Following a discouraging three-month summer slide, the median sale price for a nonforeclosed or “traditional sale” home in the 13-county Twin Cities market rose slightly in October, according to an analysis released today by the Shenehon Center for Real Estate at the University of St. Thomas’ Opus College of Business.
The St. Thomas Residential Real Estate Price Report Index, now in its fifth month, found two signs that the market is stabilizing. When compared to a year ago, the number of closed sales increased 26 percent in October. Also compared to a year ago, October’s supply of homes for sale decreased 29 percent and the number of new listings is down 17.3 percent.
“More sales and a decline in the number of homes for sale are indicative of a stabilizing housing market,” explained Herb Tousley, director of real estate programs at St. Thomas. He added, however, that “this trend will need to continue through the winter months and into the spring of 2012 as a precursor to a return to more stable market conditions.”
St. Thomas’ index tracks nine data elements to measure the health of the Twin Cities market. In addition to overall or composite data, the index distinguishes between traditional sales, short sales (homes sold for a price less than the outstanding mortgage balance), and sales where the home’s mortgage has been foreclosed.
To gauge how the market is doing, St. Thomas assigned a baseline index value of 1,000 to January 2005, a month that was near the apex of the residential housing bubble. Each month’s index can be compared to the previous month, year or market peak to understand the relative strength and direction of the Twin Cities housing market.
Here’s how things looked in October for the three categories of sales:
- Traditional sales -- The median sale price increased from $186,000 in September to $189,600 in October, or 1.94 percent. The October price is down 10.99 percent from the October 2010 price of $213,000. The St. Thomas index for October was 893, compared to 900 in September and 946 in October 2010.
- Short sales -- The median sale price decreased from $129,900 in September to $127,500 in October, or 1.85 percent. The October price is down 17.09 percent from the October 2010 price of $153,787. The St. Thomas index for October was 753, compared to 758 in September and 795 in October 2010.
- Foreclosure sales -- The median sale price decreased from $103,400 in September to $102,500 in October, or .87 percent. The October price is down 10.44 percent from the October 2010 price of $114,450. The St. Thomas index for October was 590, compared to 592 in September and 620 in October 2010.
The weakest market segment continues to be represented by foreclosure sales, Tousley said. “The percentage of distressed sales registered a slight uptick in October,” he said. “After three consecutive months at 38 percent, the percentage has increased to 40. While still at historically high levels, it is much lower than the 50-plus percent levels that were recorded last winter.”
Charts and more details can be found on the Shenehon Center’s website.
A free, monthly index via e-mail is available from Tousley at firstname.lastname@example.org.
Research for the St. Thomas index was conducted by Tousley and Dr. Thomas Hamilton, associate professor of real estate at the university.