Home sales and prices fall in August

Home sales usually slip in Northeastern Minnesota in August, but last month they fell.

Coming down from routine summer highs, home sales dipped only 6 percent from 221 last July to 207 in August. This year, sales between the months fell 20 percent from 229 to 183, according to Duluth Area Association of Realtors statistics.

Pat Johnson, association president and a broker for Focus Real Estate group, pointed to the high number of pending sales in August as an indicator that the current real estate market is cyclical, not declining.

“I’m thinking September will be a higher sales month,” Johnson said of the 2009 high of 224 pending sales in August — up from 187 in July — and a bump expected from the upcoming expiration of the first-time homebuyer tax credit on Nov. 30. “I think we will see strong sales now for a little bit.”

The month’s median selling price also decreased about 5 percent compared to July and 13 percent compared to August 2008. The price was $130,000 last month, a dip from $137,200 in July and $149,000 in August 2008.
This stat caught Johnson’s eye.

“In this economy is anything startling? Probably not,” Johnson said. “But I haven’t seen a reason for it to go down.”

Signifying a return of the area’s real estate market, the median selling price had trended upward by about $25,000 in four straight months from April to July at $137,200. Last year, the medial selling price was above $142,000 in the summer and fall before plummeting to $127,900 in December.

“I wouldn’t call it startling, but it was a bit of a surprise,” Johnson said of the August dip. “I looked at the graph and saw the sale price was down a bit and we had been going up for so long.”