Metro home prices are stableby Annie Baxter, Minnesota Public Radio
St. Paul, Minn. — Twin Cities Realtor associations say the latest housing data offer further proof that home prices are stabilizing.
Distressed properties tend to drive down prices. The Twin Cities median home price in November was $170,000, about 3 percent lower than it was a year ago. But it's the smallest year-over-year decline in more than two years.
But Jeanne Boeh an economist at Augsburg College is not altogether impressed. She's worried foreclosures could still crimp home prices.
"The problem is, we keep adding to the foreclosure pipeline," Boeh said. "What we need is to have the foreclosures to be a very small part of the market. They're still too much of a factor."
Boeh notes that the chief economist at Moody's Economy.com is predicting banks will put more foreclosures on the market early next year. That would drive prices down further. Moody's projects Twin Cities home prices will drop another 5 percent in 2010.
Brad Fisher, president-elect of the Minneapolis Area Association of Realtors, said the median price indicates a recovery in the housing market.
"When you look at the median sale price over the past four to five months, it's really been within a very tight range. So we're not seeing the continual erosion like we were earlier in the year," Fisher said.
He said the new move-up-buyer tax credit isn't having an effect yet.
"What will happen most likely as we cross into the first of the year, as our market always starts to accelerate, we will then see that have more effect," he said. "We have not seen it yet, being that this program's been out for three weeks roughly."
The number of home sales completed in the Twin Cities in November spiked 67 percent compared to the year before.
Fisher attributes the spike to the anticipated expiration of the first-time homebuyer credit. The credit has been extended through April.