Twin Cities median home price increases
The Star Tribune reported today that the median single family home price is $169,800, up 11% from April of 2009. The local associations released these figures on Wednesday of this week. What does this actually mean to people looking to buy and sell in the Twin Cities market? The simple answer: It depends. This is obviously positive news but should be taken in context. The reduced numbers of foreclosures in the market this year has significantly helped the cause. Many industry insiders feel this is a strong sign the market is stabilizing.
“This sustained pattern of median price growth is reassuring and may indicate stability in the market,” said Brad Fisher, president of the Minneapolis Area Association of Realtors. But given that the federal tax credit of up to $8,000 for new and repeat home buyers expired at the end of April, Fisher was reluctant to declare any long-term victories. “The jury is still out on how the market will look several months after the credit has expired,” he said.
Clearly the success of the market the rest of the year will be dictated by the supply of new foreclosures. Without a doubt there are large volumes of mortgage defaults still happening everyday. The differences in this year over last is how the defaults are being managed. The banks and government have made continuous efforts to refine programs to help the foreclosure crisis. The other obvious development has been how homeowners are handling default. Early on many of the defaults ended in a full blown foreclosure as troubled borrowers decided to simply walk away and not deal with the situation. Today we are seeing more homeowners realize that they need to be considering how that impacts their future over the next 10 years and as a result you are seeing more people decide to go for a short sale which has a far less impact on them long term. The net benefit is usually the property will end up selling for more than a traditional bank owned sale which lessens the blow to other sellers in the neighborhood and surrounding area.
The most important thing to remember is that each neighborhood, suburb, and price range is seeing different things and you should examine the data at a micro level when deciding whether to buy or sell this year.