Selling Your Home in Minnesota? Partner with the Top Realtor for Maximum ReturnsRecently posted or modified blog posts in the category - Housing Market Monthly Reviewhttps://www.mnpropertygroup.com/blog/Copyright MNPropertyGroup.com2024-02-26T11:11:22-07:00tag:mnpropertygroup.com,2012-09-20:6145The Twin Cities Housing Review December 2019Twin Cities Real Estate Review
Even as we advance into the new year, we have one piece of unfinished business to conclude in 2019 before closing the books. The Twin Cities housing market numbers are out for December, and here is the story they told.
It’s a tale that is long in the tooth by now about a market that is struggling to find balance. Limited inventory at lower price points makes the real estate market in the Twin Cities a seller’s dream. Even in the face of strong demand and insufficient stock, millennial buyers are achieving the objective of buying their first home.
Housing Inventory
While new listings for December saw a gain of 3.9%, overall inventory levels were down 19.6% compared to December 2018. The townhouse segment, down 12%, lost the least inventory, while single-family homes were down 20.8%, and condos lost 14.2%. The month’s supply of inventory for December was dipped 21.2% overall. In the Twin Cities metro, we saw 1.6 months of supply for single-family homes (down 20%), 1.1 months for townhomes (down 8.3%), and 1.5 months for condos (down 11.8%).
Real Estate Sales
Closed sales in the Twin Cities were up 13% in December, and pending sales were up 8.2% compared to the same time from the previous year. The category with the most significant gain in sales was single-family homes, with the most robust sales falling in $500,001 to $1,000,000 pricing tier, up 17.2%
Home Property Values
Fueled in part by limits on inventory, home values continue to gain traction. The 12-month rolling median sales price of a home in the Twin Cities for December was $280,000, up 5.7%. The property category with the most gain was condos at $187,000 up 8.4%, followed by townhomes at $222,000 up 7%, and single-family homes at $304,000 up 6.5%. Compared to December of 2018, homes sold faster at price ranges above $350,000 and slower at price points below $250,000, resulting in homes selling faster by 1.8% at 34 days on the market until sale.
Interest Rates
Here is where it gets interesting. No one predicted interest rates would fall to a level we have not seen since 2016. In December, they were ¾ of a point lower than the year before. The lower interest rates offset higher home prices, boosting affordability. The expectation is that rates will decline even further as we head deeper into the year.
Let’s Look at the Economy
Economic growth, job and wage growth, and low-interest rates continue to support a healthy housing market. The Minnesota unemployment rate for December 2019 was 3.5 percent, seasonally adjusted to 3.3 percent, and for the Twin Cities metro, 2.8 percent. Although talk of a recession in 2020 has tapered off, we should keep in mind that this economic upturn is in its tenth year, and there are signs it is slowing.
New Construction in the Twin Cities Metro
According to the Keystone report, in December, 451 building permits were issued for 1,140 units. New construction rose in 2019 by 4%, with total units up 20%. The expectation is for the trend to continue into 2020. However, the amount of newly constructed homes are not meeting the demand, especially at the entry-level price points. John Rask, president of Housing First Minnesota, said, “The market demand is there for new housing, yet the housing industry is facing multiple headwinds, including a labor shortage, lot shortage, and a tough regulatory environment, that is holding back the construction of new homes.”
Predictions for 2020
The economy is still enjoying the most prolonged period of expansion on record, and the housing market continues to benefit from the economy's strength. Also, with low-interest rates and wage growth, the outlook for 2020 is optimistic. Based on data from Freddie Mac, sales of homes nationally are expected to reach 6.1 million this year. The combination of low-interest rates and moderating prices should increase affordability allowing more young buyers to become homeowners. I’ll drink to that!
Twin Cities Housing December 2019 vs. December 2018
new listings up 3.%
pending sales up 8.2%
closed sales up 13%
days on the market until sold down -1.8%
inventory of homes for sale down -19.6%
month’s supply of inventory down -21.1%
median sale price up 8.2% to $279,000
original list price received up 0.5%
the price range of $500,001 to $100,000,000 saw the most gains, up 17.2%
Condos earned the most significant price gains for housing type, up +8.4%
new construction sales topped existing homes, up 7.5%
fastest-selling homes were priced from $190,001 to $250,000 (34 days)
Twin Cities Housing Stats from November 2018 to December 2019
new listings up +0.2%
pending sales up +1.4%
closed sales up +0.8%
overall median sales price up +5.7%
*data source Minneapolis Area Association of Realtors.2020-02-11T18:48:00-07:002024-02-26T11:11:22-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:5580Twin Cities Housing Review October 2019The Fourth Quarter nationality
It seems like last week I was still sporting shorts and flip-flops, yet here we are fully ensconced in fall, with winter just around the corner. As we focus on Thanksgiving and gratitude, I am thankful for the strength of the Twin Cities housing market.
The cold months may be the slowest time of the year, but due to historically low mortgage rates, housing demand remains strong while home values continue to rise. Buyers should notice and not let the cold weather stop them from following their dream of homeownership.
The Story of Low Inventory and Strong Demand Continues
If you are looking for a home at the lower price points, you face competition. There are still not enough homes to satisfy the hunger for homeownership. Although we saw a 3.8 percent increase in new listings compared to October of last year, inventory fell short by 5.8 percent. At the higher-priced end of the market, it is either balanced or leaning in favor of the buyer.
Property Values
The trend for rising home values began in 2011 and continues. For October, sellers enjoyed a 5.7 percent increase in the median sale price last year at this time. At the same time, homes spent 4.2 percent less time on the market, approximately 46 days. With demand strong, home values rising, and interest rates low, sellers should be encouraged.
Interest Rates
We did experience a slight uptick in interest rates last month compared to September, where they were at a three-year low. That being said, they are still a phenomenal bargain at one point lower than this time last year. Even though it is unlikely that the Fed will lower the interest rate again this year, Fannie Mae predicts that the mortgage rate will hold steady or possibly go even lower, heading into 2020, with an expected rate decrease early in the year the Fed.
Let’s Look at the Economy
Economic growth continues with job creation, which is always good news for the housing market. The Minnesota unemployment rate for October was 2.5 percent, seasonally adjusted to 3.2 percent. Although that number represents a 4 point increase in unemployed over last year, we are still enjoying a vibrant and robust job market.
The China-US trade war is hurting our economy. However, there is now a temporary “ceasefire” while ongoing talks. The volitivity overshadows optimism that we will reach an agreement we have witnessed from the current administration; I am taking a “let’s see how it goes” position
There has been a moderation of spending since the early part of the year as consumers feel some concern about the economy's future. However, retail sales did show a gain of 0.3 percent, which exceeded expectations. Consumer confidence and spending are fueling the marketplace right now.
New Construction in the Twin Cities Metro
From the October Hot Sheet, John Rask, president of Housing First Minnesota, said, “It’s shaping up to be a good year for homebuilding activity. Our housing market is still vastly undersupplied, and the pace of homebuilding this year will help, but more production is needed to make a dent in our supply shortage." Permits issued in the Twin Cities for 2019 are on track to hit a 13 year high. That is exciting news for the local housing market.
In September 472, single-family building permits were issued, representing a 6 percent increase over last September. Multi-family construction also had a whole month with 26 passes pulled. Those permits represent 1009 new units, a 21 percent increase over the same time last year.
Unfortunately, we are still not seeing newly constructed homes at the price point we need inventory the most. Also, from the October Hot Sheet, “While the slow and steady increase in new home construction is promising, it is not enough,” said David Siegel, executive director of Housing First Minnesota. “We need to be building homes at all price points to truly solve our housing issues in the Twin Cities, and unfortunately, delivering units at the most affordable price points is only growing more difficult in our region.”
Deep Dive into the Numbers
From November 2018 to October 2019 in the Twin Cities, pending sales were up 0.1 percent. The price range with the most increase in sales was the $500,001 to $1,000,000 range, up 15.6 percent.
The median sale price of $279,900 increased 7 percent, with the most significant gain in the condo market up 8.8 percent. Homes in the $190,001 to $250,000 price range sold the fastest at 35 days. Homes in the luxury category, selling above $1,000,001 was the slowest moving at 148 market days.
The inventory numbers were down 5.8 percent, with townhomes holding their own above other segments at 4.7 percent. We find the month’s supply of inventory for Condos is 2.3, Townhomes at 1.7, and single-family homes at 2.5 months of supply.
Twin Cities Housing October 2019 vs. October 2018
new listings up 3.8%
pending sales up 4.9%
closed sales up 1.3%
days on the market until sold down -4.2%
inventory of homes for sale down -5.8%
month’s supply of inventory down -8.0%
median sale price up 5.7% to $280,000
original list price received up 0.1%
the price range of $500,001 to $100,000,000 saw the most gains, up 15.6%
Condos earned the most significant price gains for housing type, up +8.8%
new construction sales topped existing homes, up 4.7%
fastest-selling homes were priced from $190,001 to $250,000 (35 days)
Twin Cities Housing Stats from August 2018 to July 2019
new listings up 0.2%
pending sales up +0.6%
closed sales down 0.3%
overall median sales price up +5.7%
*data source Minneapolis Area Association of Realtors.
2019-11-19T18:06:00-07:002024-02-22T07:31:11-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:5466MN Realtor Reviews the Real Estate Market
MN Realtor Reviews the Market
Can you believe summer is over, and we are firmly ensconced in fall? Halloween may be right around the corner, but I’m happy to say there is nothing scary about the Twin Cities housing market. Just the opposite.
Although we now head into the slowest time of the year for real estate, currently we are seeing lots of buying and selling activity. This activity is partly due to a dip in mortgage interest rates and a carryover of strong demand for housing.
Currently, you will see fewer homes for sale. However, there are fewer buyers, as well. There seems to be less urgency, generally speaking, allowing buyers to take a deep breath before deciding to make a purchase offer on a home. So if you have been on the fence about to buy or not to buy, this may be a great time to jump into the market.
MN Realtors See Low Inventory
I’m tired of saying it, and likewise, you are tired of hearing it, but lack of affordable inventory of homes is holding back an otherwise vibrant and robust housing market. At the lower price tiers, demand still outstrips supply with inventory falling 5.6 percent from September of 2018 with the most significant declines in prices below $250,000.
Property Values
Home values have been steadily increasing since 2011. The median sale price increased 6.6 percent over last September and 6.6 percent over the 12-month rolling period as well. Even with it looking as if the economy may be moving into some headwinds, the demand for owning a home is healthy. With interest rates lower and the restraints on the inventory of homes, it’s no wonder values continue to rise.
Interest Rates
The trade war has sparked uncertainty among investors who are moving towards the haven of long-term US bonds, pushing down the 10-year treasury yield. The 30-year mortgage interest rates follow the same trend. This movement is good news for buyers and sellers, making it a good time for real estate market activity. It is challenging to predict how this is going to play out in the coming weeks and months, but I feel fairly confident when I say interest rates will continue to be a bargain and likely to remain below or just at 4 percent.
The Economy, Politics and All That Other Jazz
The current economic growth we have been enjoying has become the longest on record. However, it’s beginning to exhibit signs of moderating with the job creation numbers for September, although still positive, falling along with a decline in consumer spending.
With no resolution to the trade wars on the horizon and the possibility of a recession looming later next year, businesses are reluctant to commit to expansion and new hiring. Likewise, consumers are starting to see that rainy day ahead and are not spending as freely.
That being said, it’s not doom and gloom for the housing market. As I mentioned earlier, investment in the long term US bond market is pushing interest rates lower, and right now the economy is a little slower but still buzzing along nicely. With values on real estate rising, purchasing a home is attractive and a sound investment. Ari Wolf from Meyers Research recently wrote, “Expectations about the economy drive behavior. As we see year-over-year increases in home sales throughout the rest of the year, especially double-digit growth rates in some markets, consumers could view now as a good opportunity to enter the market driving additional sales.”
New Construction in the Twin Cities Metro
Builders are ending the summer strong which is making up for the slow start at the beginning of the year. For the month of August 711 single-family permits were issued, reflecting an increase of 10 percent over August of 2018. We would still need to see a more substantial boost to alleviate the housing shortage, but every little bit helps, and we will take it! As John Rask, president of Housing First Minnesota put it, “It’s a good sign to see that builders are ending the summer strong. Housing inventory is still sitting well below what is necessary for a healthy housing market. We hope to see a continued increase in construction activity throughout the rest of the year.”
Let’s Look at the Numbers
Twin Cities housing market from October 2018 to September 2019 stats indicate that pending sales were down 0.5 percent. We saw the highest gain in sales at the $500,001 to $1,000,000 price range, with an increase of 14.6 percent.
The median sale price was $277,250 up 6.6 percent with the condo market winning top price fo the highest gain, 9.8 percent. The quickest selling homes fell into the $190,001 to $250,000 at 35 days with homes selling above $1,000,001 was the market turtle at 158 days.
Inventory was down 5.6 percent, with townhomes losing the least stock at 4.7 percent. We find the month’s supply of inventory for Condos is 2.3, Townhomes at 1.8, and single-family homes at 2.7 months of supply.
Twin Cities Housing September 2019 vs. September 2018
new listings up 2.5%
pending sales up 2.9%
closed sales up 3.4%
days on the market until sold up 2.4%
inventory of homes for sale down -5.6%
month’s supply of inventory down -7.4%
median sale price up 6.6% to $279,250
original list price received up 0.1%
the price range of $500,001 to $100,000,000 saw the most gains, up 14.6%
Condos earned the most significant price gains for housing type, up +9.8%
new construction sales topped existing homes, up 3.3%
fastest-selling homes were priced from $190,001 to $250,000 (35 days)
Twin Cities Housing Stats from August 2018 to July 2019
new listings up 1.2%
pending sales down -0.1%
closed sales down 0.6%
overall median sales price up +5.7%
*data source Minneapolis Area Association of Realtors.
2019-10-18T19:12:00-07:002024-02-22T10:56:34-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:5269Twin Cities Housing Review July 2019Twin Cities Housing Market Review From Top Local Realtor
There are currently numerous factors that affect the housing market. However, right now, more than anything, it is the consistent lack of homes available for buyers in the lower pricing tiers. This fact holds true both in the Twins and in most markets across the nation.
It's significant that while home values are still increasing, it is slower, more closely matching income and wage growth. While you may be frowning if you are thinking about selling your home in the future, the alignment is healthy for the market. We all knew that sharply escalating prices for homes could not continue indefinitely.
MN Housing Market Trends Have Been Consistent
While we continue to see constraints on available homes for sale at the first-time buyer level, the market is becoming more balanced as we move up to higher price ranges. So sellers are still enjoying a market that favors them under $500,000.
Meanwhile, lower interest rates are helping to continue to make housing affordable despite the rising prices. Even though new listings were up 1.8 percent over July of 2018, inventory levels in the Twin Cities fell 4.4 percent. Despite the fact, demand remains strong, with closed sales up 4.5 percent and pending sales up 3.2 percent.
Although prices are not rising as quickly and steeply, the median selling price was up 5.9 percent over July of last year and up 7 percent as a rolling 12-month comparison. With days on the market flat at 38, homes sell just as quickly even though prices are going up.
A Deeper Dive into the Numbers
Let's take a look at the Minneapolis-St. Paul housing market from August 2018 to July 2019. The highest market segment, above $1,000,001, has the most significant gain in sales at 15.2 percent. The median sale price of $274,900 was up 7 percent, with the most substantial rise in the value found in the condo market, where we see a 12.1 percent increase in prices. Selling the quickest at 35 days is the $190,001 to $250,000 range, and not surprisingly, the slowest was the $1,000,001 and above segment at 166 days.
