August was a hot month for home sales

Median price rises to record $222,000



By Neal Gendler, Star Tribune Staff Writer

Published September 14th, 2004 in the Star Tribune


Twin Cities-area home sales hit a new record for August, as buyers took advantage of low interest rates and a large and still-growing supply of homes.

The median price of closed sales -the point at which half sold for more, half for less - reached a new high of $222,000. However, appreciation slipped to 6.9 percent, according to Regional Multiple Listing Service data released Monday. Appreciation this year peaked at 9.18 percent in June. The Minneapolis Area Association of Realtors expects appreciation to continue sliding for the next few months and to stabilize at about 5 percent until spring, President Ann Brotkhouse said. "The market normally slows in fall, we have a good supply of listings, and there's concern that the Fed will raise short-term interest rates in a way that eventually might affect mortgage rates," even though they're tied to 10-year Treasury notes.

With so many listings, "houses selling now are priced for a competitive market," said Decklynn Theisen, president of the Southern Twin Cities Association of Realtors. "Properly priced homes bring multiple offers; overpriced homes are getting no activity."

The market has a 4 1/2- month supply of homes for sale; a five - month supply is considered balanced between buyers and sellers.

Listings continue to pour in, with 33,912 listings of all property types at month's end -34.28 percent ahead of August 2003 and 11,406 above the five-year average. The total includes 25, 110 single- family homes.

Total listings appear to be a record, said association CEO Mark Allen. "Part of it is that we're getting more outstate listings than before," he said. “About two years ago, we began a policy that made it easier and less expensive for brokers outside the metro area to submit their listings into our system" to give them more exposure.

"The other reason is that there are more houses," he said. "We keep building new ones" to accommodate a growing population, he said: 'a week ago, the Metropolitan Council reported a 99,000 gain - 46,000 households--" from the 2000 census to the April 2003 estimate. The main reasons for that growth are jobs and quality of life in this area."

Pending sales - those in which offers have been accepted but the transactions have not yet closed - reached 6,1671ast month, 7.91 percent ahead of August 2003 and 13.7 percent ahead of the five-year average for the month.

Closed sales totaled 6,440, up 2.68 percent from a year earlier. Value of sales reached $1.69 billion, up 8.76 percent from $1.56 billion in August 2003.

For the year so far, the 39,046 closed sales are 5.16 percent ahead of the 2003 period. Value of $9.9 billion is up 12.66 percent and 72,138 new listings processed are ahead 16.18 percent. Some of those are re-listings of homes for sale earlier.

August's strength led the Minneapolis association to revise its annual sales forecast upward. It now expects 58,000 closed sales, up 2.6 percent from the record 56,528 in 2003.

Neal Gendler is at ngendler@startribune.com.



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