Number of pending home sales last month shows 13 percent increase over May 2010by Bill Catlin, Minnesota Public Radio
St. Paul, Minn. — The Twin Cities real estate market is showing signs of a rebound. The number of pending sales -- where there's a signed purchase agreement -- was up 13 percent in May over the same month last year.
The improvement stems, in part, from the end of the federal homebuyer tax credit in April of last year. Sales in May then dropped off. That makes last month's gain appear more dramatic. The improvement comes after a string of bad housing reports.
Real Estate professor George Karvel of the University of St. Thomas says the May uptick is a function of supply and demand.
"The improvements are generally a consequence of working through the excess housing inventory," Karvel said. "It just takes time. It'll be absorbed as new families are formed and as the population continues to grows and eventually we'll get down to the bottom of that pickle barrel and we'll be OK."
The mix of homes for sale also improved. Distressed properties made up only 30 percent of all new listings. That was the lowest level since April of last year.
Karvel said he's waiting for more reports before drawing any conclusions.
"You can't take any one month data and extrapolate either recovery or decline or anything else from that. You have to look at a series of months and if the data progressively get better then that's positive."