Minnesota Real Estate Market Update

There is some good news on the horizon in regards to the real estate market. It looks like the incentives to buy homes from the government, i.e. the homebuyer tax credit has been paying off. According to the National Association of Realtors (NAR), home sales (including condos, co-ops, residential house, etc) have been gaining momentum.

Real estate sales have risen close to 7 percent from February of 2010. Compared to March of 2009, the home sales have increased over 16 percent. This is a tremendous improvement considering the economy we are in.

Total houses available for sales also rose a little over 1.5 percent. Unfortunately, a lot of these houses for sale are due to the inventories available from foreclosures. According to NAR, foreclosed and distressed homes were sold for discounts of about 15 percent. These homes accounted for around 35 percent of all homes sold in March.

Another great indicator that the homebuyer tax credit is working is that first time home buyers made up over 44% of the March buyers. This is up from 42% that was seen in February. The national median price for a house was over $170,000. In the Midwest, the average price was under that at around $139,000. However, this is an increase from last year.

Unemployment rate has had a huge factor in the housing market. The national unemployment rate hovering over 9% is at higher than the normal rate of around 5%. However, Minnesota has a lower unemployment rate of 7.4%, which is lower than the national rate. This is one of the reasons why Minnesota has one of the lower foreclosure rates in the nation. In fact, according to RealtyTrac, the number of foreclosures in Minnesota is down 13% from

February of 2007 while foreclosures in a lot of states are going up.

Coupled with low foreclosure rates and lower than average unemployment rate, Minnesota has one of the better housing markets in the nation. Lawrence Yun, NARs chief economist said that, With home values stabilizing, a revival in home buying confidence will likely help the housing market get back on its feet even as the tax credit impact disappears. Hopefully, this is true and we can continue to see the real estate market get back on its feet.

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