Inventory levels for housing were down 4.4 percent over the year. The market segment least affected was single-family homes, lower by 4.1 percent (2.7 months of supply). Condos currently rest at 2.1 months of supply, and Townhomes are the hardest hit in terms of inventory levels, down to 1.7 months of supply.
The Local MN Economy
We are currently still enjoying the most prolonged period of economic growth in our history. The US economy added 164,000 new jobs in July. Unemployment was at 3.7 nationally and 3.4 percent in Minnesota. Average wages increased by 3.2 over the last 12 months. Interest rates are still a bargain by any standard, with mortgage rates under 5 percent.
However, it looks like the economy is sailing into the wind. The ongoing trade war affects the cost of goods for manufacturing, overseas sales of American products and has hit American farmers hard. The stock market has fluctuated wildly on any news about tariffs or talks of an agreement. Consumer confidence has taken a slight dip. What does this all mean for housing in the future by the end of the year? We'll touch on that later.
New Construction in the Twin Cities Metro
New construction in the metro is again the bright spot for July. Single-family construction posted double-digit gains with 513 permits pulled for July. That equates to a 12 percent increase over July of last year. "With the economy steaming ahead and interest rates dropping, homebuyers are showing continued interest in building new homes," said John Rask, president of Housing First Minnesota. "As prices of existing homes continue to climb and inventory remains tight, we expect this trend to continue."
Data from the Keystone Report for Housing First Minnesota shows 518 new building permits issued, which translates into 919 units of housing. Here is where the new construction is happening. Lakeville came in first with 45 building permits, and Ostego and Woodbury tied with 26 tickets, while Blaine and Elk River tied with 24 each.
July Wrapup
While the economy is still expanding, the rate of growth is slowing. Concerns about the trade war, the federal deficit, and stock market gyrations have caused concern. These facts have led many investors to seek the safe harbor of the bond market, which has created opportunities for the real estate market in terms of lower interest rates.
Even in the face of a slowing economy, home values in the Minneapolis-St. Paul's housing market rose in July. Even with higher prices, July sales increased 4.5 percent, and homes sold just as quickly. The only factor that appears to put a damper on sales is the lack of homes available to purchase.
As we head into the fall, the expectation is that interest rates may decline even further. Meanwhile, home values are expected to rise more slowly and align with wages, which is better for the long-term sustainability of housing in the Twin Cities metro. If you consider buying or selling a home, now is the perfect time to take advantage of the fall real estate market.
Twin Cities Housing July 2019 compared to July 2018
new listings up 1.8%
pending sales up 3.2%
closed sales up 4.5%
days on the market until sold flatlined at 0%
inventory of homes for sale declined by -4.4%
month's supply of inventory down -4.0%
median sale price up 5.9% to $283,700
original list price received down -0.1%
the price range of $100,000,001+ saw the most gains, up 15.2%
Condos earned the most significant price gains for housing type, up +12.1%
new construction sales topped existing homes, up 2.2%
fastest-selling homes were priced from $190,001 to $250,000 (35 days)
Twin Cities Housing Stats from August 2018 to July 2019
new listings up 2.4%
pending sales down -1.5%
closed sales up 4.5%
overall median sales price up +5.9%
*data source Minneapolis Area Association of Realtors.
2019-09-03T13:56:00-07:002024-02-22T11:02:40-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:5071Twin Cities Housing Review June 2019MN Realtor Reviews the Housing Market
As we look at June and the end of the second quarter, we observe a continuing trend of a more equitable and viable real estate market emerging. We also continue to enjoy strong housing market performance due to low unemployment, strong retail sales, and the longest US economic expansion in history.
Overall, the dynamics of the market have not changed noticeably this year. Although new listings fell by 3.1 percent compared to last June, the median sale price increased by 7.2 percent while days on the market flatlined at 40. We are slowly approaching balance in the price range of $350K to $500K, but certainly not there yet. When we go above that range, we reach a balance between buyer and seller. The highest price range is the buyer's market.
Meanwhile, back in lower price land, inventory is scarce. I know, I know. You have been hearing this story for a long time now.
The High's and Low's of the Twin Cities MN Housing Market
Looking at June of this year compared to 2018, new listings are down 3.1 percent. That decrease also brought pending sales down 2.9 percent and inventory levels down 1.3 percent. Meanwhile, the Median sales price increased by 7.2 percent, causing sellers to smile. Closed sales decreased 8.2 percent, as did a percentage of list price received slightly by 0.3 percent. Time on the market until sold flatlined.
A Deeper Dive into the Numbers
The most significant gain in sales rests at the highest end of the market above $1,000,001with, a 13.8 percent increase over last year at this time. The most significant price gains were in the condo market, with a median price of $182,900, up 11.5 percent. The fastest-selling properties were in the $190,001 to $250,000 price range at 34 days. Homes in the $1,000,001 and above bracket took the longest to sell, averaging 166 days. Reviewing supply, we see market-wide inventory levels were down 1.3 percent. Single-family homes lost the least inventory at 1.1 while the stock of townhomes declined 3.4 percent and condos 2.8.
The Economy
Our economy continues to chug along nicely, but there are signals that the expansion is slowing down. The expectation for the inflation rate is to remain below 2 percent, which the Fed considers a healthy pace. Following a string of increases in the interest rate, the Fed is expected to lower the rates this year, reacting to pressure from the White House to spur economic activity. However, when I checked today, the current interest rate for a 30 year fixed loan is 3.875 percent, and that is good news for both buyers and sellers alike. <a href="http://blog.batc.org/the-june-hot-sheet-3/"><br /></a>
New Construction in the Twin Cities
When we look at inventory levels of new homes in the Twin Cities, we find that inventory is up 10.5 percent, and months supply is up 7.3 percent. We also see the recent construction sales up 2.9 percent, outpacing previously-owned homes. When we compare June of this year to last year in the new construction segment of the market, we find pending sales up 2.9 and the median sale price up 1.5 percent. It took a little longer to sell new homes, with days on the market increasing to 96, 5.5 percent jump. Meanwhile, the percentage of list price received dropped 0.3 percent.
Still, not enough new homes are being built to keep up with housing demand, significantly lower prices. Nothing has changed over the months. Builders cannot profit from constructing houses for the entry-level market because of the high costs of material, regulations, and labor shortages.
From the June BATC Hotsheet
Now for the good news! Single-family construction soared like an eagle in June, with building permit numbers up 21 percent after four months of declines. "With mortgage rates falling, the economy steaming ahead, and low existing housing inventory, now is a great time to build a home," said John Rask, president of Housing First Minnesota. "There is serious demand for single-family housing in the Twin Cities, and the strong permit numbers we see this month is what we expected to see all year."
According to the Keystone Report for Housing First Minnesota data, 711 new building permits were issued to construct 1,480 units of housing. Lakeville took top awards with 52 tickets, Lake Elmo second with 46, Blaine with 37, Plymouth with 35, and last but not least, Woodbury with 33 building permits issued. The value of the completed housing for those permits is estimated to be $289 089,940.
Minneapolis-St.Paul Housing Market June Summary
Overall when you look at the market for housing in the Twin Cities, there is a lot to make us feel optimistic. Housing values continue to climb, and mortgage rates have us smiling. New construction is increasing. The only factor to really fault is the housing shortage at the lower pricing levels.
While it's challenging to see entry-level buyers struggle to secure a deal on their first home, I always remain hopeful. Our baby boomer population is reaching retirement age at the pace of 10,000 a day. I hope more of them will be inspired to put their homes on the market and opt for a smaller or different housing option. Those homeowners living in their first home with a yen to move up may finally take a leap of faith and do it.
In the meantime, the glass looks half full as I peer through my rose-tinted lenses.
Twin Cities Housing June 2019 compared to June 2018*
new listings down -3.1%
pending sales down -2.9%
closed sales down 8.2%
days on the market until closing flat at 0%
inventory of homes for sale down -1.3%
month's supply of inventory flat at 0%
median sale price up +7.2% to $290,000
original list price received down -0.3%
the $100,000,001 and above price range saw the most gains, up +13.8%
Condos earned the most significant price gains for housing type, up +11.5%
new construction sales topped existing homes, up +2.9%
fastest-selling homes were priced from $190,001 to $250,000 (35 days)
Twin Cities Housing Stats from July 2018 to June 2019*
new listings up down – 1.2%
pending sales down -2.5%
closed sales down -3.4%
overall median sales price up +5.7%
*data source Minneapolis Area Association of Realtors.2019-07-24T06:00:00-07:002024-02-22T11:13:38-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:5015Twin Cities Housing Review May 2019Minneapolis-St. Paul Realtor Gives Housing Market Overview
As we look at the middle month of the spring housing market, we observe a trend towards a more balanced and sustainable real estate landscape. With the Fed holding steady on interest rates and even suggesting it may lower them, the concerns over rising costs of mortgages are behind us.
Although not growing as rapidly as in previous years, the economy is holding steady, and stocks are performing well. These factors create an atmosphere of consumer confidence in the economy, and the real estate market responds well to these conditions.
Although the inventory of homes is rising in the higher pricing tiers, supply remains constrained in the lower first-time buyer levels. The current situation is great for sellers, but it is still no bed of roses trying to break into the market and buy a home for buyers. It’s not surprising that we see fewer sales at this end of the market.
The MN Real Estate Market Ups and Downs
Comparing May of last year to the current year, new listings are up 2.4 percent. We’ll take it! The Median sales price gained 5.2 percent. At the same time, closed sales ticked up 3 percent, pending sales sunk 1.8 percent. Homes spent less time on the market, down 4.3 percent. We also see a decline of 0.2 in the percentage of sale price received, although it is still sitting at 100 percent, which gives sellers little reason to complain.
A Closer Look at the Housing Stats
We see the most significant gain in sales at the $350,001 to $500,000 price range, an 11.3 percent increase compared to May 2018. The most substantial price gains were in the condo segment, with a median price of $180,000, an 11.1 percent increase over last year. The quickest selling price range was $150,001 to $190,000 at 34 days. As you might guess, properties over $1,000,001 were the slowest moving of the pricing tiers at 172 days.
As we mentioned earlier, the supply of homes is up 0.5 percent, but we still are experiencing a shortage of lower-priced housing. Low inventory is a condition that doesn’t appear to be changing any time soon — the market segment with the most gain in single-family homes with a 0.7 percent gain in inventory. Townhome inventory is down 0.7, and condos are also down 1.8 percent.
The Twin Cities Economy
Consumers continue to feel confident about the economy. Although unemployment rates have ticked higher when compared to May of last year, up to four percent for the state of Minnesota from 2.5 to 2.9, the number is below the national average of 3.5 percent. Mortgage interest rates remain a great bargain, fluctuating from 3.875 to 4.125 over the last few weeks.
New Construction in the Twin Cities
The new home segment of the market has been up 4.2 percent over the past 12 month period. We also see the median sale price increase 0.7, days on the market up 1.1, and percentage of sale price down slightly by 0.2 percent over the last year. When we compare May 2019 to May of last year, inventory is up 9.5 percent, making us smile and bringing the monthly supply up 5.4 percent at 5.9 months.
While single-family new construction has fallen flat, a couple of major multi-unit projects in the Twin Cities brought the number of new units to be constructed to 1306 for May, far outpacing last year. However, 637 single-family permits represent a 3 percent dropoff from May 2018.
The decrease in single-family construction is partly due to the affordability factor. “The housing market is extremely undersupplied at the lower price points, and we cannot build at a price to relieve that pressure, which is keeping many homebuyers on the sidelines.” – said John Rask, president of Housing First Minnesota.
Hopefully, a solution will surface in the coming months. According to David Siegel, executive director of Housing First Minnesota, “We are hopeful that with the recent passing of the Legislative Commission on Housing Affordability we will be able to tackle some of the issues that are driving up the cost of housing in Minnesota.” He went on to say, “With approval from Gov. Walz, the multiyear commission will analyze issues relating to housing affordability and ultimately recommend housing policies that balance safety, durability, and affordability.”
Joe’s Twin Cities Housing Market Crystal Ball
My feelings about the 2019 housing market continue to be positive. However, when we talk about the market today, it’s important to note that we are significant differences between the lower price tiers and upper tiers.
Buyers looking for homes under $350,001 are still challenging to purchase a home given the limited inventory. On the other hand, at the $350,001 to $500,000 price range, inventory levels are approaching a balance, and above that, tier buyers have the advantage.
Last but not least, although not written in stone, a word that the Fed will likely cut the interest rate either this month or in September is good news for buyers. Reduced mortgage rates will soften the effect of higher prices and probably inspire buyers to close a deal on a home before the end of the year.
Twin Cities Housing May 2019 compared to May 2018
new listings up +2.4%
pending sales down -1.8%
closed sales up +3.0%
days on the market until closing down -4.3%
inventory of homes for sale up +0.5%
month’s supply of inventory flat
median sale price up +5.2% to $285,000
original list price received down -0.2%
the $350,001 to $500,000 price range saw the most gains, up +11.3%
Condos earned the most significant price gains for housing type, up +11.1%
new construction sales topped existing homes, up +4.2%
fastest-selling homes were priced from $150,001 to $190,000 (34 days)
Twin Cities Housing Stats from June 2018 to May 2019
new listings up +2.7%
pending sales down -1.8%
closed sales down -1.7%
overall median sales price up +6.5%
*data source Minneapolis Area Association of Realtors.
2019-07-03T12:00:00-07:002024-02-22T11:19:58-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:4904Twin Cities Housing Review April 2019Minneapolis-St. Paul Real Estate Big Picture
The Spring Housing Market is in play. Prices are on the rise as inventory levels continue to decline. Hopeful buyers in the lower price range are jumping on desirable properties hoping their offers rise to the top of the heap.
Months supply of inventory is improving in the mid-price housing range. We see steady sales activity in the higher price ranges, while in the lower tiers, buyers are still finding that landing a deal on a home to be a challenge, especially for desirable homes in sought-after locations.
What’s Up and What’s Down
Compare new listings to April of last year; we see an increase across the 16 county Twin Cities region of 4.5%. Closed sales were down 6.9%, while the median sale price rose 5.2%. Pending sales were also down 1.1%, and inventory levels were 1.2% lower.
April weather was wintery at times, which discouraged buyer traffic and slowed sales. This trend was seen across Minneapolis and other parts of the nation. Higher prices, less affordability, and low inventory combined forces dampening sales.
Let’s Dig a Little Deeper into the Housing Stats
While the median sale price rose 5.2% to $281,000 and days on the market, rose 5.7% to 57 days. The price range with the most significant gains in sales was $1,000,001 and above, showing an increase of 10.7 percent.
Condos enjoyed the most substantial price increases, up 12.4 percent to $179,900, while homes in the $190,001 and $250,000 range sold the quickest at 34 days. The maximum inventory gains were in the townhome segment, increasing 1.1 percent.
The Economy
Consumer confidence got a boost by National Unemployment at 3.6 percent. That figure represents the lowest since 1969. Although the Minnesota unemployment rate for April ticked up slightly to 3.3 percent, it is still below the national average, which should make us smile. While this is good news, higher prices are making affordability a factor.
