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.
According to the Remax National Housing Report, November was the 17th consecutive month of higher year over year sales with a 15.7% increase in November 2012 over November 2011. The average number of homes for sale dropped 29.1% from last November, making it the 29th consecutive month to month drop. Pending home sales, a measure of home contract signings, shot up in the month of November, reaching its highest level on record in two-and-a-half years. It’s also the third consecutive month of sales increases. The median sales price also increased for the 10th consecutive month to $163,750, a 6.9% increase.
According to Freddie Mac, the 30-year, fixed-rate mortgage hovered at 3.35% for the week ending Dec. 27, down from 3.37% a week earlier and 3.95% last year. The 30-year fixed-rate mortgage averaged 3.66% for 2012, the lowest annual average in at least 65 years.
The last time the housing market was healthy without stimulus was February 2007. The National Association of Realtors expects to see a stronger housing market in 2013.
Right now it is looking like 2012 is on the way to an increase in new construction as building permits are up! Estimates say that we may see a 10-12% increase in new construction this year which would be great news! In January, Minneapolis led the way with the number of building permits issued followed by St. Paul, Hudson, WI, Eagan and Maple Grove. Click here for more.