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Annual Report on the Twin Cities Housing Market FOR RESIDENTIAL REAL ESTATE ACTIVITY IN THE MINNEAPOLIS AREA Association 13-COUNTY TWIN CITIES REGION of R E A LTO R S® It was a banner year for residential real estate across America. Distressed PropertieS Foreclosures and short sales Nearly every metropolitan housing market embarked upon or exerted far less downward pressure on prices,partly due to continued along the road to recovery. Local and regional recovery within those segments but mainly because of their markets once burdened by excessive supply levels and heavy dwindling market share. Plummeting from 50.0 percent to 26.4 foreclosure loads have given way to multiple-offer situations, percent in two years,the percentage of all sales that were in homes selling in record-low market times and prices rallying to financial distress is on the decline. In this improving economy, multi-year highs in many cases. fewer homeowners are defaulting,which means banks are listing fewer distressed homes,which means fewer are closing. The year 2013 brought tectonic shifts to housing's landscape. That's a good thing,since these listings tend to sell for Many local markets transitioned from buyers' markets to between$130,000 and$140,000 compared to$220,000 for sellers' markets.Closed sales are up. Days on market until sale their traditional counterparts. is trending downward.The percent of list price received at sale is trending higher.Sellers even managed to post a notable gain. PriCeS We closed 2013 with a 14.4 percent median price increase compared to 2012.At$192,000,the median sales Low(but upwardly mobile)mortgage rates,still affordable price is proudly standing at a five-year high. Prices are now just prices and a better jobs scene created a triple play that helped 16.5 percent below their 2006 peak but 28.0 percent above bolster consumer confidence and galvanize local markets. their 2011 valley.Watch for move-up buyers,fewer Rising prices have the dual benefit of further cementing foreclosures and new construction to impact prices in 2014. confidence as well as lifting homeowners out of underwater Prices are likely to grow but at a tempered pace. positions, which should create more inventory in 2014. Housing is closely tied to economic health. Households with gainfully employed wage earners are more likely to make bigger sales Favorable rates, more employment opportunities and a purchases like a house or a car.When gauging the housing rising stock market mixed with rising prices, rising rents and market, it's important to closely track job growth and shrinking inventory left buyers with a sense of empowerment unemployment. and urgency. Unsurprisingly, buyers closed on 8.8 percent more homes in 2013 than in 2012,finishing at 53,087 for the "A nation of homeowners is unconquerable."So said FDR.The year.That's the highest number of sales since 2005. Not only American Dream was alive and well in 2013,as U.S.citizens was there more demand in 2013, but the product mix of those proved that they still want a stake in the action.With countless additional sales also skewed toward higher-priced traditional benefits to families,cities and regions,homeownership homes. In 2014, buyers who endured foreclosure could continues to be the fabric of our communities,and we expect become ready to purchase again.Also watch for signs of life the national and local housing morale to remain sharp in 2014. among move-up buyers and in the upper-price echelons. Investor activity should continue to subside. Listings At 11,646, inventory levels fell throughout most of Table of Cont@IItS the year,finishing 10.5 percent below 2012's tally.That is likely $ Quick Facts to change in 2014 as recovery continues. Rising prices should continue to unlock additional inventory.A better labor market 5 Property Type Review meant more stable household finances.There was pent-up demand remaining from the economic downturn,and sellers 6 Distressed Homes Review were evidently eager to make a move.Sellers regained a lot of 7 New Construction Review ground in 2013,listing 72,128 properties or 9.4 percent more than 2012.They must have caught wind of the robust demand, 8 Area Overviews rising prices and speedy market times.And many of them got 17 Area Historical Prices top dollar for their home-in some instances, an amount greater than their list price. 26 Historical Review Click on desired metric to jump to that page. Current as of January 10,2014 Sponsored by Royal Credit Union(www RCU org) All data from NorthstarMLS Powered by 1 OK Research and Marketing 2 26