Twin Cities Realtors: 2010 worst in 8 years; 2011 should be slightly betterby Elizabeth Dunbar, Minnesota Public Radio,
Dan Olson, Minnesota Public Radio
St. Paul, Minn. — The Minneapolis Area Association of Realtors released 2010 numbers on Thursday showing the worst sales year in eight years.
The Minneapolis association, along with the North Metro Realtors Association and the St. Paul Association of Realtors, said they expect only slight improvements in 2011.
Although the median Twin Cities home price was up slightly from 2009 to 2010, the groups said a federal homebuyer's tax credit drove sales until it expired, causing a "boom-and-bust" market.
"These are fairly small increases, so what it demonstrates is probably more stability -- a market that's likely to grow slow and gradually," said Pat Paulson, president of the Minneapolis Area Association of Realtors.
The Realtors said 2010 was also defined by 55-year-low mortgage rates, "high affordability levels" and a sluggish economic recovery.
Paulson said home sales prices and listings continue to be greatly affected by a significant number of foreclosed homes still coming into the market.
The median sales price of homes in the Twin Cities area was $169,900. About 37,000 homes were sold in 2010, which was the lowest level seen in eight years. The number of new homes introduced to the marketplace was also the lowest level in eight years.
As for 2011, the Realtor groups expect listings to increase by about 3 percent and sales to increase by about 6 percent. They expect the median price to go up to $175,000, which would be a 3 percent improvement.
"If we can avoid more job losses, which often result in more foreclosure inventory, we should see improvement as we progress through 2011," Cari Linn, president-elect of the Minneapolis Area Association of Realtors, said in a written statement.
The Twin Cities has one of the highest rates of homeownership in the nation and he predicts that trend will decline over the long term.
"That's probably not a bad thing. We probably reached points that were too high with the financing that was too easy, so in the long run it's probably stabilizing and healthier," Paulson said.
Elizabeth Dunbar is a general assignment reporter for MPR News.