27,000 active sales listings for homes in the Twin Cities. Inventory of homes on the market grew by almost 9% during August. That is the biggest increase in inventory since February 2008.
As housing inventories increase, Brad Fisher, president of the Minneapolis Area Association of Realtors, said in a press release that the expired federal tax credit for home buyers has led to a decrease in demand for homes. The double-whammy has resulted in a drop in home prices.
“There are just more sellers than buyers and the buyers are able to negotiate, especially if you get sellers that are fairly desperate,” Pat Paulson, president-elect of the Minneapolis Area Association of Realtors said. “It’s a buyers market they have the upper hand.”
Minneapolis and Saint Paul saw fewer sales but higher prices in August compared with a year ago, according to the St. Paul Area Association of Realtors. Sales dropped 39% in St. Paul, to 241 while the median sale price rose 2% to $150,675. In Minneapolis, sales dropped 41% to 336 and the median rose 21% to $222,804.