TWIN CITIES AREA

In a segment airing on CNBC last week, HomeServices of America Chairman and CEO Ron Peltier discussed the “emerging signs of optimism” in the national housing market; HomeServices of America is Edina Realty’s parent company. Locally, the Minneapolis Association of REALTORS® (MAAR) echoed Peltier’s sentiment, noting that the 13-county Twin Cities metropolitan area has been showing decreased supply, low prices and high, pent-up demand for quality listings. Moreover, consumers have been reentering the market despite a lack of outside incentives, leading to an 8.2 percent increase in local home sales in 2011.

One variable still causing concern is median sales price, which slipped to $150,000 in 2011, a decrease of 11.7 percent from 2010. Experts note that this number doesn’t tell the full picture, as home price declines have softened over the last half of the year. “Median sales price reflects the mix of properties sold during the year—and in 2011 a lot moved in that lower bracket. Price increases will be the final piece of the recovery," said Richard Tucker, President of the St. Paul Area Association of REALTORS®.

Still, many are predicting a bustling spring market due to these low prices, record low interest rates and a stabilizing local economy. Perhaps the brightest sign is Minnesota’s 5.8 percent December unemployment rate, the state’s lowest level since 2008.

Meanwhile, the buyer’s market may finally be evening out. MAAR reports that inventory levels are at their lowest in eight years, meaning that sellers with quality listings should continue to see multiple offers as the marketplace becomes increasingly competitive for buyers.

As Ron Peltier and many other housing experts have mentioned, 2012 looks to be a promising year in terms of recovery. That translates especially well on a local level, as Minneapolis – St. Paul – Bloomington was recently named the healthiest housing market in the nation by Builder Magazine.