Corrections continue in 2007 Twin Cities housing market

 On the heels of several uninterrupted years of frenzied growth, the Twin Cities housing market finished its second full year of corrective declines in 2007, according to new analysis from the Minneapolis Area Association of REALTORS.

Chanhassen had an average year-to-date sales price of $406,982 at year end, ahead of last year by 10.9 percent. The Twin Cities region as a whole saw a decline of 1.3 percent for the year, comparing 2007 to 2006.

“Given the run-up in home values we saw in the early part of this decade, it’s not surprising that some of that value would be taken back by market corrections,” said Kevin Knudsen, 2008 president of the Minneapolis

Area Association of REALTORS®. “While this year-over-year decline is rare, the drawn-out price increases we saw previously are even more uncommon.”

At year end, there were 341 closed home sales in Chanhassen, behind 2006 by 19.4 percent. For the entire Twin Cities region, closed sales finished the year down 16.4 percent.

New listings in Chanhassen finished behind last year by 2.2 percent, posting 795 units listed. New listings in the entire region were down 2.8 percent as sellers and builders restricted their output.

At year end, Chanhassen had 96 single-family detached units available on the market, with 86 townhouse or condominium units on the market as well. Twin Cities inventory levels remain at record highs due to slowed absorption from sales, with 26,675 units on the market at month end for the entire region.

“The eventual return of home buyers will be gradual and take time,” said Knudsen. “But it’s important to recognize that positive changes are taking place in the local market and they are setting the stage for a healthy future.”