Twin Cities Housing Market Stats December 2016 Review
Twin 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 We do know that the quarter point reduction in FHA mortgage insurance was rescinded which will lock out about 40,000 first time home buyers and force those that will still qualify to seek lower priced homes.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.
And that’s all I have right here and right now. For a more detailed look at real estate as I see it happening for 2017, please check out my earlier post The 2017 Real Estate Market Gets a Thumbs Up.
As always, you know where to find me.