Twin Cities housing: Malaise

We’ve read a lot of headlines the past couple years about the Twin Cities housing market. But this one today pretty much sums it up.

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Sales Down, Inventory Up, Prices Flat

It’s startling because it comes from the Minneapolis Area Association of Realtors. Even in the toughest markets, Realtors seem perpetually upbeat. Not these days.

“While there have been modest rays of hope in recent economic news, it has not been enough to infuse energy into the realty market,” Pat Paulson, the group’s president-elect, said in a prepared statement.

The details won’t shock MinnEcon readers.

We’ve reported on the hangover the market expected once the federal home buying tax credits expired in April, the rising inventory of houses for sale at a time when it should be falling and the reality that housing starts won’t save the economy this time around.

And while things aren’t great, a look at this Realtors chart reminds us that things were worse a couple years ago:

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The chart looks at year over year changes by month. So the blue .6 on the far right indicates median sales price in October 2010 was up .6 from October 2009.

Markets recover. The troubling thing is how long this market’s been bumping along the bottom. Like other parts of the economy, we’ve been told that liftoff is imminent. But there’s no ignition. When does that happen?

Eleven months ago today, the Minneapolis Realtors group pronounced the market on “recovery road.”

The November median sales price of $170,000 was a slight increase from October — a rare occurrence in this month that typically marks the beginning of a temporary winter price swoon. This mark is 2.9 percent behind last October, the lowest year-over-year price decline in more than two years.

“This is the surest sign we’ve seen yet that we’re on recovery road,” said Steve Havig, President of the Minneapolis Area Association of Realtors. “We’ve seen sales growing for almost a year and a half, and prices are starting to reflect that, particularly in the lower price ranges.”

For now, at least, those words feels like ancient history.

Let’s hope it’s not 1979.

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