Current interest rates remain low, fluctuating around the 4.25% mark. We currently see a 14 month low, which is exciting when you consider that a few months ago, predictions were they would be around 5% right now.
New Construction in the Twin Cities
Newly constructed homes saw gains of 3.7 percent in pending sales. The median sale price increased by 1.7 percent for April compared to 2018. Inventory levels were up 10 percent, and months supply rose 7.3 percent at 5.9 months. Sales of new homes were 3.7% stronger than sales of existing homes.
From the April Hotsheet
For March, building permits for single-family and multi-family units fell by double digits. Those numbers are the lowest for construction permits issued in the Twin Cities since 2015.
single-family permits: 339 down 12% over March 2018
multifamily permits: 623 units down 24% over March 2018
The decrease in permits pulled was partly due to a Twin Cities winter that just wouldn’t quit. “We are still feeling the lingering effects of a longer than usual winter on the housing market,” said John Rask, president of BATC-Housing First Minnesota. “We have seen homebuyers out in numbers during the Spring Parade of Homes, and we expect homebuilding activity to pick up in the coming months.”
Where Are Twin Cities Metro New Homes
Lakeville led with 35 permits issued. Following was Lake Elmo with 30, then Woodbury with 27, and Plymouth with 21. Otsego and Dayton are both tied with 17 tickets each.
I’m still optimistic that 2019 will continue to be a year of brisk home sales activity. The prospect of lower interest rates will lessen the impact of higher prices, but without doubt, inventory and affordability will continue to challenge first-time homebuyers.
Twins Housing Data April 2019 compared to April 2018
new listings up4.5%
pending sales down -1.1%
closed sales down -6.9%
days on the market until closing up 5.7%
inventory of homes for sale down -1.2%
month’s supply of inventory flat
median sale price up +5.2% to $281,000
original list price received down -0.5%
the top price tier of $1,000,001 and above saw the most gains, up 10.7%
Condos earned the most significant price gains for housing type, up +12.4%
new construction sales topped existing homes, up +3.7%
fastest-selling homes were priced from $190,001 to $250,000 (34 days)
12 Months Rolling Stats from May 2018 to April 2019
new listings up 2.7%
pending sales down -2.4%
closed sales down 3.1%
overall median sales price up +7.6%
*data source Minneapolis Area Association of Realtors.
2019-05-28T08:59:00-07:002024-02-22T11:23:40-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:4671MN Realtor on MSP HomesMN Realtor on the February 2019 Real Estate Market
As we move ever closer to spring, it looks like the prime season for housing is going to be hot. Buyers in the lower pricing tiers are currently getting a sneak peek at the challenges they will face in their quest to become homeowners.
When we compare new listings for February 2018 to this past month, we see a decrease of 14%, which is not good news for buyers. However, I would be remiss not to point out that weatherwise, February was a month characterized by lots of snowfall and bitter cold, which tends to put a damper on real estate activity.
Twin Cities Housing Market Overview
As we compare February of this year to 2018, we see that closed sales were up 4.0 percent, the percentage of list price received down 0.3, and the median sale price of $265,500 up 6.2 percent. Meanwhile, pending sales, the predictor of upcoming closed sales, was down 7.4 percent.
The February Supply Story
We find new listings in February were down 14.3 percent from last year, and inventory levels were lower by 5.9 percent, putting the month's supply at 1.6. Days spent on the market were flat.
The condo segment was the property type that saw the most price gains with a 10 percent increase — homes priced between $190,001 and $250,000 sold the fastest at 34 days. The townhome segment was the top gainer inventory-wise with a 0.8 increase.
The Economic Factors
Our economy continues to make us smile. Although the Minnesota unemployment rate for January ticked up slightly to 3.0 percent, still considerably less than the national average of 4.0. Confidence among consumers is holding steady; home prices are still gaining traction, and mortgage rates are holding at around 4.375 percent.
On the subject of interest rates, the great news is that the Federal Reserve is planning not to raise interest rates for the remainder of the year. Even given that fact, however, low inventory levels are putting the squeeze on buyers and forcing home prices every higher. Affordability continues to be a genuine concern.
New Construction in the Twin Cities
Pending sales of newly constructed homes gained 6.3 percent for February compared to last year. The median sales price enjoyed a moderate increase of 1.3 percent, while the Inventory of homes was up 6.8 percent.
New construction is still not meeting buyer demand, especially at affordable price points. The reasons remain the same as we have been reporting for many months now. Labor shortages persist in slowing housing starts while tariffs and local and state regulations make it challenging to build lower-priced homes.
I stand firm in my belief that 2019 will continue the trend of robust home sales. The lower interest rates will offset the higher sale prices of homes. So far, younger buyers continue to pursue the dream of homeownership with enthusiasm, which inspires my optimism. If we continue to experience low unemployment and a stable economy in “the Twins,” I’ll continue to raise my glass to the Minneapolis-St. Paul housing market future!
Twins Housing Data Feb. 2019 compared to Feb. 2018
new listings down -14.3%
pending sales down -7.4%
closed sales up +4.0%
days on the market until closing flat
inventory of homes for sale down -5.7%
month’s supply of inventory down -5.9%
median sale price up +6.2% to $265,500
original list price received down -0.3%
the price segment with the most gains was the $350,001 to $500,000, up 10.2%
The most significant price gain for housing type was condos up +10.0%
new construction sales topped existing homes, up +6.3%
Homes priced from $190,001 to $250,000 sold fastest at 34 days
12 Months Rolling Stats from March 2018 to Feb 2019
new listings down -0.4%
pending sales down -2.1%
closed sales up + 0.2%
overall median sales price up +6.3%
*source Minneapolis Area Association of Realtors.
2019-03-20T16:40:00-07:002024-02-26T10:47:12-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:4526Twin Cities Housing Review December 2018Minneapolis-St Paul Housing Data
As we say adios to 2018 and move into the new year, expectations include some long-awaited changes. In the last half of the year, we saw increases in new listings, decreases in sales, and median sales prices on homes rising more slowly.
The increases we are experiencing in no way are enough to balance the market at the lower pricing tiers. However, first-time buyers and downsizing boomers will begin to find more home buying options in the coming year. That fact alone will make buyers smile.
A Look at December Housing Numbers
Looking at a comparison of December 2018 to the same time last year, we see new listings up 3.5 percent, closed sales down 9.9 percent, list price received down 0.2 percent, and the median sale price of $258,000 up 4 percent. Pending sales showed a decline of 3.3 percent, while the month’s supply of inventory rose 13.3 percent. Days on the market decreased by 6.6 percent.
What story do these numbers tell us about the housing market in Minneapolis and Saint Paul? Pretty good news. We are finally starting to see more housing choices at lower pricing levels. Sellers are more flexible when they receive less than full-price offers. This situation takes some pressure off of buyers.
Sellers also have reason to smile. Property values continue to rise, with median sales prices up 4% over December 2017. Additionally, sales of homes are still brisk as we see days on the market drop to 57 from last year’s 61 days. Rising prices and shorter time on the market means demand for housing remains strong and desirable properties are moving to active contingent status quickly.
The Economic Picture
The Twin Cities economy continues to shine. Unemployment numbers for December were 2.8 percent, well below the national average of 3.9. Wages in the area grew 4.7 percent this past year.
The good news about mortgage interest rates is they continue down from the 52 weeks high of 5.2 percent. According to Bankrate, the benchmark 30-year fixed-rate mortgage fell this week to 4.59 percent. The decrease in rates is excellent news for both buyers and sellers.
New Construction
In December, pending sales for new home sales were up 6.6 percent compared to 2017. The median sales price grew moderately with a 1.4 percent increase in the cost of new homes in the Twin Cities. In the new construction category, Inventory advanced 22 percent and the monthly supply by 13.2 percent. Still not anywhere as much as needed, but we’ll take it.
December was a strong month for new construction; however, when we look at 2018, building permits were flat. Tom Wiener, president of Housing First Minnesota, observed that “Despite slower growth than expected in 2018, it was a solid year for new home construction. There’s high demand for new housing in the Twin Cities, and builders are innovating to meet homebuyers' needs and budgets.”
We need to do better. As David Siegel, executive director of Housing First Minnesota, said, “Rising construction and regulatory costs combined with increasing mortgage rates are only adding to the housing affordability problem in the Twin Cities. We need to address this issue so we can bring down the cost of housing for Minnesota families.”
Twin Cities data for December 2018 compared to December 2017*
new listings up +3.5%
pending sales down -3.3%
closed sales down -9.9%
days on the market until closing was 57, down -6.6%
inventory of homes for sale down +4.5%
month’s supply up +13.3%
median sale price up +4.0% to $258,000
original list price received down -0.2%
the highest sales gain was in the $250,001 to $350,000 price tier, up 10.4%
the most significant price gain segment was townhomes up +9.2%
new construction sales topped existing homes, up +6.6%
the price range that sold fastest was $190,001 to $250,000 at 33 days
* Data supplied by The Minneapolis Association of Realtors 2019-01-23T21:01:00-07:002024-02-22T12:13:05-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:4481Twin Cities Housing Review November 2018 Minneapolis-St Paul Housing Overview
As we approach years’ end, we see some subtle changes in the Twin Cities Metro housing market. The increase in inventory of homes for sale was10.5 percent over last month giving home buyers something to rejoice. This inventory boost by is by no means enough to bring the market into balance but does bring us closer. For consumers who have been trying to buy a home for several months, it was welcome news.
What’s Up and What’s Down
As we compare November of this year to November 2017, we find new listings up 12.6 percent, closed sales down 0.9 percent, the percentage of list price received down 0.1, and the median sale price of $265,150 up 8.2 percent. Meanwhile, pending sales were down 5.2 percent, inventory levels rose 2.3 percent with months supply up 10.5 percent. Days on the market fell 7.1 percent.
So while inventory is increasing and sales are decreasing, we are seeing more price reductions and fewer deals closing for full price offers. Although housing prices are still higher than last year, they appear to be slowing down. Properties for sale are still spending less time on the market than last year, an indication that demand is still robust, and buyers are scooping up homes quickly.
The Economy Continues to Perform Well
Our local economy remains strong. The unemployment rate for November in the Twin Cities was 2.8 percent, well below the national average of 3.7. Confidence among consumers is holding steady, in spite of rising interest rates and home prices.
Mortgage interest rates hit 4.94 percent, the highest they have been in 7 years according to Freddie Mac. Currently, rates are at about 4.62% for a 30 year fixed rate mortgage. While inventory is increasing and prices are stabilizing, higher interest rates continue to affect housing affordability and are a concern to home buyers.
New Construction
Pending sales for new home sales were up 8.3 percent for November over last year. The median sales price of new construction showed a moderate increase of 1.4 percent. Inventory of homes in the new construction category was up 13.9 percent.
We have been reporting consistently that a labor shortage has been a significant reason for slowing new construction starts. We didn’t realize how large a concern availability of workers has become. A recent BATC Housing Minnesota survey of 225 housing construction firms found that 88% of them said they had experienced a labor shortage over the last 12 months. Also, 63 percent said the lack of workers had forced them to turn away customers.
According to the BATC article, “The results of this survey confirm that the labor shortage is now contributing to Minnesota’s housing shortage and housing affordability problem,” said David Siegel, executive director of Housing First Minnesota and Project Build Minnesota board member. “We must take action now to alleviate the labor shortage before this issue worsens. Governor Dayton has called on our industry to build 300,000 new homes in the next ten years, and that will be exceptionally difficult if we don’t address this labor shortage.”
Joe’s Crystal Ball
Jobs are still the high note on the economic front. A robust job market imparts confidence in home buyers. The continued shortage of housing combined with the rising cost of buying a home will continue to challenge buyers at the lower prices ranges.
The fed raised the interest rate at the December meeting as expected, but they did mention possibly only raising the rate twice next year instead of the three increases they originally planned for 2019. It’s too early at this point, to project.
The trade war is still a factor to consider vis a vis the economy with some economists predicting we will begin noticing the adverse effects in 2019 unless China and the US can come to a trade agreement over the next couple of months. <a href="https://www.bloomberg.com/news/articles/2018-12-25/world-economy-is-set-to-feel-the-delayed-trade-war-pain-in-2019" target="_blank" style="font-family: sans-serif; font-size: large;">According to Bloomberg</a>, “recent data underscore concerns that trade will be a drag on American growth next year. U.S. consumers are feeling the least optimistic about the future economy in a year, while small business optimism about economic improvement fell to a two-year low and companies expect smaller profit gains in 2019.”
For now, at least, I stand firm on my prediction for a strong year in Real Estate. I’m optimistic about the rise in inventory and the possibility that interest rate hikes may be slower next year. As long as we see low unemployment numbers here in “the Twins” I'm doing to give the housing market future the thumbs up!
Twin Cities Market data for November 2018 compared to November 2017
new listings up +12.6%
pending sales down -5.2%
closed sales down -3.2%
days on the market until closing was 48, down -7.1%
inventory of homes for sale down +2.3%
month’s supply of inventory up +10.5%
median sale price up +8.2% to $265,150
original list price received down -0.1%
the price range that saw the highest sales gain was the $250,001 to $350,000 up 10.5%
property segment with the most significant price gain was townhomes up +9.0%
new construction sales topped existing homes, up +8.3%
the fastest selling price range was $190,001 to $250,000 at 34 days
Rolling 12 months from December 2017 through November 2018
new listings down -0.4%
pending sales down -3.8%
closed sales down -3.2%
overall median sales price up +7.8%
*source Minneapolis Area Association of Realtors.
<br />
2018-12-26T17:35:00-07:002024-02-22T12:22:13-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:4447Twin Cities Housing Report October 2018The Minneapolis-St Paul Housing Market Overview
As we look at the Twin Cities Housing Market Statistics for the first month of the final quarter of 2018 the one thing that hasn’t changed for months is the shortage of properties for sale in the lower end of the market. With so few homes that fit their budget, coupled with rising home prices and interest rates, would-be buyers continue to struggle with fulfilling their dream of ownership. Homes at this price range are still selling quickly, but we are finally starting to see that shift we have been talking about, in market conditions overall as we look at narrowing gaps in year over year data for sales, inventory, and price.
What’s Up Doc?
As we compare October of this year to October 2017, we find new listings up 9.2 percent, closed sales rose 3.4 percent, the percentage of list price received up 0.2, and the median sale price of $265,000 up 8.6 percent. Meanwhile, pending sales were down 1.7 percent, inventory levels dropped 2.2 percent, days on the market fell 7.7 percent. In summary, in the Twin Cities 16 county metro at least, we are still experiencing fewer homes on the market taking less time to sell with prices even on an upward trajectory.
What About the Economy?
Our local economy remains strong. The unemployment rate for October in the Twin Cities was 2.1 percent and 2.8 for the entire state. Both are lower than the national average of 3.7. Yea Minnesota! Consumer confidence is still strong, but there have been concerns and rightly so. The stock market took some heavy downward hits, although it has rallied. The trade wars and higher costs for raw materials and finished goods that it brings with it are having effects on the future job market (think GM impending layoffs) and retail pricing.
On the mortgage front, rates are still hovering and holding steady at 5 percent, but we have another Fed meeting right around the corner on December 18-19. The expectation is another hike. Originally four more were predicted for 2019, but a November announcement indicated they were considering slowing down the increases. Of course, that will depend on jobs and the growth of the economy.
New Construction
Pending sales for new home sales were up 7.8 percent for October over last year. Prices continue to climb with a rise of 0.7 percent. Inventory of homes in the new construction category was up 8.4 percent.
