The Twin Cities housing market continues to return to normal, although the number of transactions fell in the month of May.
Overall transactions fell 11.4 percent last month to 4,868 sales in the 13-county metro area compared to last May. Pending sales were also down 9 percent to 5,260, according to the Minneapolis Area Association of Realtors (MAAR).
"Behind what seem to be lagging sales numbers is really a return to a more normal and stable market, where prices rise at sustainable levels and traditional sales make up the lion's share of the transactions," Edina Realty said in a news release.
The real estate agency notes that the dip in sales numbers is due to a major decline in distressed properties – foreclosures and short sales. Closed sales of distressed homes accounted for just 16 percent of all transactions, which is the lowest proportion in the metro since May 2007, Finance and Commerce reports.
Traditional sales rose .7 percent, and continue to be in higher demand, compared to the last several years, Edina Realty notes.
“It’s almost like a market segment that we really got used to is disappearing, which is so good for everyone,” MAAR President Emily Green told Finance and Commerce. "The market is tightening for people looking for affordability, but loosening for people who are looking for choices."
The Star Tribune notes that one-fifth of all houses sold for more than the asking price last month and one-fourth sold within two weeks of hitting the market.
The median sales price increased 8.2 percent to $210,000 from $194,000 in May 2013, according to MAAR statistics. The median home price started at $179,400 in January, while in late 2012, median prices were closer to $160,000, Finance and Commerce notes.
The number of days a home was on the market was down 7 percent to 80 days compared to 86 days in May 2013, MAAR says. In 2012, a house spent 124 days on the market on average.
“For the good houses, it’s very competitive,” Green told Finance and Commerce. “If you are priced right, you are going to get some serious action on your house.”
Although the number of houses on the market has increased, it isn't keeping up with demand in some areas and at some price points.
"Yes there's more inventory, but not in all areas or price points," Green said in a news release. "The lack of supply is really starting to weigh on consumers and on sales numbers. This market has been supply-constrained for long enough, but the trend is moving in a positive direction."
The Star Tribune notes that there's fierce competition to find homes in communities with coveted school districts and that are nearby shops, parks and jobs.