Tami and Steve's I-94 Minnesota Real Estate Blog: How did the Housing Market Fare in 2009?

The 2009 Tax Credit may have been the savior of our local housing market. The early months of 2009 were dominated by foreclosure sales. Bank-owned sales produced a lackluster first half of 2009 in housing sales. Foreclosures accounted for 25% of the Central Minnesota housing market. But the poor performance of the first half quickly regained momentum in the third quarter as a record number of first-time buyers purchased homes and were credited $8,000 for their decision to become new home owners. With foreclosures seemingly under control, the housing market has taken on a new look.

The following four trends of 2009 are defining factors for the 2010 housing market. First, The local inventory, or number of homes for sale, is at a three-year low. The year ended with ten percent fewer homes on the market than in 2008. Fewer homes to compete with is good news for home sellers. Second, although the average sales price is still on the decline-- -2% for non-foreclosure homes compared to -15% for foreclosure sales--this is a motivating factor for buyers. Third, the total number of units sold in 2009 is up 2% over 2008. Our brokerage, Coldwell Banker Burnet, sold 10% more homes in 2009 than in 2008. Fourth, 2009 was a year of adjusting absorption rates. Absorption rate is the number of homes available per buyer. Currently we only have two foreclosed homes available per qualified buyer (seller's market). The overall absorption rate offers seven homes to every active buyer in the market (slight buyer's market). A balanced housing market offers six homes to each buyer, and at that number, theoretically, neither buyer nor seller has an advantage in negotiating the sales price.

These four housing facts, plus the new tax credit for buyers and sellers, should make 2010 an improved market for move-up sellers and offer buyers excellent values. The tax credits end on April 30th, 2010, so act today if a new home is your dream.

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Tami DeLand and Steve Hansen
Saint Cloud and Central Minnesota REALTORS
Coldwell Banker Burnet
(320) 258-6675
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St. Cloud Real Estate, Condos, Homes for Sale
Central Minnesota Real Estate
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