While more new homes become available, it is still not adequate to meet the demand in price points below the $500,000 range. Since we reported last month, there is no change in regards to the tariffs on lumber driving up costs and the shortage of labor in the building trades.
Joe’s Crystal Ball
We continue to enjoy the positive job and economic numbers. Interest rates are the big question mark. We know they will continue to rise, but not how fast. As far as December goes, I give even odds as to the Fed staying the course or another increase. At this point, we don’t know what impact these rate hikes are going to have on the market next year.
What we do know is that we see more balance in the higher price categories. We have seen many homes take longer to sell, and more price reductions. Sellers are now having to face the reality that homes are not selling in record time at full price like they were last year. However, I still see a Twin Cities market that still has room for growth, although more slowly. Even with rising rates, homes are selling well. A great deal is going to hinge on the stock market, jobs, and the effects of the trade war.
This realistic optimist still sees a half-full glass and a healthy housing market moving closer and closer to balance. Balance is not a bad thing over the long range; it’s more of a favorable environment as a whole. The housing market still gets a smiling emoji from me. <img src="/res/tiny_mce/plugins/emotions/img/smiley-smile.gif" alt="Smile" title="Smile" border="0" />
Twin Cities Market data for October 2018 compared to October 2017
new listings up +9.2%
pending sales down -1.7%
closed sales up +3.4%
days on the market until closing was 48, down -7.7%
inventory of homes for sale down -2.2%
month’s supply of inventory flat at 2.4 months
median sale price up +8.6% to $265,000
original list price received up 0.2%
the price range that saw the highest sales gain was the $250,001 to $350,000 up 11.4%
property segment with the most significant price gain was townhomes up +9.0%
new construction sales topped existing homes, up +7.8%
the fastest selling price range was $190,001 to $250,000 at 35 days
Rolling 12 months from November 2017 through October 2018
new listings down -1.1%
pending sales down -3.8%
closed sales down -3.5%
overall median sales price up +7.7%
*source Minneapolis Area Association of Realtors<br />2018-11-30T15:30:00-07:002024-02-22T12:26:25-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:4406Twin Cities Housing Report September 2018The Minneapolis-St Paul Housing Market
Some say there are indications in the September housing stats that the market might be starting a shift towards balance. New listings increased 5.9 percent compared to September of last year. However, when we look at months supply of inventory that was down 3.4 percent. So what does this mean?
Let’s keep in mind that although we see balance in the market pricing tier for $500,000 and above, inventory levels in all other price segments are not even close to approaching balance which is a five to six month level of homes for sale. If you are one of those hoping to break into the housing market, your choices are limited with desirable properties selling like lightning going through butter.
Probing into the data, we see that median sales prices are still higher than last year by 6.5 percent when we look at month to month and 7.7 percent over last year when we compare the year over year data. Closed sales are down 5.8 percent and pending down 1.8 percent with properties spending 16 percent less time to sell.
Interest rates are bobbing around the 5 percent rate for mortgages which, combined with higher prices of homes may be sidelining some buyers and forcing others to rethink their home buying strategies. These numbers tell me demand is still strong. It’s outweighing supply, and low inventory levels are what is keeping sales figures down over last year. There are also outside economic and political factors to consider, which I will address shortly.
MN New Construction
Sales of newly constructed homes were up 9 percent over last year. Median sales price gains were modest at 1.3 percent but still on the upward trend. Inventory of homes for sale was up 10.3 percent and months supply up 1.8 percent. There are more newly constructed homes this year than last but still not a sufficient supply to satisfy the demand for housing.
What is holding back new construction? Same old story from last month still holds. Labor shortages and tariffs on lumber driving up costs. This situation makes it especially difficult at the lower price range where we need the most inventory. The National Association of Homebuilders conducted a study that says tariffs are increasing the cost of a new single-family home by approximately $9000.
Economic Indicators – Good and Not So Good
The good news on being a tad late with our report this month is we get to see the latest on the national economy job numbers. October the first month of the last quarter was strong. The economy added 250,000 new jobs. The national unemployment rate remained at 3.7 percent. The latest figures for Minneapolis<a href="https://www.bls.gov/web/metro/laulrgma.htm" target="_blank"> </a>are for August, which puts us at 2.5 which is the lowest rate compared to other metros.
Average earnings were up 0.2 percent which is 3.1 percent higher than last year. The economy grew at 3.5 percent. While we finally see modest wage growth, the numbers for this month compared to the previous year can be deceiving due to a downward revision in the September figures. The most important factor to look at is consumer confidence. There is at this time an 18 year high in how Americans view the economy. However, a recent study by Fannie Mae found that 24 percent of Americans feel the time was right to buy a home compared to 54 percent five years ago.
The less than great factors concerning the future outlook of the economy and housing is the stock market. Right now it is falling and all gains that were made over the last year have been wiped out. Investors are nervous about tariffs, and rising interest rates. Right now, the election we will have in a few days is sucking all the oxygen out of the air for many sellers and buyers, waiting on the outcome.
MN Real Estate Predictions
While we love seeing the good job and economic numbers, these factors will most likely keep the Fed on a steady course to raise interest rates again in December. We don’t like this much. The higher cost of a mortgage, higher home prices, and limited inventory are going to continue to subdue the housing market.
I also see a lot of buyer fatigue and frustration over lack of homes available for sale. So it is going to be a matter of finding a tipping point, where buyers will draw a line and feel the higher costs of homeownership less appealing than renting. At this moment in time, I do not think we have reached that point. I still think the housing market is stable and no bubbles will be bursting any time soon.
While I’m always tracking reputable sources of information, and predictions of experts on what all these individual factors mean about housing, we still see positive gains here in the Twin Cities. I’m again seeing the glass as half full and feel we are working more towards a balanced market than a gloomy future on housing.
Real Estate data for September 2018 compared to September 2017
new listings up +5.9%
pending sales down -1.8%
closed sales down -5.8%
days on the market until closing was 42, down -16.0%
inventory of homes for sale down -4.4%
month’s supply of inventory down -3.8%
median sale price up 6.1% to $262,000
original list price received up 0.3%
the price range that saw the highest sales gain was the $350,001 to $500,000 up 12.6%
property segment with the most significant price gain was townhomes up +9.9%
new construction had the most robust sales up +9.0%
the fastest selling price range was $190,001 to $250,000 at 35 days
Rolling 12 months from October 2017 through September 2018
new listings down -2.0%
pending sales down -4.2%
closed sales down -4.5%
overall median sales price up +7.7%
*source Minneapolis Area Association of Realtors.2018-11-02T12:06:00-07:002024-02-22T13:10:11-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:4181August 2018 Twin Cities Housing Snapshot The Minneapolis-St Paul Housing Market Overview
As we look at the end of the summer real estate season, things have not changed very much. We see new listings up 7.6 percent over August of last year, which is a bright spot. However, for first-time home buyers, the story is still one of the limited housing choices facing continued strong demand. The situation when we look at listings under $300,000 is still critical regarding supply. The higher we go up the price tiers, the more balance we see. Properties priced from $500,000 up to $1,000,000, offer a more balanced market in which buyers have more options compared to the over $1,000,000, strata, which is a buyers market.
Looking deeper into the data gives us some reason to be optimistic but cautiously so. Even though we saw an increase in new listings, inventory levels fell 8 percent from last year. Pending sales were down 2.9 percent and closed sales ticked slightly upward at 0.2 percent over the same time last year. Home values continue to move upward to the tune of 6.3 percent while spending less time on the market. Buyers at the lower price range are making full price offers or engage in bidding wars to close a deal.
New Construction in the Mpls St Paul Metro
Although we are experiencing increases in new construction over last year, it is an ongoing struggle to keep up with demand. Single-family home permits were up 3 percent over August of 2017 but up only 2 percent over the year. Multi-family housing saw an 80 percent increase this past month as well Total permits issued were 680 for a total of 1,355 units of housing. We saw a 5.6 percent increase in newly built homes for sale in August and based on the increased number of permits issued we should expect that number to rise.
We still need more housing, especially at the lower price points. Tom Wiener, president of Housing First Minnesota<a href="http://blog.batc.org/new-home-construction-sees-modest-growth-in-august/" target="_blank" style="font-family: sans-serif; font-size: medium;">,</a> said “It’s been a decent summer for Twin Cities homebuilders. While we’ve seen steady growth, the market needs a stronger rise in new home construction to help balance the housing market.” Unfortunately, labor shortages coupled with tariffs imposed on lumber by the Trump administration are driving up the cost of new construction. The National Association of Homebuilders<a href="http://realtybiznews.com/how-lumber-tariffs-affect-new-construction/98749417/" target="_blank" style="font-family: sans-serif; font-size: medium;"> </a>estimates that tariffs by themselves have added approximately $9000 to the price of a new single-family home.
Economic Indicators impacting MN Real Estate
Lots of stuff to talk about on the economic front – some good and some not so good. Let’s start with the positive news. The Twin Cities unemployment rate fall to 2.9 percent. It has not been this low since 1999. In the second quarter, the GDP was at 4.1 percent. Those are the most robust numbers since 2014.
Wages are finally rising, but I wouldn’t be popping the cork off that bottle of bubbly just yet. Earnings increased 2.6 percent over the last 12 months. Real wage growth was up 0.1 percent in August, as reported by the Department of Labor. While you may be thinking, this can’t be because tax cuts, stock market growth, full employment, in a nutshell, rising costs are wiping out any increases in wages, and then some.
That is the perfect segway into the bah humbug news segment of the program. Wage increases are not enough to keep up with rapidly rising housing costs. Home prices in the Twin Cities were up 6.3 percent. Not only that but, interest rates continue their upward mobility. As of today, the 30-year mortgage interest rate is 4.875 percent. The Fed meets this month on the 25/26 and is expected to raise the short-term fed funds rate by a quarter-percent to a range between 2% and 2.25%. That’s the highest level since April 2008. It is not always a given that the mortgage rate will follow so we will have to wait and see on that one.<br />
MN Realtor Predictions
The due to rising interest rates and limited inventory, we should not be surprised to see a slowdown in the real estate market as we move through the fall. This is still a good time to buy a home. However, I believe the market is stable, and talk of housing bubbles bursting is hyperbole. The economy is strong, at least for now. We are at full employment and still creating jobs, and consumers are still confident. We need to keep watching the interest rates and the Fed. No one should show surprise if they hit 5 percent for a mortgage loan by the end of the year. As the trade war intensifies, we also need to watch how that affects the economy regarding consumer prices and jobs.
Twin Cities Market data for August 2018 compared to August 2017
new listings up +7.6%
pending sales down -2.9%
closed sales up +0.2%
days on the market until closing was 40, down -16.7%
inventory of homes for sale down -7.8%
month’s supply of inventory down -3.8%
median sale price up 6.3% to $268,000
original list price received up 0.7%
the price range that saw the highest sales gain was the $350,001 to $500,000 up 12.3%
property type with the largest price gain was townhomes up +9.2%
new construction had the most robust sales up +8.5%
the quickest selling price range was $150,001 to $190,000
Rolling 12 months from September 2017 through August 2018
new listings down -2.9%
pending sales down -4.5%
closed sales down -4.5%
overall median sales price up +7.7%
*source Minneapolis Area Association of Realtors.
<a href="https://www.mnpropertygroup.com/blog/thinking-about-selling-do-it-now-heres-why/"></a>
<a href="https://www.mnpropertygroup.com/blog/thinking-about-selling-do-it-now-heres-why/"></a>2018-09-22T12:53:00-07:002024-02-22T13:16:41-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:4112Twin Cities Metro Housing Market Statistics July 2018Mpls MN Real Estate Data
As we look at the data for July, we see the reason for buyers to be a bit more optimistic. Although this is still a market that favors sellers at price ranges under $500,000, we did see an increase of 4.1 percent in new listings when compared to July of last year. However, buyers should hold off popping the cork on that bottle of champagne because it is sellers that have a reason to celebrate with the median sale price up 6.6 percent over the same time last year. Pending sales were up 0.4 percent and closed transactions were flat with days on the market falling 17.4 percent and inventory levels down 13.4 percent.
Although we hear the terms “housing market bubble” and “real estate market shift” being bandied about by analysts, economic indicators may be pointing to a slowdown but not a bursting bubble. Past the middle of the year and heading into the end of summer we continue to see record low unemployment and the longest running bull market in history, in spite of trade wars and rumblings about impeachment. While we may be wise to pay attention to the former, history proves the latter will have little or no effect on stocks, housing or the economy in general. <br />
MSP Economic Indicators That Impact MN Real Estate
The second quarter report on the economy showed GDP growth the strongest it has been since 2014 at 4.1 percent. Consumers are expressing their confidence by spending more. Although wage increases are not keeping up with rising housing prices, this coupled with higher interest rates are inspiring talk of more balance to the market moving into the fall. But based on what I am seeing regarding numbers for the first weeks of August, they are not consistent with a shift happening anytime soon.
Top Mpls St. Paul Realtors Predictions
Based on the increase in new listings, new construction entering the market, consumer confidence, continued low unemployment and the strong economy lead me to give a thumbs up for the housing market. Racing towards the end of summer and approaching the second best home buying season of fall, I see no balance for the housing market on the horizon, and the only bubbles I see are the ones coming from my little guy’s magic bubble machine!
MSP Real Estate data for July 2018
When we compare the numbers for July to the same time last year here is what we learn.
new listings up +4.1%
pending sales up 0.4%
closed sales down 0.0%
days on the market until closing was 38, down -17.4%
inventory of homes for sale down -13.9%
month’s supply of inventory down -11.1%
median sale price up 6.6% to $268,000
original list price received up 0.7%
the price range that saw the highest gain in sales was the $350,001 to $500,000 up 14.1%
property type with the largest price gain was townhomes up 8.7%
new construction outperformed previously owned properties in pending sales up 11.0%
the quickest selling price range was $190,001 to $250,000 at 36 days
Rolling 12 months from August 2017 through July 2018
new listings down -4.4
pending sales down -4.9%
closed sales down -5.6%
overall median sales price up 8.2%
This data represents the 16 county Minneapolis-St. Paul metro. Since real estate is hyper-local, the numbers for any particular community may be different.
*Market data source Minneapolis Area Association of Realtors.
2018-08-27T13:56:00-07:002024-02-26T10:45:42-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:4059Twin Cities Housing Market Review June 2018June 2018 Snapshot – Twin Cities Housing
As we close out the second quarter of the year and head into summer nothing much has changed regarding the ups and downs of Minneapolis-Saint Paul housing stats. Anyone who has been following the housing market in the Twin Cities will not be surprised by the June data. Inventory of homes continues to decline, ditto closed sales, pending sales, and days on the market. What’s up? The median sale price continues to rise. The constraint on sales is a reflection of low supply alone while demand remains strong.
We are halfway into the year with a strong economy and a real estate market that is responding accordingly. Consumers continue to have confidence and a positive outlook for the future. With unemployment at all-time lows and wages rising, home buyers have a reason to be optimistic. Even with interest rates inching upward, demand for homes remains steady.
On the supply side, builders are shifting resources from rental units to single family new construction. Sellers are also considering this may be the best year to make their move and listings are expected to increase accordingly. Things are looking rosy, and we give a thumbs up to the rest of the year regarding housing.
