Twin Cities housing values: a long way back

Don’t look at Zillow.

Or, rather, don’t look for your house on the real estate site to see its current value. I did with mine and it’s not pretty.

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We’ve written a ton over the past year about the ongoing housing malaise in the Twin Cities real estate market. Things really flamed out after the federal tax credits ended in the spring, resulting in the worst year for housing sales in eight years.

We’re left looking through the pieces of the market for hopeful signs for 2011.

The Minneapolis Area Association of Realtors came out with some stuff today suggesting some stability and hope for growth. But it’s a long way back.

Here’s a look at detail from a Minneapolis Realtors report from earlier this week (click on the chart for a larger view).

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In 2007 sellers were getting nearly 95 percent of their asking price.

We were also struck by this Zillow chart showing the gap between median sale price statewide in Minnesota compared to The Cities.

Minnesota Zillow Home Value Index

The value gap between the Twin Cities and all of Minnesota closed significantly in four years, an indication of the hit the metro area’s taken relative to the rest of the state.

Depending on the measure, average values have dropped about 30 percent in four years.

Markets recover. But even the normally upbeat Realtors expect only about a 3 percent increase in median Twin Cities home prices during 2011.

The group’s final assessment of 2010: worst sales in eight years.

Once again, it seems like ancient history but in December 2009, the Realtors announced 2010 would be the year the housing market found “Recovery Road.”

That was … premature.

As we noted a few weeks ago, people with jobs buy homes and can afford to keep them. And until more people are employed again in Minnesota, no one will be making predictions about the market turning onto Recovery Road.

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