"You can sense a change in the air."

This press release from MAAR really sums up the current market:

Buoyed by buyer advantage and seller motivation, Twin Cities home prices continue their downward slope, resulting in improved affordability, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc.

The unignorable and ignoble news is that the January 2008 median sales price of $205,000 is a decrease of 8.9 percent from January 2007. While this is challenging news to a home owner banking on short-term value returns on their property, it's a hopeful sign of good times ahead for those who believe that the market needs accessibility before it can truly improve.

"In simplified terms, things need to go down before they can get up," said Kevin Knudsen, 2008 MAAR President. "Affordability will help kick-start the rebound. It's elementary supply and demand."

The MAAR Housing Affordability Index (HAI) shot up eight points from last month to 149, the healthiest HAI figure since 2004. Further, the number of homes for sale has tripled in the same time, creating what is arguably now the most attractive market for buyers this decade.

Despite the opportunities, home buyers remain relatively inactive. Newly signed purchase agreements (pending sales) posted 2,562 units in January, 20.7 percent behind one year ago. Similarly, closed sales declined by 21.3 percent for the same time period comparison.

Slowed sales means slowed inventory absorption, and the number of homes for sale continues to post record levels. At the end of January, there were 28,166 homes for sale, which amounts to 10.02 homes for each buyer expected during the upcoming month.

The number of new listings on the market is declining, posting 8,322 units in January. This is down 6.8 percent from January 2007, as sellers and builders continue to cut down on adding new supply.

"You can sense a change in the air," said Steve Havig, 2008 MAAR President-Elect. "Needed market corrections are accelerating, which will eventually bring buyers out of the woodwork."