Twin Cities Market data for June 2018
When we compare the numbers for June to the same time last year here is what we learn.
new listings down -1.2%
pending sales down -2.6%
closed sales down -8.1%
days on the market until closing was 41, down -14.6%
inventory of homes for sale down -15.9%
month’s supply of inventory down -14.8%
median sale price up 5.7% to $271,900
original list price received up 0.8%
price range with the highest gain in sales was the $500,001 to $1,000,000 up 13.1%
property group with the most significant price gain was townhomes up 9.7%
new construction outperformed previously owned properties in pending sales up 10.8%
the quickest selling price range was $190,001 to $250,000 at 37 days
Rolling 12 months from July 2017 through June 2018
new listings down -5.9
pending sales down -6.0%
closed sales down -7.2%
overall median sales price up 8.6%
The data presented here is for the 16 county Minneapolis-St. Paul metro. Since real estate is hyper-local, the numbers for any particular community may be different. If you want data on any city, you can find it on the Minneapolis Association of Realtors website.
Buyers, do not be deterred because in spite of inventory constraints it is still an excellent time to buy given the robust economy and interest rates still a bargain. Sellers, it doesn’t get any better than this. Let’s do it!
If buying or selling a homeIf the purchase or sale of a home is on your agenda; please consider giving me a call if you have questions.
2018-07-24T15:19:00-07:002024-02-22T13:41:05-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3990Twin Cities Metro Housing Market Statistics April 2018The Twin Cities Housing April 2018 Snapshot
I'm not going to lie to you; housing inventory is at a new all-time low.<a href="http://www.startribune.com/twin-cities-housing-market-gets-tighter-with-less-than-10-000-homes-on-sale/483346501/?om_rid=1610748361&om_mid=89639369" target="_blank"> </a>However, we have a reason for optimism as new listing numbers are improving. Let's also keep in mind that the early part of April felt more like January this year, with significant snowfall and low temperatures, which may have held some potential sellers in winter hibernation mode. Still, sellers and builders see a continued strong economy and are encouraged by a market poised to bestow significant financial gains.
For buyers, this market is still certainly challenging. Home values continue to rise while days on the market are fewer. The median sale price for April was $266,000, up 8.6 percent and days on the market fell 10.2 percent compared to April of last year, which drives home that buyers do not have the luxury of dawdling when it comes to offers. Additionally, buyers now have rising interest rates to contend with as well.
Twin Cities Economy and Housing Market is Strong
The factors of steady employment, rising wages, increased consumer spending indicate continued confidence in the economy<a href="https://www.reuters.com/article/us-usa-economy-housing/u-s-consumer-confidence-housing-data-highlight-economys-strength-idUSKBN1HV1U3%20%20%20" title="U.S. consumer confidence, housing data highlight economy's strength" target="_blank"> </a>and a healthy housing market. If this remains true, buying a home will be an attractive investment. Although buyers may have to make adjustments, they should not find rising mortgage rates enough to deter them from purchasing a home.
May looks encouraging, with new listings down only 0.1 percent from the same time last year. From all appearances, it seems like we will enjoy another great year for real estate and the Twin Cities Housing market.
Twin Cities Market data for April 2018
Here are some comparisons of April 2018 real estate market stats the to the same time last year.*
new listings down -7.2%
pending sales down -6.6%
closed sales down -5.2%
days on the market until the deal was 53, down -10.2%
inventory of homes for sale down -25.1%
month's supply of inventory down -25%
median sale price up 8.6% to $266,000
percent of original list price received up 0.8%
the price range with the most significant gain in sales was $1,000,001+, up 16.9%
the property type with the most considerable price gain was townhomes up 8.6%
new construction outperformed previously owned properties in pending sales, up 11.9%
the quickest selling price range was $190,001 to $250,000 at 38 days
Rolling 12 months from May 2017 through April 2018
pending sales down -8.2%
closed sales down -5.7%
overall median sales price up 9.8%
new listings down -10.6
Please remember that these statistics are for the Twin Cities region. Since real estate is hyper-local, the numbers for any particular community may be different.
The market indicates it is a great time to sell and buy real estate. Even with the challenges you may face as a buyer, the value of housing continues to increase, and the market remains healthy for the foreseeable future. Interest rates are rising but still historically a good deal.
What's holding you back? If you consider purchasing or selling a home, please give me a call if you have any questions.
*Market data source Minneapolis Area Association of Realtors.
Here are a couple of other recent posts you might find helpful.
<a href="https://www.mnpropertygroup.com/blog/spring-prime-time-for-home-sales/" target="_blank">Spring Prime Time For Home Sales</a>
<a href="https://www.mnpropertygroup.com/blog/is-2018-the-year-of-the-home/" target="_blank">Is 2018 The Year of The Home</a>2018-05-22T11:17:00-07:002024-02-22T13:52:02-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3978March Twin Cities Housing Market ReviewThe Twin Cities Housing Market Snapshot
Many consider March to be the kick-off month for <a href="https://www.mnpropertygroup.com/blog/spring-prime-time-for-home-sales/" title="Spring Prime Time for Home Sales" target="_blank">the busiest Real Estate season,</a> spring. The market experienced a slight cooling with pending and closed sales both down. Interest rates have climbed and been hovering around 4.5% which is the highest they have been since 2013. Buyers may be taking a breath, and holding back again to re-evaluate and rethink their strategy. They may be considering the options of paying more each month or settling for less house.
Still, days on the market continue to decline, homes are still being sold at asking price or above, and the median sale price up 9.8% over last year. Inventory of homes, however, continues to shrink. Inventory declined 26.1%. Sellers continue to play it coy with new listings also down 17.5%. These numbers seem to indicate that the slowdown in sales is more the result of low supply rather than a lack of enthusiasm on the demand side of the equation.
The good news is that April is looking better in terms of new listings. Although the numbers are still down over last year, they are improving. This is due in part to new construction with builders having more confidence on a good return on their investment.
Let’s take a deeper dive at the month of March 2018 real estate market stats in comparison to the same time last year. *
Twin Cities Market data for March 2018
new listings down -17.5%
pending sales down -12.2%
closed sale down -10.3%
days on the market until sale was 57, down -21.9%
inventory of homes for sale down -26.1%
month’s supply of inventory down -22.7%
median sale price up 9.8% to $258,000
percent of original list price received up 1.1%
12-Month Rolling Data from April 2017 through March 2018
pending sales down -2.0%
overall median sales price up 7.1%
price range with the largest gain in sales was the $1,000,001+, up 18.1%
the property type with the largest price gain was townhomes up 8.9%
new construction outperformed previously owned properties in pending sales up 11.8%
the quickest selling price range was $190,001 to $250,000 at 39 days
*Market data source Minneapolis Area Association of Realtors. 2018-05-03T08:26:00-07:002024-02-22T13:58:42-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3901February 2018 Twin Cities Housing Market Review Not a Market for the Fainthearted
Looking at the housing market in the Twin Cities for February we are going to be focusing on four factors; an ever-shrinking supply of inventory, declining home sales, a consistently upward trend of median sales prices, and rising interest rates. The market activity we are seeing here pretty much reflects what is happening across the nation.
While we might not expect prices to climb when sales fall, this downward trend is more a result of seriously limited inventory levels coupled with strong demand. There are simply too many buyers chasing too few homes and for a nervous buyer, this may be situation impossible.
The Market in the Twin Cities is Starving for Listings
New listings declined 8% over February of last year while inventory levels dropped 23% putting the supply of homes at 1.5 months. At the same time, the median sales price of homes in the Twin Cities metro rose 12.7% to $250,000. This rise in prices is partly a reflection of bidding wars on desirable properties where supply is so limited.
The same theme of the last 2 years continues with a vengeance: ready, willing, well-qualified buyers who desperately want to become homeowners being thwarted because there just not enough listings to go around.
What Rising Interest Rates Mean for Twin Cities Housing
We have long talked about an impending increase in mortgage rates. Well, higher rates have arrived. The 30-year fixed sits at its highest point in four years, 4.5 percent. The higher rates coupled with the rising price of homes have begun to make an impact on affordability. Some buyers at the lower price ranges have found it necessary to drop out of the market until they can save a higher down payment or wait for a fixer-upper to come along that may work for them. Buyers at higher price points are faced with the option of either coming up with a higher down payment, accepting a higher monthly payment, or lowering their expectations and settling for a less of a home.
Market Snapshot
A quick look tells us that all the numbers are down this month except for prices, which are still increasing by double digits percentage wise.
new listings down -8.0%
pending sales down -12.1%
closed sale down -6.0%
days on the market until sale was 69, down -15.9%
inventory of homes for sale down -23.0%
month’s supply of inventory down -21.1%
median sale price up 12.7% to $250,000
percent of original list price received up 1.6%
When we look at the 12 month rolling data from March 2017 through February 2018, we see that constrained inventory levels are affecting sales in a negative way.
pending sales down -8.2%
Closed sales down -4.5%
overall median sales price up 11.5%
price range with the strongest sales was the $1,000,001 price range, up 21.6%
the property type with the strongest sales was townhomes
the quickest selling price range was 150,001 to $250,000 at 40 days
New Construction
Townhome construction in the Twin Cities is hot, representing the largest increase for February. Multi-family new construction, in general, was up a whopping 42% over this time last year with 548 permitted units. Construction of single-family homes was only up slightly with 341 permits pulled as compared to 332 in February of 2017.
This increase in townhomes will provide more options for both entry-level Millennial buyers and Boomers who are retiring and want to downsize. This may be the incentive that some older homeowners need to make their move. Area builders are working hard to meet the demands of the housing market but lack of workers is still a challenge they face. The labor shortage is the largest obstacle they see moving forward into the year. Where is the new construction? Lakeville leads with 30 permits. Plymouth came in second with 26, followed by Woodbury with 21, Savage with 20, and Otsego and Minneapolis with 18 permits issued each. If you really want to get into the weeds on new construction in the Twin Cities, check out this post on Housing First Minnesota. It contains some very comprehensive data.
Twin Cities Housing Outlook Heading into Spring
Demand remains strong in spite of a disappearing supply of homes to buy, while interest rates and median sales prices continue to rise making housing less affordable. We knew eventually such few homes would lead to a decline in sales and we knew interest rates would go up at some point. Both situations have now become a reality as we head into the prime home buying season. While I am optimistic this is going to be another good year for the real estate market, my optimism is slightly shadowed by factors out of our control. These are the questions begging answers. Will previously reluctant sellers see this as the right time to make a move while the odds are still favoring them greatly? Will Millennials maintain their burning desire to become homeowners at almost any cost? Will consumer confidence in the economy remain strong? As I pointed out in my report last month, there are lots of moving parts like the effects of looming tariffs, the stock market and the job market to consider and I’m watching them all closing. Unfortunately, I don’t have a Crystal ball. However, as a prognosticator this is what I see: buyers remaining determined and doing what they feel they have to do to score a home. The norm will be quick offers at asking price or above, bidding wars, waiving of contingencies, foregoing inspections in some cases, and if at all possible, larger down payments. It’s going to be a wild ride so put on your seatbelt and let’s go buy that home! The data used in this report was for the entire Twin Cities Metro. Stats for the individual cities within the region may tell a different story. If you are interested in looking deeper the reports are available to the public on the Minneapolis Association of Realtors website.
Other posts you may like: <a href="https://www.mnpropertygroup.com/blog/is-2018-the-year-of-the-home/" target="_blank">Is 2018 the Year of the Home?</a> <a href="https://www.mnpropertygroup.com/blog/10-ways-to-grab-buyers-at-hello/" target="_blank">10 Ways to Grab Your Buyer at Hello</a>2018-04-05T13:40:00-07:002024-02-22T14:03:15-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3849The Twin Cities Housing Market January 2018 ReviewJanuary Twin Cities Housing Inventory Sinks Lower
We are now several years into a housing market where buyer demand is strong and inventory of homes for sale is limited and ever shrinking. This buying mania has been fueled largely by a strong economy with low unemployment, a robust stock market, and historically low mortgage interest rates. In addition, the high cost of renting has made owning a home the best option in the Twin Cities, as well as a wise financial decision. It was the strong incentive many first time home buyers needed to get off the fence and pursue the American dream of homeownership. And chase that dream they did!
Buying vs Renting Pros and Cons
We just capped off a record-breaking year for real estate. The story for 2017 was powerful across the nation. In the Twin Cities, the median sales price reached an all-time high. Closed sales broke a twelve-year record high even with inventory levels at a 15 year low. There were lots of reasons for sellers to celebrate. Homes for sale spent less time on the market with full price offers the norm. The market was rocking and tenacious buyers were the rocket fuel that propelled it.
As we look at the first month of the brand new year, January is about supply or I should say, the lack of it. This is the third consecutive month of a decline in new listings leading to lower numbers in both closed and pending sales. When we make a comparison to January of last year, we find an inventory of homes for sale down over a quarter and inventory levels at 1.3 months. When you consider a balanced market is 5-6 months of homes for sale, you can see how strongly this market favors sellers. The competition is fierce with desirable homes often bringing in offers above asking price. Buyers today are considering themselves lucky if they avoid a bidding war.
Interest Rates
The long-predicted rise in interest rates arrived. The 30-year mortgage interest rate sits at 4.5%, the highest it has been in 4 years. What happened to cause this upward trend this early in the year when experts predicted that would be the end of year rate? Large deficits brought on by the tax cut bill and the two-year budget and higher yields on 10 year Treasury notes.Additionally, Federal Reserve chairman Jerome Powell testified February 27th before the House Financial Services Committee in Washington and said, “My personal outlook for the economy has strengthened since December,” Be ready for a rate increase when the Fed meets next month and likely three more by December of this year if the economy keeps percolating and creating jobs. My best guess is looking for interest rates to top off at 5% by the end of the year if not even sooner.
Twin Cities Market Snapshot
new listings down -7.8%
pending sales down -4.2%
closed sale down -4.4%
days on the market until sale was 69, down -13.8%
inventory of homes for sale down -27.8%
month’s supply of inventory down -27.8%
median sale price up 9.6% to $243,750
percent of original list price received up 1.0%
When we look at the 12 month rolling data from February 2017 through January 2018, we see that even though inventories of homes continued to shrink month after month, sales still increased.
pending sales down -0.1%
overall median sales price up 6.9%
price range with the strongest sales was the $1,000,001 price range, up 25.9%
the property type with the strongest sales was townhomes up 5.3%
new construction outperformed previously owned properties up 16.9%
the quickest selling price range was 150,001 to $250,000 at 41 days
New Construction
The new home market made some solid gains over 2017. Though January is getting the year off to a slower start, it’s too early to read it as a trend for the entire year. Last month the 13 county metro issued 424 building permits for new housing. The breakout of that figure is 402 for single-family homes, down 6%, and 517 multifamily units down 22% from January last year.
Search for new homes here.
Where are the new homes being built? Woodbury issued 37 permits, Lakeville 32 permits, Lake Elmo 19 permits, Victoria 19 permits, Plymouth 18 permits, and Prior Lake 18 permits. If you want to get into the weeds on new construction in the Twin Cities metro a good source is this article from Finance & Commerce.
The Story in the January Numbers for Twin Cities Housing
The big questions buyers and sellers are asking about housing is will the market remain strong in 2018 and will home values continue their upward climb? The simple answer is yes to both but not as robustly as last year. There’s a great deal going on right now in financial markets and government that affect housing. The moving parts include interest rates, the stock market, inflation, the deficit, the new tax laws, job creation and wages.
