Home sales up 27.9% in Central Minnesota

Written by Kevin Allenspach
If home sales are one of the last signs to rise following an economic downturn, we may be on the road to recovery.
Closed home sales in the central region of Minnesota rose 27.9 percent year-over-year in October, according to the Minnesota Association of Realtors’ monthly housing report. That was higher than the 23.6 percent increase statewide and trailed only the seven-county metro region (34.3 percent) among areas with the greatest improvement.
“I don’t know if our (market) went up as high as the metro during the peak times, so we may not have as far to go to make progress,” said Bob Faundeen, president of the St. Cloud Area Association of Realtors. “Last year, there was a tax break that impacted home sales for the first six months. We’re not approaching that activity, but we’ve been steady through most of the year.”Through September, the most recent data available from SCAAR, closed sales were up 60.3 percent year-over-year. Pending sales were up 20.3 percent, the median sales price rose 1.8 percent, new listings declined 5.3 percent, and the inventory of homes for sale dropped 19.3 percent. In fact, the inventory fell below 900 properties for the first time since 2004.Statewide, homebuyers have closed on more homes through October than in all of 2010.
“What we’re experiencing is an increase in confidence about owning a home in Minnesota,” Minnesota Association of Realtors President June Wiener said in a statement. “Consumers are seeing lower unemployment, low interest rates and a variety of affordable homes on the market as reasons to buy now.”
It’s coming at a cost, however. The statewide median sales price was down 6.7 percent compared with last year. The October median sales price was $140,000. Statewide in October, houses were on the market an average of 120 days. Inventory also has decreased, with new listings down 10.3 percent compared with October 2010.
Faundeen says a home’s value in the real estate market should not be confused with lower tax valuations sent out recently by area counties. He said area agents have fielded numerous calls expressing concern at how these valuations have dropped, and yet some property owners’ taxes have risen. The Legislature recently repealed the homestead market value credit and replaced it with a homestead market value exclusion.
Tax increases still might occur for several reasons. State money is no longer reducing total taxes. The reduction in taxable value increases tax rates and shifts the burden to those with higher property values.