Homes for sale show first decline in years

Minneapolis, Minnesota (June 11, 2008) – There are fewer homes on the market today than there were a year ago, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc.

A long-anticipated benchmark and harbinger of calmer seas ahead, the downward year-over-year inventory movement is a sign that the seemingly never-ending market shift in the buyer's favor is now slowing its pace.

"This is welcome news for sellers," said Kevin Knudsen, MAAR President. "It's a crucial step towards bringing supply and demand into greater balance."

The decline in new listings is now exceeding the decline in home sales, with the two phenomena working in concert to bring inventory down. This is the first time that MAAR has been able to report a negative year-over-year movement in monthly inventory since we began tracking the figures in 2004.

In May 2008, there were 9,436 new listings, down a healthy 16.2 percent from May 2007. Traditional, non-lender-mediated new listings (excluding foreclosures and short sales) were down 31.5 percent for the same time period comparison from 10,349 in May 2007 to only 7,092 in May 2008. There were a total of 4,418 pending sales in May, down 7.6 percent from one year ago, a much smaller percentage decline than seen in new listings.

"Not only have the number of homes for sale declined, but buyer demand is now showing some positive signs of leveling out," said Kevin Knudsen, MAAR President.

The May median sales price of $205,000 is a slight uptick from last month, but down 9.9 percent from a year ago. Lender-mediated properties had a median sales price of $156,250—down 8.0 percent from last May—while traditional properties had a median sales price of $226,000, a decline of only 3.8 percent.

"Waiting for a better market isn't the ‘home run' buying strategy it used to be," said Steve Havig, MAAR President-Elect.