While consumer confidence in the economy is still positive, there are concerns. We have witnessed volatility in the stock market and as the government borrows more with deficit spending, treasury notes and bonds will continue to look very appealing to investors. Adding more money via tax cuts to an economy that is already considered to be at or close to full employment is bound to result in inflation. Both of these will cause interest rates to rise as the Fed has already indicated and we have already seen happen as we begin the year.
That leads me to believe the slowdown in sales is certainly a reflection of less and fewer homes available to purchase. Also, higher interest rates are sidelining buyers who may no longer be able to purchase the type of home they want and are regrouping. Also, many buyers have dealt with the insufficient inventory levels for months in their pursuit of a home purchase and they may now be more cautious and discriminate about what they will and will not buy.
My prediction - expect inventory to remain constrained, expect interest rates to continue to rise, and expect housing values to rise as well but not as fast or as high percentge wise as last year.
My advice – if you are planning to buy or sell a home this year do it sooner rather than later if at all possible. It’s not going to get easier moving into the latter half of the year.
The data used in this report was for the entire Twin Cities Metro. Stats for the individual cities within the region may tell a different story. If you are interested in looking deeper the reports are available to the public on the Minneapolis Association of Realtors website.
You might also enjoy:
2017 Favorites From Our Twin Cities Home Blog
Is 2018 The Year of the Home?
New Construction vs. Existing Home - The Pros and Cons
2018-02-27T21:38:00-07:002024-02-26T10:40:16-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3563The Twin Cities Housing Market December 2017 ReviewDecember Housing Inventory Took a Nosedive as Home Values Soared
The relentless story of happy sellers and frustrated buyers continues. This was especially true in December. Inventory levels plummeted 27.5% over last December and month’s supply dipped to 31.6%. With the ever-shrinking availability of homes to purchase under $500K, the dream of homeownership remains elusive for many first time buyers.
Although mortgage interest rates remained steady at about 4% in the last half of the year, the high demand coupled with low inventory situation caused median sales prices to rise higher. This forced some buyers to adjust their expectations of how much house they could afford.
While year-end market conditions were a nemesis for buyers, sellers had a lot of reasons to celebrate. Homes spent less time on the market with full price offers the norm. Bidding wars on very desirable homes brought in offers above ask price.
What was up and what was down in December this year vs. last year? Inventory, sales and days on market decreased with the median sale price increasing 10%.
Market-wide Inventory and Sales Statistics
new listings down -4.9%
pending sales down -2.0%
closed sale down -3.2%
days on the market until sale was 61, down -15.3%
inventory of homes for sale down -27.5%
month’s supply of inventory down -31.6%
median sale price up 10.0% to $248,500
percent of original list price received up 1.1%
When we look at the data from January 2016 through December 2016, we see that even though inventories of homes continued to shrink month after month, sales still increased.
new listings down -2.2%
pending sales up 5.0%
closed sales up 0.2%
overall median sales price up 7.0%
price range with the largest gain was the $1,000,001 price range, up 30.6%
the townhouse segment showed highest price gains up 7.8%
the quickest selling price range was 190,001 to $250,000
December – A Boom Month for New Construction
In December for the Twin Cities metro, we saw an increase of 36% more building permits pulled over the same time last year. According to Housing First Minnesota, 6113 permits were pulled for the entire of 2017 which will translate to 13,346 new homes.
Compared to 2016, that is a 14% increase in permits and a 36% increase in new homes. This is the most activity we have seen in new construction in the Minneapolis-St. Paul greater metro since 2005. In a Star Tribune article Bob Michels, a Twin Cities builder and president of Housing First Minnesota was quoted, “Everyone was flat-out busy. It felt like the good old days.”
While these numbers are certainly encouraging, we are still seeing most of the new construction falling in the pricing tiers above $350,000 which doesn’t alleviate the pressure on inventory for the majority of first-time buyers. The median sales price for a newly built home in December was $394,900 compared to $239,900 for previously constructed homes you can see if we have a way to go before new homes can stabilize the shortage at the lower price ranges.
The Moving Parts We're Watching
As we continue in the new year, we will certainly be watching all the factors that will affect housing and keep you posted in our monthly reviews. Here are some of the things we will be tracking.
Although we can still expect this to be a seller’s market, buyers that have been indecisive about selling may see this as the absolute best year to move forward, sell their home and buy another.
It doesn’t look like the new tax laws will have a negative effect on our markets although it is still too early to tell how they will respond until we head further into the new year.
We will be paying close attention to moves at The Federal Reserve in regards to interest rates and the sale of mortgage-backed securities. Also, Janet Yellen will be replaced by Jerome Powell on February 3rd. He is expected to continue with the same basic policies. We'll keep you posted.
As we close the door on another outstanding year for real estate in the Twin Cities I look ahead to 2018 with great optimism. Perhaps you feel the same and plan to sell or buy a home. If so, now is the perfect time to start that journey. If you have any questions, call or text. It’s what I’m here for!
*Market data source Minneapolis Area Association of Realtors.
The data used in this report was for the entire Twin Cities Metro. Stats for the individual cities within the region may tell a different story. If you are interested in looking deeper the reports are available to the public on the Minneapolis Association of Realtors website.
2018-01-27T15:52:00-07:002024-02-26T10:42:45-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3522November in the Twin Cities Cold While Housing Market HotNovember Twin Cities Hot Housing Market
The end of the year fast approaches and we are almost there. The theme of the story for 2017 has been one of a strong sellers’ market and relentless buyer demand, especially in the first-time home-buyers price range. It has remained constant through 11 months despite rising interest rates, political turbulence, and a tax overhaul whose effects on the housing market are still uncertain.
Even though the 30-year mortgage interest rate just surged to a five-month high for the last week of December at 3.99%, it is still lower than last year at the same time and a historic bargain. The Minneapolis-St. Paul's business community continues to thrive economically and with the third-lowest unemployment rate in the nation, an abundance of jobs consumer confidence remains high and continues to support a strong housing market.
Delving deeper into the numbers for November of this year vs. November 2016, find new listings 6.7% lower, inventories 24.1% lower with a month's supply of inventory at 1.8. Still, buyers persisted and closed on 4595 homes this year for an increase of 3.8%, and pending sales, not to be outdone are up 4% more than November 2016. Listed homes spent less time on the market and closed for higher prices as well sitting at 56 days with a median sale price that rose by 6.5% to $245,000.
Minneapolis-St. Paul Housing Market Year to Date
Since the end of the year is staring us in the face we would be remiss not to look at the year-to-date figures as well. These numbers should hold pretty steady as we close the books in 2017. When we look at the data winners and losers, inventory levels keep losing ground, and homes for sale spend less time on the market while the other market statistics continue to rack up gains.
- new listings dipped 2.1%<br />- days on market fell 13.6%<br />- closed sales rose 0.3%<br />- pending sales inched up 0.2%<br />- median sales price jumped up 6.5% to $245,000
Let’s Take a Look at the Twin Cities New Construction Picture
One of the reasons the inventory of homes for sale has been in such short supply is new construction has not been able to keep up. However, the good year-end news from the Builders Association of the Twin Cities (BATC) new construction for 2017 is at a 10 year high and we are looking at much more positive numbers coming out of November than last month. November single-family building permits surged to 586, a 30% increase over last year while multi-family permitted units increased a whopping 102%!
In the November Keystone Report for First Housing Minnesota, 611 permits were granted for the new construction of 1892 units overall. While these numbers are certainly encouraging, we still will face a housing shortage at the entry-level price range heading into the coming year. We are missing an important piece of the housing market puzzle. David Siegel, executive director of First Housing Minnesota summed it up when he said, “A decade ago, 72 percent of the homes built in the Twin Cities were below $325,000. Today it is 38 percent. Much of this can be attributed to high land costs and regulatory pressures.”
Twin Cities Metro Housing Market Snapshot
new listings down -6.7%
inventory of homes for sale down -24.1%
the month's supply of inventory is currently at 1.8
median sales price up +6.5%
new construction inventory up +30%
A quick look at what’s up and what's down for the week ending December 16th
New Listings up 9% at 641
Pending Sales down -1.3% at 752
Inventory down -23.9% at 8,499
The Moving Parts We're Watching
We are closing out the books soon on another year of relentless demand for housing with shortages of supply creating a market that favors sellers in a very big way below the $500,000 price point. As we head into the new year we still expect a seller’s market to still be the predominant theme but we will keep an eye on a couple of circumstances that are destined to have an effect on certain segments of the housing market.
The Federal Reserve
Increases to the prime lending rate with the intention of heading off inflation.
United States Treasury debt and mortgage-backed securities being sold to the tune of 4.2 trillion
Leadership change from Janet Yellen to Jerome Powell on 2/3/2018The mortgage interest deduction was capped at $750,00.
The Republican Tax Overhaul
Mortgage interest deduction capped at $750,000
The property and state income tax deduction capped at $10,000.
The elimination of the home equity loan deduction
That’s the November Twin Cities Housing Market story. More to come on 2018 predictions for housing and the end of year wrap-up. Looking at the start of the year, I’m expecting it to open strong so if you are thinking of buying or selling a home, this winter may be a perfect time. If you have any questions, call or text. That’s what I’m here for.
*Market data source Minneapolis Area Association of Realtors.
The data used in this report was for the entire Twin Cities Metro. Stats for the individual cities within the region may tell a different story. 2017-12-28T16:46:00-07:002024-02-22T14:48:47-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3486October Twin Cities Housing Market ReviewOctober Twin Cities Housing Market
As we approach the end of the year, it appears that the Twin Cities housing market story for 2017 is pretty much repeating the theme of strong and persistent demand for housing with an ever-shrinking supply of homes to buy below $500,000. We shouldn’t be surprised at the continuation of this trend when we look at interest rates and our local economy.
The 30-year mortgage interest rate dipped from 4.3% to 3.9%, an amazing bargain when you consider the long-term average rate is 8%. While nationally the unemployment rate is 4.1, in our own Minneapolis-St. Paul Metro it is 2.9, the third lowest metro unemployment rate in the country. Our thriving economy is diverse and vibrant, our workforce talented, our schools first-rate and with a robust arts community and 4-season recreation options makes our quality of life second to none. It’s no wonder we have one of the highest homeownership scores in the nation.
As we take a closer look at the statistics for October this year versus last year, we find new listings increased 3.1% although inventory of homes available fell a whopping 18%. This puts the month's supply of inventory at 2.2 which is 18.5% lower than last year. An undeterred 4994 buyers closed on a home last month, up 0.3% and pending sales were also up 3.9% from same time last year. Homes sold faster for more money, selling on an average of 52 days compared to 61 while the median sale price rose by 6.1% to $244,000.
Minneapolis-St. Paul Housing Market Year to Date
With the end of the year looming we would be remiss not to look at the numbers over the last twelve months. These stats will pretty much hold true as we enter 2017 into historical data. Year to date<a href="http://maar.stats.10kresearch.com/docs/mmi/x/report?src=page" target="_blank" style="font-family: sans-serif; font-size: medium;"> </a>new listings dipped 1.9% and closed sales fell by 0.2% so we can see that although the squeeze on inventory levels are beginning to affect sales, it is not by a large percentage. Although pending sales are up 0.1%, it is important to note here that when we look at those numbers broken out by price range, we see the pending sales declined overall in homes valued at $190,000 and below, while those priced above $190,000 saw pending sales increase significantly as the home price got higher. We will talk about this again later. We also see that median home prices continue to gain traction as they rose 6.5% to $246,000 at the same time they spent 13.8% less time on the market.
Let’s Take a Look at the Twin Cities New Construction Picture
With extremely short supplies of inventory at the lower price categories especially, we need to look to new construction to fill the gap. To date, it has not been even close to meeting demand, especially for starter homes with most new construction happening in the higher priced single family home category. However, things are looking up for new homes. According to BATC, Twin Cities new construction for 2017 is at a 10 year high. In the October report put out by the Keystone Report for First Housing Minnesota, 474 (1,117 permitted units) permits for new construction were issued for the Twin Cities metro area compared to 464 (864 permitted units) in October of last year. When we look at the year to date comparison of this year to last we find that this year new permit activity increased by 15% with 5,110 permits issued compared to 4,443 in 2016. So although we are making progress, most area homebuilders cite a labor shortage as the most serious obstacle to new construction in the metro.
When we look closer at the statistics for new construction comparing October this year to last, we see new listings increase by 5.4% and pending sales were up by 20.8%. With the median sale price up 1.3% at $392, 790. The inventory of new homes rose 5.4% with the month’s supply falling by 12.3% to 5.7 months. Although this indicates a balanced market, values of new homes continue to rise even though days on the market increased by almost 39%. Given the increase in pending sales and median sale price, new homes are being scooped up quickly by eager buyers.
Twin Cities Metro Housing Market Snapshot
new listings up +3.1%
inventory of homes for sale down -18%
the month's supply of inventory currently at 2.2
median sales price up +6.1%
new construction inventory up +5.4%
Quick look at what’s up and what’ down for week ending November 11th
New Listings down -7.6% to 924
Pending Sales up -7.1% to 976
Inventory down 18.5% t0 10, 871
What to Watch
As we move closer to closing out another year of unprecedented demand, we should keep an eye on a couple of upcoming events of extreme importance to housing.
The Federal Reserve – 3 things
The December 12th meeting and a possible, long promised interest rate hike.
The reduction of the $4.2 trillion in United States Treasury debt and mortgage-backed securities
The change in leadership of the Federal Reserve on February 3, 2018. Jerome Powell has been appointed new chairman so it is yet to be determined how that might affect policy decisions going forward.
The Republican Tax Bill - 2 things
The mortgage interest deduction, if capped at $500,000 will have a negative impact on the housing market especially on both the east and west coasts where property values are higher and in Metro areas like our own Twin Cities.
The property tax deduction. If that is eliminated, it will make home ownership more difficult for many existing and potential middle-class homeowners, and especially harm affordability for first-time buyers trying to grab their piece of the American dream.
So that is what we have for now. We are watching all the ups, downs and eccentricities of the market to be ready and able to answer any questions you might want to ask. If you are a buyer remember you can still score a good deal out there and secure an interest rate as low as 3.875%. If you are a homeowner that needs or wants to sell now remember the real estate market is open 12 months of the year and there are qualified eager buyers out there. Sometimes there is no better time than the present.2017-11-20T17:17:00-07:002024-02-22T14:53:01-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3412August Twin Cities Housing Market Episode – Another Rerun! August Twin Cities Housing Market Episode – Another Rerun!
Most of us want to see a new episode of The Twin Cities Housing Saga but I am afraid August is another rerun. Over the course of the last 3 years the dominant theme of the housing story in Minneapolis-St. Paul is an ever-shrinking inventory and rising prices. Sellers have been in their glory days while buyers, facing a highly competitive marketplace, have struggled to close a deal month after month with a couple of variations. We’ll talk about these later in this post. Like most of the country, here in the Twin Cities metro inventories continue to shrink while prices continue to move upward. As long as the economy continues to grow and add jobs and interest rates remain low there is no reason to believe this market situation is going to change course anytime soon.
A deeper dive into the numbers for August of this year versus last year reveals new listings increased 7% while the inventory of homes available for sale fell 16.7% from 15,137 in 2016 to 12,206 this year. The month's supply of inventory remained at 2.5. but compared to last year, it dropped 16.7%. Lucky buyers in the metro successfully purchased 6513 homes but they were not quite as fortunate as buyers in August of last year when 6,606 home sales closed. Additionally, this year buyers paid 6.8% more when you compare median sales prices in the Twin Cities last August.
