Twin Cities real estate showing improvements

by Annie Baxter, Minnesota Public Radio

St. Paul, Minn. — The end of 2011 brought some improvements to the Twin Cities residential real estate market.

Signed purchase agreements and completed home sales enjoyed their strongest December since 2005.

The rate of decline in home prices also seems to have moderated somewhat last month. The median home sale price in December fell to $145,000, down about 6.5 percent from the same month in 2010. That was the slowest year-over-year price decline since last January.

However, lender-mediated properties, which sell at steep discounts, continue to push prices down. Last year, those distressed properties accounted for 50 percent of all completed home sales. That's still well above the 10 percent range typical of a healthy market.

Still, local realtor associations say they're cheered by rising sales and declining inventories. In 2011, the supply of homes for sale fell back to a level consistent with a balanced market.

"I think the most significant trend we finished the year on was the reduction in inventory. As that gets reduced, and we start to have people compete for that, that's ultimately going to lead to price increases," said Richard Tucker, president of the St. Paul Area Association of Realtors.