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