Real Estate Market is Up

By Kevin Allenspach, St. Cloud Times, Minn.

Feb. 04--The Central Minnesota real estate market warmed up in 2011 as pending sales jumped more than 12 percent and new listings declined 6.6 percent from 2010.

According to year-end figures from the St. Cloud Area Association of Realtors, the results really began to show in the second half of last year, when completed sales jumped almost 44 percent from July through December. There were 610 homes sold during that period in 2011, compared with 424 in the last half of 2010.

Heading into 2012, there was an inventory of 831 homes for sale, the least in more than eight years -- since well before the housing crisis plunged the nation into the Great Recession. That's equal to about 8 1/2 months of inventory, the lowest since early in 2007.

"Those are the things we want to see," said SCAAR President Jerry Westhoff, a Waite Park-based representative of Edina Realty. "That indicates it's a more neutral situation right now as opposed to just being a buyer's market."

There were a few prices to pay, however. On average, it took 15 more days on the market -- about 166 total -- for homes to sell in 2011 compared with 2010. And the average and median sales prices both declined year-over-year. The average price of a home sold in the area last year was $142,711, down from $148,252 in 2010. The median price was $126,500, down from $135,000.

"That reflects what's been selling, and there's no doubt the lower end of the market is what's been selling," Westhoff said. "There are a lot of people on the sideline with homes of higher value or who want to buy homes of higher value. The last thing you see in a recovery is a rise in that median and average price. Most of the other indicators are moving in the right direction, so there's cautious optimism that we'll start to see those prices going up before long."

Sellers were perhaps more aggressive, though, as the percent of original list price received was virtually unchanged. And the housing affordability index also reached its highest level. It was an average of 216 last year, meaning median household income was 216 percent of what was necessary to qualify for the median-priced home under the prevailing interest rates.

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