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INTERVIEW: Widespread Market Recovery Continues in Minn. Residential Real Estate

Updated: 01/13/2014 5:02 PM
Created: 01/13/2014 12:32 PM KSTP.com
By: Megan Stewart

Lower supply levels, strong demand and higher prices are among the encouraging real estate developments in 2013 that brought about ongoing market recovery, according to the Minneapolis Area Association of Relators.

MAAR presented its residential real estate statistics at the Twin Cities Relators annual Housing Market Update Monday.

Low interest rates and affordable prices contributed to an 8.8 percent increase in home sales for the 13-county metro, according to the group's findings.

Consumer purchase demand increased, reaching levels not seen since 2005. As the active supply of homes for sale fell to an 11-year low, absorption rates improved to levels not seen since before 2003, MAAR said.

The group believes improvements in the local economy will boost the Twin Cities real estate market in 2014. They contributed the positive outlook to job growth accelerating, interest rates remaining attractive and an unemployment rate well below the nation’s average.

2013 by the Numbers

  • Sellers listed 72,128 properties on the market, a 9.4 percent increase from 2012 and the first gain in seven years.
  • Buyers closed on 53,087 homes, up 8.8 percent from 2012 and the highest figure since 2005.
  • Inventory levels dropped 10.5 percent from 2012 to 11,646 units, the lowest level in 11 years.
  • Months Supply of Inventory dropped 18.8 percent to 2.6 months, also an 11-year low.
  • The Median Sales Price of closed sales rose 14.4 percent to $192,000, marking a five-year high. This measure of home prices is 16.5 percent below its 2006 peak and 28.0 percent above its 2011 valley
  • Cumulative Days on Market was down 29.1 percent to 83 days, on average—an eight-year record pace.

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