According to the 2012 market statistics from the Minneapolis Area Association of Realtors, in the metro area, there were 48,622 sales in 2012, a 17 percent increase over the previous year with the median price of those sales rising 11.9 percent to more than $168,000.

Sales increased in almost all areas of the metro, though prices weren’t up evenly. Most sale and price gains were in Minneapolis, St. Paul and several inner-ring suburbs where supplies are limited and options for new construction are few. In Minneapolis, sales were strongest in the University neighborhood, up nearly 40 percent, and in St. Paul sales were strongest in the Summit Hill neighborhood, up 64 percent.

The real estate market is improving but it still faces challenges such as how long mortgage rates will remain low, the unemployment rate, the number of distressed properties on the market and appraisals that are coming in too low for the current market prices. Despite these challenges, Realtors expect closings to increase 4 to 8 percent in 2013 and that prices will rise 8 to 12 percent.