A Closer Look at Supply in the Minneapolis-St. Paul Housing Market
Remember at the beginning of this post I said buyers have struggled with this market that has sellers doing happy dances with a couple of variations? Here they are. When we break out the numbers on the inventory of homes for sale by market price segments, the two top tiers tell a different story. At the $500,001 to $1,000,000 price range, we see a 6 months inventory of homes which indicates a market that is balanced between buyers and sellers. When we view the supply of homes at $1,000,001 and above the market strongly favors buyers with inventory levels just over a year.
So what does this change in market balance mean to you as a buyer or a seller or both? It means if you own a home that is in one of the price brackets between these top two and are looking to trade up, you will sell in a market that is favorable to you as the seller, and then purchase a new home in a market that is favorable to you as a buyer. The best of both worlds. Not to mention you can take advantage of interest rates that are still historically low before they go up any higher.
While the number of building permits has increased and new construction is on the rise, it will take some time to release any pressure on the demand at the lower price brackets. For anyone buying below $200,000, you can see by the chart that the market is extremely competitive. Unfortunately, another factor is that we need new housing at the traditional first-time buyer level, and that is not what is being built these days in the Twin Cities. August new construction inventory was up 2% over same time last year, not anywhere near where we need it to be to help balance the housing market.
Looking at the last 12 months from September 2016 to August 2017, pending sales were up 3%, with the largest gain in sales in the $1,000,001 and above segment, which increased 26.3%. Overall, the median sale price saw an increase of 5.5$ at $240,000. The price segment that sold the quickest, 44 days, was the $190,001 to $250,000. The condo market saw the largest price gains, increasing 6.4% to $157,000.
Twin Cities Metro Housing Quick Stats
With inventory levels at all-time lows, this market continues to be extremely competitive for buyers, especially first-timers hoping to buy a home below $250,000
The top two market price groups are a deviate from this scenario with a balanced market at the $500,001 to $1,000,000 price range and a market that favors the buyer at $1,000,001 and above
Home values are expected to continue the upward trend
Inventory levels are expected to continue their downward trend
Twin Cities Metro Inventory Snapshot
new listings up 0.7%
inventory of homes for sale down -16.7%
month's supply of inventory down -16.7%
months supply of inventory currently at 2.5
new construction inventory up 21%
Want a hint about how September stats are going to shake out? Same old story different month would be my best guess!
new Listings down -5.7% to 1,618
pending Sales down -7.1% at 1,244
inventory down 16.5%
As we move into the second best time to list your home, fall, keep in mind that interest rates are still at historical lows at 4% for buyers with strong credit. However, most financial analysts agree that the Fed will be raising interest rates at least one more time before the year ends, most likely in December. Also keep in mind that the Fed has begun to engage in an unprecedented bond sale, which already pushed mortgage interest rates up this month even though the Fed didn’t raise the rate when they met in September. If you are still on the fence about listing your home for sale, perhaps now is the time. As a buyer who didn’t secure a deal this summer don’t wait until spring. Now is a great time to still take advantage of low-interest rates keeping in mind that there are good properties out there.
The data used in this report was for the entire Twin Cities Metro. Stats for the individual cities within the region may tell a different story.
*Market data source Minneapolis Area Association of Realtors. 2017-09-25T17:13:00-07:002024-02-22T14:58:52-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3397Twin Cities Housing Market Twin Cities Housing Market
The Twin Cities housing market story for July in Minneapolis-St. Paul is much the same as it has been month over month for a couple of years. For sellers, it’s celebration and uncorking the champagne bottle and for buyers, it is a test of fortitude and commitment to home ownership. The Twin Cities is following a national trend of the past two years where inventory continues to shrink and median sale price continues to increase. How long this market is sustainable, is anyone’s guess but with unemployment holding at 4.3 percent the demand to purchase a home remains high.
A look at the numbers for July has available homes for sale at 12,407 which is a drop of 18.3% from July of 2016. The month's supply of inventory sits at 2.5 compared to 3.1 last year same time, a 19.4% decline. Buyers in the Twin Cities closed on 6,020 homes, 2.6% less than July 2016 at 6,128. Declining inventory, pending sales, closed sales and days on market was half the story, the other half being an increase in median sale price, of $254,000 up 5.9% over last year, the percentage of list price received at 99.2 representing a gain of 0.8% over July of last year.
Maybe you remember the old children’s game of musical chairs that was once popular at birthday parties. When the music stopped, the small humans who were left without a seat were out of the game. This is the current market situation. There is simply not enough homes for all the buyers who want a seat at the ownership table. The quest to buy a home at the lower price levels is a serious challenge and the once rare multiple offers situation has become the norm for desirable properties. Moreover, it is not unusual to have those same properties stay on the market no longer than a day!
While new construction is on the rise, it will take some time before new homes make a significant difference in market supply catching up with demand. It simply will not happen overnight. Looking at a 12 month rolling total of new construction sales in July, it was up 21.1% over last year which also represented the strongest status in the market. The price range of $190.001 to $250,000 had the strongest sales with a 3.5% increase, while townhomes were the market segment with strongest sales up 7.5%.
Twin Cities Metro Housing Statistics
Extraordinary strong buyer demand vs. limited supply of homes continues to dominate this market story
Home values are still climbing and this is not expected to change in the foreseeable future
Townhomes, with a 6.1% increase for a median sales price of $184,700 saw the largest price gains
Quickest selling price range $190,001 to $250,000 at 44 days on the market
Slowest selling price range $1,000,001 and above at 197 days on market until sale
Largest increase in sales in the $1,000,001 and above segment with an increase of 25.1%
Twin Cities Real Estate Inventory
new listings down -3.9 %
inventory of homes for sale down -16.5%
the month's supply of inventory down -18.3%
the month's supply of inventory currently at 2.5
new construction inventory up 3.9% (12 months rolling average)
As we close the summer, keep in mind that interest rates are still at historical lows under 4% for buyers with strong credit. However, most financial experts agree that the Fed will be raising interest rates at least one more time before the year ends. The next Fed meeting is in mid-September, with two additional meetings scheduled before year’s end. Also keep in mind that the expectation is that the Fed is going to engage in an unprecedented bond sale, and it is uncertain how that will affect mortgage interest rates, up or down.
The data used in this report was for the entire Twin Cities Metro. Stats for the individual cities within the region may tell a different story.
*Market data source Minneapolis Area Association of Realtors.2017-08-31T18:38:00-07:002024-02-22T15:00:32-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3375June Housing Market in the Twin Cities Setting New Record HighsJune Housing - Different Month, Same Story
The Minneapolis-St. Paul Housing Market story for June continues with a theme that we know well. Even though available homes for sale fell 16.5% compared to June 2016, closed sales rose 2.2%, reaching a record high of 7,430 units sold. Home prices also continue their upward trend with the median sales price also reaching a new high of $259,000, 7% over same time last year.
The only factor keeping this market from breaking out is the low inventory levels. Short supply has kept some wanna-be buyers sitting on the sidelines and those actively engaged in the hunt and search for a home are being seriously challenged by the amount of competition for properties. Multiple offers for desirable properties are the norm with days on market at 47 down 16.1%. Percentage of list price received is 99.5 over 98.7 last June, an increase of 0.8%.
Twin Cities Metro Housing Quick Stats
Exceptional demand and restrained inventory levels continue to dominate the market
The shortage of available homes puts more upward pressure on home values
Condos, with a 6.2% increase for a median sales price of $155,000 saw the largest price gains
Quickest selling price range $190,001 to $250,000 at 45 days on the market
Slowest selling price range $1,000,001 and above at 192 days on market until sale
Largest increase in values in the $1,000,001 and above segment with sales increasing to 25.9%
On the national housing scene, there has been a general slowdown in sales and many industry analysts worry that a serious housing shortage is just up the road. However, homebuilder confidence in the market is on the rise. New construction in the Twin Cities is the status with the strongest sales and housing starts are expected to rise in the coming month. For June the inventory of new homes is up 8.6% over same time last year.
Twin Cities Metro Inventory Snapshot
New listings down -0.5 %
Inventory of homes for sale down -16.5%
The month's supply of inventory down -16.7%
The month's supply of inventory currently at 2.5
New construction inventory up 8.6%
New construction inventory at 5.5 months down 9.8%
As we move toward the end of summer, those of you who are being shy about getting into the market, be aware that strong job growth, consumer confidence, and low-interest rates are going to push more and more aspiring home owners to start actively pursuing their dream of ownership. It seems certain that the Fed will be raising interest rates at least one more time this year and with demand as strong as it is home prices will not be coming down.
Sellers who are on the fence should be aware that owners of homes that present well and are priced according to market are receiving multiple offers in record time. On the flip side, these sellers are facing a less competitive move up market and doing really well. If you are still sitting on the fence, this would definitely be a good time to make your move, especially as we head into fall which is the second best time of the year to sell your home.
The data used in this report was for the entire Twin Cities Metro. Stats for the individual cities within the region may tell a different story. If you are interested in looking deeper the reports are available to the public from the Minneapolis Association of Realtors website. 2017-08-03T17:59:00-07:002024-02-22T15:03:24-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3355Twin Cities May Housing Market Review May Housing For the Twin Cities In Two Words – Extremely Competitive
The story for May housing in the Twin Cities is one we have told over and over for months. With the supply of inventory 17.3% lower than last year, it’s about a tale of heavy buyer demand and intense competition to secure a deal on a home. This extraordinary sales activity in the face of an extremely challenging playing field for buyers is continuing to fuel this market causing home values to rise and properties to close in record time. In addition, with the average sale price at 99.5% of ask, that means approximately 50% of homes are getting sold for list price or above.
As is characteristic of any market where supply falls short of demand, home prices are rising. The median sales price for May was $250,000 up 5.5% over same time last year with the average sale price up 6.3% at $294,243. Strongest sales were in the below $250,000 category, making the market most especially difficult for first-time home buyers. The market segment with the strongest sales was townhomes.
New listings for in the Twin Cities for May were up slightly by 0.7%, pending sales down 3.1% and inventory levels fell 17.3%. The supply of homes for sale sat at 2.3 months down 20.7% compared to May 2016. The bright spot on the supply side is new construction. Low borrowing rates and strong demand for housing is inspiring builders and inventory of new construction was up 9.1% for the month of May.
Twin Cities Metro Housing Quick Stats
Given extraordinary demand and limited inventory, home prices continue to rise
Diminished inventory resulted in lower closed and pending sales
Condos had the largest price gains with a 6.9% increase for a median sales price of $155,000.
Fastest selling price range $190,001 to $250,000 at 46 days on the market
Slowest selling price range $1,000,001 and above at 196 days on market until sale
Price range with the largest gains was the $1,000,001 and above segment with sales increasing to 21.5%
Twin Cities Metro Inventory Snapshot
new listings up 0.7 %
inventory of homes for sale down -17.3%
the month's supply of inventory down -20.7%
the month's supply of inventory currently at 2.3
new construction inventory up 9.1%
new construction inventory at 5.6 months down 9.7%
As we move into summer, first-time buyers are learning that they will have to spend more of their monthly income to buy a home. Higher prices are causing some to slow down and give more thought to the process. On the seller side, the highly competitive market situation is inspiring many to stay put rather than try to buy a move-up home in the current competitive situation which will only serve to heighten the tight inventory situation. Ouch!
Here is a snapshot of the week ending June 10
New Listings up 2.3%
Pending Sales down at 1,442
Inventory down 16.1% to 12,107
Please keep in min that the data used in this report was for the entire Twin Cities Metro. Stats for the individual cities within the region may tell a different story. If you are interested in looking deeper the reports are available to the public from the Minneapolis Association of Realtors website. <br />
2017-06-19T18:37:00-07:002024-02-22T16:26:03-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3322April Showers and the Twin Cities Housing Market The Twin Cities Spring Housing Market April Review
Market snapshot: Spring in Minneapolis-St. Paul and the theme of the housing market story is home buyers as plentiful as mushrooms after a spring shower and “home for sale” signs as rare as dinosaur fossils. Okay, I admit I am exaggerating slightly about the for sale signs but for many buyers, especially in the lower price ranges, it sure feels that way.
Listing Activity
New Listings in the Twin Cities were down 8.3 percent compared to April of last year causing inventory levels to fall 19.8 percent with 10,916 homes available in all categories. Values continue to gain momentum with medium sale prices steadily inching upward with days on the market going in the other direction. The month's supply of homes was down 21.4 percent at 2.2 months and needless to say, sellers were quite happy. The short supply of inventory has caused closed and pending sales to be down from last April’s numbers.
Even though most decent properties that are priced to market are selling above list, quickly and with multiple offers, so far buyer demand remains incredibly strong. Even though many first timers have lost out on several properties they hang in there. In the Minneapolis-St. Paul metro, this demand is reflective of a strong labor market, interest rates still at historical lows, rising wages, and rising rents making home ownership very appealing. As we forge ahead into the summer months, don’t expect this situation to change unless something unforeseen occurs to change the market dynamics.
Let’s dive a little deeper into the numbers for Twin Cities housing April 2017 in comparison to the same time last year.
Quick Twin Cities Housing Market Stats
With demand surging and inventory shrinking, home prices continue to rise
Shrinking inventory levels resulted in a drop in both closed and pending sales
Largest price gains in the single-family segment where the median sales price increased to $255,000 up 6.3%
Fastest selling price range $190,001 to $250,000 at 47 days on market until sale
Slowest selling price range $1,000,001 and above at 192 days on market until sale
Price range with the largest gains was the $500,000 to $1,000,000 segment with sales increasing to 16.9%
Twin Cities Home Inventory Stats at a Glance
new listings down 8.3 %
inventory of homes for sale down -19.8%
the month's supply of inventory down -21.4%
the month's supply of inventory currently at 2.2
new construction inventory up 7.1%
new construction inventory at 5.7 months down 13.6%
As we move into summer, buyers are severely challenged in the lower price ranges and sellers are gleeful. For the moment it doesn’t look like that will change going into the summer unless something unforeseen happens like perhaps a significant jump in interest rates or negative economic news. So if you want to buy a home in the Twin Cities dust off your patience and perseverance. If you are thinking about selling there is no better time than the present so consider doing it now. Keep in mind, the market is cyclical and this situation that is perfect for sellers will not last forever.
*Market data source Minneapolis Area Association of Realtors.
2017-05-17T13:23:00-07:002024-02-22T16:34:50-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3296Twin Cities March Housing Market ReviewNew Month - Same Story for Twin Cities Housing
Market snapshot: What’s up? Sales, home values, ask price, the percentage of list price received, new listings and closed sales. What’s down? Pending sales, days on market, available homes for sale, and month’s supply of inventory. I’m starting to feel like the proverbial broken record but I’m just telling the story not creating it. With the inventory of available housing at a record 14 year low, this market continues to be an extremely challenging one for buyers, especially in the lower price ranges.
Spring is the strongest season for real estate and based on the figures we have in for March it is going to be a great one for sellers as buyers continue to face a landscape of low inventory of homes for sale with transactions completed in less time for a greater percentage of asking price received. Buyers will find it necessary to move quickly with their best offer if they want a chance at closing a deal. So far buyers have proven they are willing to do just that and although interest rates bobbed up along with prices, they have persisted.
