Weekly Market Report

For Week Ending April 15, 2017

In light of the low inventory and affordability situation this year, it was a good surprise to see existing home sales hit a national 10-year high. It isn’t a surprise, however, to see multiple offers on a home within a few days of being on the market. Buyer demand is high and will continue to be for the foreseeable future, so it was also welcome news that builder confidence and housing starts were up as well.

In the Twin Cities region, for the week ending April 15:

  • New Listings decreased 17.8% to 1,612
  • Pending Sales decreased 6.7% to 1,374
  • Inventory decreased 20.1% to 10,574

For the month of March:

  • Median Sales Price increased 7.0% to $237,500
  • Days on Market decreased 14.1% to 73
  • Percent of Original List Price Received increased 1.3% to 98.1%
  • Months Supply of Inventory decreased 19.2% to 2.1

All comparisons are to 2016

Click here for the full Weekly Market Activity Report. From The Skinny Blog.

Trading places? Seller activity up; signed purchase agreements down

By David Arbit on Monday, April 17th, 2017

Seller activity rose 1.3 percent compared to March 2016. The number of signed purchase agreements declined 3.0 percent, though the number of closed sales rose 8.3 percent. Housing demand has outpaced supply, thus continuing the trend of falling active listings. In March, inventory levels fell about 20.0 percent compared to 2016 levels. Those shopping for homes have 10,213 properties from which to choose in the metro area. Given that figure stands near a 15-year low and demand has reached an 11-year high, affordably-priced homes that are listed often fetch full-price offers or better in record time.

These market conditions tend to drive prices higher. The median sales price increased 7.0 percent from last March to $237,500. Multiple offers on attractive, turn-key properties in the most desirable neighborhoods and school districts are common in low inventory environments. Properties also tend to sell quickly and for close to or above list price. Average days on market until sale fell 14.1 percent to 73 days compared to 85 in March 2016. It’s worth noting that the median days on market for March was a brisk 34 days. The average percent of original list price received at sale was 98.1 percent, 1.3 percent higher than last March. Similarly, the median percent of last list price received at sale was 100.0 percent. The Twin Cities has only 2.0 months of housing supply—the lowest March reading since 2003. Generally, five to six months of supply is considered a balanced market where neither buyers nor sellers have a clear advantage.MAAR-March-2017-Stats-News-Release-702x489

“Buyers were still very active during the first quarter,” said Cotty Lowry, Minneapolis Area Association of REALTORS® (MAAR) President. “This is encouraging as households adjust to marginally higher borrowing costs, though it’s likely a lack of listings that’s suppressing even stronger gains.”

A thriving local economy has been conducive to housing recovery. The most recent national unemployment rate is 4.5 percent, though it’s 4.2 percent locally. The Minneapolis–St. Paul region has a diversified and resilient economy with a talented workforce that’s enabled one of the highest homeownership rates in the country.

The average 30-year fixed mortgage rate has declined from 4.3 percent to 4.1 percent lately, still well below a long-term average of about 8.0 percent. Barring any unforeseen events, the Federal Reserve is likely to increase their target federal funds rate at least once more this year. Wage and inventory growth are key to offsetting affordability declines brought on by higher rates.

“We’re still seeking a healthier balance in the marketplace that enables all participants to achieve their goals,” said Kath Hammerseng, MAAR President-Elect. “It’s essential to bring additional options to buyers, particularly in the more affordable price brackets.”

From The Skinny Blog.

Weekly Market Report

For Week Ending April 8, 2017

With both inventory and months of supply struggling to keep up with demand, it will not be unusual to see some weeks where pending sales post a year-over-year decline, especially if new listings droop below the standards set during the prior year. Meanwhile, we can continue to expect to see sales prices forge their way upward and affordability shrink downward in what is expected to be a pleasant spring and summer for sellers.

