2017TwinCitiesHousingMarket

The Twin Cities Housing Market December 2017 Review

December 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...

August 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...

Twin 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...

April 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...

Twin Cities March Housing Market Review

New 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...