The house at 3434 40th Ave. S. in Minneapolis is among 14,126 homes listed for sale in the 13-county Twin Cities area, according to listings data from the Minneapolis Area Association of Realtors. (Staff photo: Bill Klotz)

Overall home sales in the 13-county Twin Cities area fell 5.9 percent between November 2012 and last month, but local Realtors point to a deep reduction in sales of distressed homes as the cause. It’s a good thing, according to market observers.

Foreclosure sale closings were down 34.7 percent year over year, while short sale closings were down a whopping 57.6 percent, according to the monthly report released Wednesday by the Minneapolis Area Association of Realtors. Traditional sales were up 13.6 percent, however.

“It looks at first glance as if things are slowing down,” said Andy Fazendin, president of MAAR. “But really, when you look at what’s going on beneath these numbers, it’s really positive.”

At this time last year, foreclosures and short sales made up more than 35 percent of all closings. Two years ago, distressed homes accounted for nearly 60 percent of all closings. This November, they accounted for only 22.1 percent of all sales.

Herb Tousley, director of the University of St. Thomas real estate program, said it’s encouraging to see that number drop.

“There’s just not as many distressed properties coming on to the market, and the distressed properties that exist are clearing the market, which is a good thing,” he said.

The market-wide median sales price held firm at $195,000 for a third straight month, up 13.4 percent from a year ago and nearly 25 percent from November 2011.

Tousley said those stronger prices could help sellers who have owed more to lenders than their homes are worth.

“Every time median prices go up, more and more of those people come out from being underwater and would be more likely to put their homes on the market,” he said.

What’s more, some previous homeowners may be re-establishing themselves.

“What we’re starting to see is the front edge of people who sold a distressed property are getting back into the market,” Fazendin said.

For the first time in seven months, new listings were also lower year over year. About 3,900 new homes were listed in November, down 5.3 percent from a year ago. But traditional homes bucked that trend, with an 11.1 percent increase in new inventory on the market.

Sellers continue to receive good news on pricing. The typical sale captured more than 95 percent of its asking price in November, up about 1.4 percent from last year. Year-to-date, sellers are getting 96.2 percent of their asking price.

The time it takes to sell a home also improved significantly. It took an average of 75 days to sell a home in November, down from 102 days a year ago.

“I think we’re set up now so that the signs are very encouraging for a good year in 2014,” Tousley said. “We’re still seeing good gains in year-over-year pricing even in the winter, which is traditionally our slow season.”

Winter slowdown?

Twin Cities area home sales were down in November, but median prices and percent of original price received remained above 2012 levels.

Source: Minneapolis Area Association of Realtors