Foreclosure home sales in the Midwest region added some notch last month, driven by the abundance of bank owned foreclosed home on the market and the drop in market prices. For the first time since September last year, home sales in the Midwest region rose by 3 percent.

Federal Reserve Bank of Kansas City senior economist Kelly Edmiston said that current developments are indications that home sales are starting to move off the bottom.

Industry experts said that the volume of bank foreclosed home in the market has pressured market prices to go down to their all time low levels. This makes home prices so much affordable compared with previous years that buyers sense that the market is at a bottom. This motivated them to make home purchases thinking that now is the right time.

The 12-state Midwest region posted a 9 percent drop in the median sales price on a year-to-year basis. The $157,000 median price was further influenced by sellers becoming more aware of the real state of the market and the large backlog of distressed properties.

According to market data, home sales gains were reported on all 12 cities in the Midwest region for three consecutive months. On a year-to-date basis, existing home sales were still dropping in eight out of the 12 metropolitan statistical areas in the region last month. However, only Omaha, Nebraska and Cleveland, Ohio posted double-digit losses whereas in May, nine cities reported double-digit decline.

Data also showed that median home prices drop across the region as buyers continue to sift through the large inventories of bank foreclosed home. The biggest home sales gains were still happening in Detroit, Michigan and Minneapolis, Minnesota where buyers continue to grab foreclosed properties in a market that showed dramatic decline in median home sales prices.

In Detroit, home resales increased by almost 21 percent on a year-to-year basis last month. But the median home sale price outperformed home sales gains by dropping almost 45 percent to $50,500, the biggest decline nationwide.

In Minneapolis, home sales rose by 8 percent while the city’s median price dropped by 11 percent to almost $174,000.
The volume of bank foreclosed home and low median sale price failed to buoy up home sales in Cleveland and Chicago, posting 14 percent and 8 percent drops, respectively.