For Week Ending January 14, 2012

Last week, the Mortgage Bankers Association reported that mortgage applications increased more than 23.0 percent from the week prior. The fine print stated that most of the increase was driven by refinancing activity, given record low rates. Residential construction data also provided glimmers of hope. By now, many have surely noticed that the supply-demand balance is changing. What some may not realize is that this is a leading indicator, while home prices are a lagging indicator. Price appreciation is the final phase of recovery. Excess supply is down–in some areas, it's way down. Purchase demand in most areas strengthened throughout the second half of 2011. For sellers, it's less scary out there. For buyers, it's still a once-in-a-lifetime opportunity.

In the Twin Cities region, for the week ending January 14:

• New Listings decreased 5.2% to 1,216

• Pending Sales increased 28.4% to 728

• Inventory decreased 23.8% to 17,690

For the month of December:

• Median Sales Price decreased 6.5% to $145,000

• Days on Market decreased 2.5% to 140

• Percent of Original List Price Received increased 1.7% to 90.6%

• Months Supply of Inventory decreased 35.6% to 4.6

For Week Ending January 7, 2012

Publish Date: January 17, 2012 • All comparisons are to 2011

The first full week of 2012 shows that buyers were off to a busy start while seller activity cooled down. Sales volumes easily beat the same week in 2011. The inventory drops that many communities saw during the second half of last year should translate into further positive news for sellers. Interest rates are expected to hold the low ground, enriching the buying environment for consumers. It's early now. The spring market will ultimately be the major tell as to the rate of recovery throughout the year. Today's lesson: Maintain a long-term perspective and watch trends develop beyond one week of data.

In the Twin Cities region, for the week ending January 7:

• New Listings decreased 14.6% to 1,266

• Pending Sales increased 13.8% to 561

• Inventory decreased 24.5% to 17,302

For the month of December:

• Median Sales Price decreased 6.5% to $145,000

• Days on Market decreased 2.5% to 140

• Percent of Original List Price Received increased 1.7% to 90.6%

• Months Supply of Inventory decreased 35.6% to 4.6

Publish Date: January 9, 2012 • All comparisons are to 2011

Most observers would agree that this year's housing recovery was not as robust as many had hoped. That said, a handful of things went right. Supply-side market correction took the guise of inventory declines and a pullback in listing activity. Consequently, sellers generally faced fewer challenges than in the past. Driven by improvements in the economy and record-low mortgage rates, purchase demand strengthened organically, independent of government incentives. Those sales gains dovetailed with falling inventories to move the market back toward balance. Nobody knows what 2012 will bring, but it's a safe bet that these positive developments will continue to evolve.

In the Twin Cities region, for the week ending December 31:

• New Listings decreased 11.6% to 593

• Pending Sales increased 41.7% to 564

• Inventory decreased 24.9% to 18,341

For the month of December:

• Median Sales Price decreased 5.6% to $145,000

• Days on Market decreased 2.4% to 140

• Percent of Original List Price Received increased 1.8% to 90.6%

• Months Supply of Inventory decreased 36.2% to 4.6

If you follow our weekly notes with even a sidelong glance, you know that the story of the market in 2011 has been increased sales and decreased inventory. That's all well and good, but consumers and the media want to talk about one thing: Price. Ideally, sellers seek multiple offers. This signals strong demand and competitive bidding. Buyers want to know that purchasing a home is a financially sound investment. Consumers, whether buyer or seller, want to know when we'll be establishing a stable real estate foundation again. Which is exactly why the tale of increased sales activity and healthy inventory absorption matters.

In the Twin Cities region, for the week ending December 24:

• New Listings decreased 9.6% to 596

• Pending Sales increased 48.4% to 607

• Inventory decreased 24.4% to 18,666

For the month of November:

• Median Sales Price decreased 10.2% to $149,000

• Days on Market decreased 1.8% to 135

• Percent of Original List Price Received increased 1.0% to 90.9%

• Months Supply of Inventory decreased 29.8% to 5.7

Today's housing market is like Minnesota Golden Gophers sports. If football's your game, it doesn't look great and hasn't for a number of years. If you're a basketball fan, the results are positive even if you're missing key inventory. If you're into hockey, past glory appears to be on the horizon. It all depends on your angle and how you look at it. Sub-4.0 percent mortgage rates and a 40-percent discount off 2006 prices may make buyers happy, but bank-mediated properties pose challenges to traditional sellers akin to playing a Big 10 schedule without Trevor Mbakwe. Moral of the story? Your level of enthusiasm is dictated by which set of bleachers you're sitting on.

In the Twin Cities region, for the week ending December 10:

• New Listings decreased 11.3% to 911

• Pending Sales increased 31.7% to 761

• Inventory decreased 23.2% to 19,380

For the month of November:

• Median Sales Price decreased 10.2% to $149,000

• Days on Market decreased 1.9% to 135

• Percent of Original List Price Received increased 1.0% to 90.9%

• Months Supply of Inventory decreased 30.2% to 5.7

As another new year approaches, we find ourselves settling in for the holidays, which typically come with slowed real estate activity. In the first week of the full holiday shopping season, we saw sales increase. We're talking about residential real estate, of course, although retail performed surprisingly well, too. Sellers listed fewer properties during the week, choosing instead to hunker down in their living rooms rich with the aromas of pine-scented candles and cinnamon cider sticks.

In the Twin Cities region, for the week ending December 3:

• New Listings decreased 9.3% to 1,006

• Pending Sales increased 36.4% to 885

• Inventory decreased 22.9% to 20,031

For the month of November:

• Median Sales Price decreased 9.9% to $149,500

• Days on Market decreased 1.8% to 135

• Percent of Original List Price Received increased 1.0% to 90.9%

• Months Supply of Inventory decreased 30.5% to 5.7

Tryptophan and chatty in-laws were not able to curb the appetite of local home buyers, as purchase activity easily gobbled up last year's levels. Sellers were apparently stuffed and lethargic, as they brought fewer new properties onto the market than during the same holiday week last year. As we approach the slowest time of year for residential activity, expect transacted dollar volumes and sales counts to weaken from the spring and summer of this year. Keep watching inventory declines; they could have a measurable impact on the Spring 2012 market.

In the Twin Cities region, for the week ending November 26:

• New Listings decreased 9.1% to 601

• Pending Sales increased 46.8% to 574

• Inventory decreased 22.8% to 20,318

For the month of October:

• Median Sales Price decreased 9.6% to $154,500

• Days on Market decreased 0.5% to 134

• Percent of Original List Price Received increased 0.9% to 91.2%

• Months Supply of Inventory decreased 27.6% to 6.3