Twin 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: Five Reasons The Minnesota Property Group Team is Extraordinary, The 2017 Twin Cities Real Estate Market Gets a Thumbs Up, Condo, Townhouse or Single Family - What Should You Buy?