TAX NEWS - June 2010

Twin Cities housing numbers drop after tax credit ends

Twin Cities home sales and new listings dropped last month, the Minneapolis Area Association of Realtors said, after a federal tax credit for first-time homebuyers expired at the end of April.

The median sales price in the 13-county metro area for May increased by 6.1 percent over the same time last year, to $175,000, with gains in foreclosure sale values outweighing year-to-year price declines for traditional and short sales.

But pending sales, posting gains only in short sales, dropped by 21.6 percent to 3,551 in May compared to 4,532 in May 2009.

New listings, at 6,335 in May, dropped by about 22.4 percent from one year prior.

"While it was nice to see another month of median price gains, a decline in pending sales certainly casts a pall over any additional price increases," Minneapolis Area Association of Realtors President Brad Fisher said in a news release. "Rising prices and declining sales is a pattern that presumably cannot continue."

President-elect Pat Paulson said the tax credit affected purchase timing, but it was uncertain how much it boosted business.

"Another couple months in the books will further help to untangle post-tax-credit effects from broader market trends," Paulson said.

The group estimates there will be about five homes available per buyer in June.