As we barrel ahead through the spring don’t expect the situation to change much provided that the economy keeps on chugging along like the little engine that could. As long as consumers continue to have confidence in the economy and job growth continues to hold steady or improve minor increases in interest rates shouldn’t be more than a blip on the screen of demand for homes.
Twin Cities New Construction
One factor that has a strong effect on supply is newly constructed homes available for sale. The good news on this front is that Twin Cities builders are picking up the pace on new homes. March construction permits in the metro were up 30% over last year while units are up 50%. Both single family units were up 27% while multifamily units were up 88%. If you are looking for an opportunity to buy a new home, Lakeville pulled 53 permits. Plymouth 39, Woodbury 24, Blaine 20 and Apple Valley pulled 19 permits.
Although the news on new homes is encouraging, where the demand is highest in the lower entry level segment, builders are still struggling. BATC Executive Director David Seigel said, “While there is an increasing demand for housing inventory, our builders are facing serious roadblocks trying to construct more entry-level homes. We are working with the MN REALTORS this year at the Capitol to support a package of common-sense legislative proposals that aim to protect the dream of homeownership for all by creating opportunities for first-time homebuyers and addressing the cost-drivers that are negatively impacting housing affordability.”
Let’s take a deeper dive into the month of March 2017 real estate market stats for existing homes in comparison to the same time last year. *
Quick Twin Cities Market Stats
Desirable, market priced properties are often receiving multiple offers at or above list price
Despite lower inventory levels, sales still outpaced last year
Largest price gains in single-family segment where the median sales price increased to $254,99 up 6.3%
Fastest selling price range $190,001 to $250,000 at 48 days on market until sale
Slowest selling price range $1,000,001 and above at 185 days on market until sale
Price range with the largest gains was the $500,000 to $1,000,000 segment with sales increasing to 17.6%
Inventory Stats at a Glance
new listings up 1.3 %
inventory of homes for sale down -19.9%
the month's supply of inventory down -23.1%
the month's supply of inventory currently at 2
new construction permits up 30%
new construction units up 50%
*Market data source Minneapolis Area Association of Realtors.
** Market data source Builders Association of the Twin Cities2017-04-25T14:38:00-07:002024-02-22T16:41:03-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3110Twin Cities February Housing Market - A Look at the NumbersTwin Cities Home Sellers Doing the Happy Dance
Market snapshot: This is a very difficult market for buyers, especially in the lower price tiers as the theme of low inventory coupled with high demand endures. As inventory levels continue to shrink, it is becoming really tough to buy a home, especially for first-time buyers and downsizing boomers. Nevertheless, they persist.
So far, buyers, even faced with the shortage of available homes, rising prices and increased mortgage interest rates have not been deterred. Heading into spring, which is the strongest real estate season of the year, begs the question of how much inventory will we see in the market and will the increased cost of buying a home temper buyer demand. As long as job numbers and economic factors remain strong, buyer confidence should remain high and continue to fuel the demand for housing.
For the week ending March 11th and 18th, we see a decline in inventory and a decline in pending sales. This may be a signal that buyers are dropping out of the market but based on those 2 weeks statistics it is too early to say. We are seeing a decline in the gap of new listings compared to last year as the month progresses so it may just be indicative of a more traditional onset of the spring market whereas last year it was acting like spring even though we were still slogging through the snow.
Let’s take a deeper dive in the month of February 2017 real estate market stats in comparison to the same time last year. *
Quick Stats
Buyer activity outpacing last year
Seller activity declines
Multiple offers on desirable properties have become the norm
Sellers are receiving full price and above offers in record time
Sales are up despite lower inventory levels
$350,001 to $500,000 category of housing shows strongest sales up 19.6%
Fastest selling price range $190,001 to $250,000 at 49 days on market until sale
Slowest selling price range $1,000,001 and above at 183 days on market until sale
Market-wide Inventory and Sales Statistics
new listings down 7.5%
inventory of homes for sale down -25.3%
the month's supply of inventory down -28%
median sale price up 7.6% to $223,000
percent of original list price received up 1.4%
pending sales up 0.5%
days on the market until sale was 82, down -14.6%
*Market data source Minneapolis Area Association of Realtors.
2017-03-27T12:42:00-07:002024-02-22T16:42:32-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3087Twin Cities Housing Market Stats January 2017 Brand New Year and Same Old Story
January may be the first month of a new year but for the Twin Cities Housing Market the story is old and has been told over and over again, not enough homes for sale to satisfy buyer demand. How much this will change depends on seller listing activity, interest rates, and rising home prices.
What was up over the same time last year? Pending sales, percent of original list price received, median list and sale price with new listings up slightly by 3.1 percent. What was down? Days on the market before sale was down by 7.1 % at 79 days. The really big change was the inventory of homes for sale, which was 25.4% lower than last year resulting in 1.6 months to sell out the supply of homes. That figure was down a whopping 30.4% over January 2016.
Twin Cities Market Outlook Short Term
This situation of incredibly low supply is causing a great deal of frustration for those eager to purchase a home, especially in the first time buyer category. It is the norm for desirable properties having accepted offers in less than a week of hitting the market with sellers enjoying multiple offer situations. Good news for them and not so good news for buyers.
Employment is strong and steady and even with decreasing rents for the beginning of the year, it remains more costly in many cases to rent as opposed to buying a home. According to Rent Jungle, as of January this year, the average apartment rent is $1615 per month in Minneapolis with one bedroom averaging $1376 and 2 bedrooms $1895 per month. With home mortgage rates bouncing around from 4.125 to 4.250 percent for buyers with excellent credit purchasing a home makes good financial sense.
Let’s Dig Deeper into the Twin Cities January Housing Numbers
The first month of the year is starting out stronger than the preceding one. The trend of last year carries over into the first 30 days of the new one as we see home values rising, homes spending fewer days on the market and inventory continuing to shrink.
We had 2775 closed sales in January, up 3.2 percent with the average selling price of $274,541 up 4.9%. The affordability index fell 5.2 percent with the 10K housing value index up 3.8%. The median sale price is at $225,000 for this month with sellers receiving 95.9% of original ask price. The price range with the largest gain in sales was $350,001 to $500,000, up 18.9%. The quickest selling price range was $190,001 to $250,000 at 49 days with the slowest moving price range being the $1,000,001 and above at 183 days.
On the supply side with inventory levels down 25.4 percent the townhouse market segment lost the least at 24.5 percent. The months supply of inventory was 1.6 overall with townhomes at 1.8 months, single family at 1.2 and condos at 1.6 months.
The market is poised to take off given like a rocket as soon as inventory levels start to rise. That is the one factor right now holding it back. With employment remaining steady, interest rates still historically low and consumer confidence high we should continue to have a good year. Let’s hope the new administration does not have a negative influence on any of these factors and we should experience a good year, at least in the first 6 months.
All market data for the Twin Cities is sourced to the Minneapolis Association of Realtors and is for the Twin Cities of Minneapolis-St. Paul and the outlying suburbs. If you want to see how a particular community compares, all the information is available on their website.
Check out some of our other posts: <a href="https://www.mnpropertygroup.com/blog/category/real-estate-general/" target="_blank">Five Reasons The Minnesota Property Group Team is Extraordinary</a>, <a href="https://www.mnpropertygroup.com/blog/the-2017-twin-cities-real-estate-market-gets-a-thumbs-up/" target="_blank">The 2017 Twin Cities Real Estate Market Gets a Thumbs Up</a>, <a href="https://www.mnpropertygroup.com/blog/condo-townhouse-or-single-family-what-should-you-buy/" target="_blank">Condo, Townhouse or Single Family - What Should You Buy?</a>2017-02-16T22:09:00-07:002024-02-22T18:41:10-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3071Twin Cities Housing Market Stats December 2016 ReviewTwin Cities Housing Market Statistics December 2016
Finally, here we are wrapping up the year for the Twin Cities Housing Market. As stories go this is one we have been retelling throughout 2016. It is a tale of a market dramatically in favor of sellers with more buyers chasing fewer properties as the year progressed.
Prices of homes continued an upward trend over December while days on market from list to close declined. Completed sales were up, pending sales and inventory were both down, and with the end of year months inventory of homes at 1.6, it was a true tale of woe for buyers heading into the new year.
How the Minneapolis-St. Paul Market Looks Short Term
Unemployment continues to be at all-time lows and job creation has remained steady and strong since August 2015. Moving forward, the perspective for the housing market remains unclear and depends a great deal on the new administration and the effects it will have on housing in the coming months. We do know that the quarter point reduction in FHA mortgage insurance was rescinded which will lock out about 40,000 first time home buyers and force those that will still qualify to seek lower priced homes. Mortgage interest rates have risen as well and now appear to be bouncing between 4.125 and 4.250 percent.
Twin Cities Market Snapshot for December 2016 vs December 2015
Strong demand continues to move values higher even with an inventory that continues to be restricted
Job confidence coupled with high rents still win over rising interest rates at least for the start of the new year
Closed sales ended the year strong at +2.6% in spite of inventory at -26.3%
The median sale price was up 4.1% across all categories, with the single family segment showing the most gains at +5.7%
Mortgage interest rates seem to have settled in around 4.125 - 4.25 percent, at least until the next Fed rate adjustment
Fastest selling price range $190,001 to $250,000 with 50 days on market
Slowest selling price range $1,000,001 and above at 186 days on market until sale
December Inventory and Sales Statistics for the Twin Cities
new listings down 8.2%
inventory of homes for sale down -26.3%
the month's supply of inventory down 30.4%
median sale price up 4.1 % to $228,500
closed sales up 2.6%
percent of original list price received up 0.6%
pending sales down 6.5%
days on the market until sale was 71 which was -10.1% less
What To Expect Next
The rise in rates may keep many sellers in their current homes, especially those that refinanced at significantly lower rates over the last couple of years. On the other hand, the specter of higher rates looming will inspire many of the baby boomer market segment to sell and make their investment in a retirement home this year. Market conditions may force many first time buyers to remain in rentals until their incomes rise or they save a larger down payment. But while rates are still historically low, the threat of them increasing as the year progresses will inspire those still eager and able to purchase a home out in strong numbers this winter in the first quarter of the year with the hope of making a deal sooner than later.
2017-01-24T16:11:00-07:002024-02-22T16:22:04-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3051Twin Cities Housing Market November 2016 - Here's the Story<img src="https://assets.site-static.com/userfiles/494/image/Housing_Nov_converted.jpg" width="675" height="587" />
Twin Cities Housing Market Statistics November 2016
Here we are almost at year’s end and wrapping up on the Twin Cities Housing Market that tells one consistent story. It’s about fewer and fewer homes for sale spending a shorter time on the market and selling for higher prices. A market that favors the seller has been the dominant theme throughout this year. A deeper dive into the numbers for November give us a clear picture of the market trend.
Prices of homes continue on an upward trajectory with a 5.8% increase in the median sales price over last year. Closed sales topped out at a 25.2% increase and inventory dropped a whopping 22.8%. Due to volatility in financial markets responding to the results of the presidential election, the long awaited increase in interest rates happened before the expected Fed increase of last week, which boosted the mortgage interest rate in the Twin Cities to 4.25% with the expectation that rates will continue their upward climb in 2017.
While employment numbers and job creation have remained strong since August 2015, the long-term indicators of what effect the new administration will have on the housing market remain someone cloudy. With a raise in rates, we might very likely see a decrease in first time home buyers that will be able to purchase a home, which may result in a more balanced market in the coming year.
<img src="https://assets.site-static.com/userfiles/494/image/HousingMrktNov.jpg" width="625" height="552" />
Quick Twin Cities Housing Stats for November
High demand is moving sales and prices higher despite declines in inventory
A strong labor market, high rents, and low-interest rates continue to fuel increases in the home buying market though today’s rising interest rates may change the trend in the coming new year
Sales total higher compared to same time last year in spite of lower inventories
With inventory of homes for sale down -22.8%, the median sale price was up 5.8 % based solely on high demand
Volatility in financial markets resulting from the presidential election caused interest rates to rise even before the Fed announcement of increase this month
Largest price gains were in the single-family segment with a 5.9 % increase to $250,000
Quickest selling price range $190,001 to $250,000 with 50 days on market until sale
Slowest selling price range $1,000,001 and above at 186 days on market until sale
September Inventory and Sales Statistics for the Twin Cities <img src="https://assets.site-static.com/userfiles/494/image/balance_2.jpg" width="350" height="263" class="img_box_right" style="float: right;" />
new listings down 1.1%
inventory of homes for sale down -22.8%
months supply of inventory down 27.6%
median sale price up 5.8 % to $232,000
percent of original list price received up 0.9%
pending sales up 9%
days on the market until sale was 6, down -16.4%
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2016-12-19T12:09:00-07:002020-03-21T10:38:34-07:00Joe Houghtontag:mnpropertygroup.com,2012-09-20:3004Twin Cities September Housing - Here's The Story <img src="https://assets.site-static.com/userfiles/494/image/Sep2.JPG" width="675" height="587" alt="Sept Housing Statistics 2016 Twin Cities" title="2016 September Housing Market Statistics Twin Cities metro" style="vertical-align: middle;" />
Twin Cities Metro Housing Statistics September 2016
Summer is yesterday and we are immersed in the second best season for real estate, fall. The theme of the story is pretty much the same: Ardent buyers with sellers still playing it coy. Let’s take a look at the numbers for September and see how they shook out here in the Twin Cities metro.
Market snapshot in one sentence: Job and wage growth coupled with rising rents and attractive interest rates are doing more to inspire buyers than rising property values and shorter time on the market seem to be doing to inspire sellers as the market continues to struggle with inadequate inventory.
Let’s take a deeper dive into the month of September 2016 real estate market statistics in comparison to the same time last year. *
<img src="https://assets.site-static.com/userfiles/494/image/Sep3.JPG" width="675" height="377" alt="Sept 2016 Housing Stats Twin Cities" title="How Hot or Cool Was the Sept 2016 Housing Market in Minneapolis-St. Paul?" style="vertical-align: middle;" />
Quick Twin Cities Housing Stats for September
High demand is moving sales and prices higher despite declines in inventory
Rental costs and employment continue to climb making year over year increases in the home buying market likely though not certain through the end of the year
Sales total higher compared to same time last year in spite of lower inventories
With inventory of homes for sale down -16.1%, the median sale price was up 3.6 % based solely on high demand
High demand in the market is being driven by 3 major factors: millennials are reaching prime home buying age, growing families are looking for larger homes and empty nesters are downsizing
Low-interest rate refinancing and short term rentals are factors keeping inventories down
Largest price gains were in the single-family segment with a 6.3 % increase to $249,900
Quickest selling price range $190,001 to $250,000 with 52 days on market until sale
Slowest selling price range $1,000,001 and above at 186 days on market until sale
September Inventory and Sales Statistics for the Twin Cities
new listings up 5.6%<img src="https://assets.site-static.com/userfiles/494/image/Sep4.jpg" width="330" height="220" style="float: right;" alt="Inventory and Sales Stats Twin Cities September 2016" title="Taking a look at sales and inventory for Sept. 2016 in the Twin Cities shows a market that still favors sellers." />
inventory of homes for sale down -16.1%
months supply of inventory down 20.0%
median sale price up 3.6 % to $230,000
percent of original list price received up 0.9%
pending sales down -0.3%
days on the market until sale was 56, down -13.8%
2016-10-24T20:21:00-07:002020-03-21T10:40:21-07:00Joe Houghton