2018 Twin Cities Housing Market

Twin Cities Housing Report October 2018

The 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...

Twin Cities Housing Report September 2018

The 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 

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Twin Cities Metro Housing Market Statistics July 2018

Mpls 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.  

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...

Twin Cities Housing Market Review June 2018

June 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%
  • ...

Spring - Prime Time For Home Sales

Spring – The Best Time to Sell Your Home!

It’s officially Spring!  Birds are chirping, flowers blooming, and “Home for Sale” signs as plentiful as dandelions on your lawn after a rain shower. Wait! What? The calendar says Spring but that is apparently fake news since I am looking out the window at 18 inches of snow we were just gifted and shaking my head.The truth is the only Robin I saw was wearing a parka and snow boots. Not a single crocus is shoving a brightly hued head out of the earth. Even the forsythia has yet to bloom. And Home For Sale signs are not so plentiful at all with inventory levels of available homes at an all-time low in the Twin Cities.However, what I have witnessed is an army of serious home buyers out in the marketplace. Yes, a plethora of buyers whose pockets are bulging with pre-approval letters, down payments and closing costs. Isn’t that great? It depends. It’s outstanding if you are a seller. 

The Twin Cities Housing Theme is Short on Supply, Big on Demand

Right now there is an extraordinary imbalance in the Minneapolis-St. Paul real estate market which favors sellers under the $500,000 price point in a big way, and I'm talking really big! New listings in March were down 17.5% compared to last year at this time and inventory of homes down 26.1%. That translates into 1.7 months supply of inventory. So what exactly does that mean? If no new listings enter the market...

February 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...

The Twin Cities Housing Market January 2018 Review

January 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...