In the Twin Cities region, for the week ending April 8:

  • New Listings increased 1.4% to 2,013
  • Pending Sales decreased 9.1% to 1,337
  • Inventory decreased 21.7% to 10,188

For the month of March:

  • Median Sales Price increased 7.0% to $237,500
  • Days on Market decreased 14.1% to 73
  • Percent of Original List Price Received increased 1.3% to 98.1%
  • Months Supply of Inventory decreased 19.2% to 2.1

All comparisons are to 2016

Click here for the full Weekly Market Activity Report. From The Skinny Blog.

Weekly Market Report

For Week Ending April 1, 2017

Confidence in buying a home has fallen according to the Fannie Mae Home Purchase Sentiment Index after hitting an all-time index high in February. Continuing price increases and low inventory are easy answers for why the index fell. The good news is that an improved employment outlook and higher wages are major factors toward purchasing a home, and demand is not expected to abate.

In the Twin Cities region, for the week ending April 1:

  • New Listings decreased 3.9% to 1,874
  • Pending Sales decreased 5.2% to 1,303
  • Inventory decreased 21.7% to 10,003

For the month of February:

  • Median Sales Price increased 7.7% to $223,250
  • Days on Market decreased 14.6% to 82
  • Percent of Original List Price Received increased 1.4% to 96.5%
  • Months Supply of Inventory decreased 28.0% to 1.8

All comparisons are to 2016

Click here for the full Weekly Market Activity Report. From The Skinny Blog.

Weekly Market Report

For Week Ending March 25, 2017

During the first quarter of 2017, housing affordability has clearly become an issue for some buyers, as prices continue to rise amidst strong demand. Even so, pending sales figures have generally remained positive across the nation. A better balance between high-price inventory and starter homes being sold would be the most beneficial situation for the marketplace.

In the Twin Cities region, for the week ending March 25:

  • New Listings increased 6.3% to 1,584
  • Pending Sales decreased 4.9% to 1,292
  • Inventory decreased 23.0% to 9,874

For the month of February:

  • Median Sales Price increased 7.6% to $223,000
  • Days on Market decreased 14.6% to 82
  • Percent of Original List Price Received increased 1.4% to 96.5%
  • Months Supply of Inventory decreased 28.0% to 1.8

All comparisons are to 2016

Click here for the full Weekly Market Activity Report. From The Skinny Blog.

Weekly Market Report

For Week Ending March 18, 2017

The number of existing home sales was down last month, indicating that there is still a large divide between supply and demand. However, we need to keep in mind that the value of the housing market is the highest it has been in years. Confidence and household incomes are increasing, which are indicators of future home buying, which should lead to a continued strong market.

In the Twin Cities region, for the week ending March 18:

  • New Listings decreased 2.2% to 1,728
  • Pending Sales decreased 2.7% to 1,247
  • Inventory decreased 23.7% to 9,633

For the month of February:

  • Median Sales Price increased 7.8% to $223,500
  • Days on Market decreased 14.6% to 82
  • Percent of Original List Price Received increased 1.4% to 96.5%
  • Months Supply of Inventory decreased 28.0% to 1.8

All comparisons are to 2016

Click here for the full Weekly Market Activity Report. From The Skinny Blog.

Dear sellers, now is your time to shine!

By David Arbit on Monday, March 20th, 2017

With the number of homes available for sale at a 14-year low, the well-priced homes that are on the market are often getting full-price offers or better in record time. Active listings continue to drop, they’re currently down 25.3 percent compared to last February. Those shopping for homes have 8,820 options from which to choose. But not enough sellers are taking advantage of the opportunity to have their listing truly stand out. New listings declined 7.5 percent to 5,418, while buyers signed just slightly more contracts this February compared to last. Pending sales increased 0.5 percent from February 2016. The fact that contract signing hasn’t slowed down despite the supply constraints is testimony to the determination of Twin Cities home buyers. Closed sales, on the other hand, fell 18 units shy of last year’s levels.MAAR-February-2017-Stats-News-Release-702x490

The median sales price increased 7.6 percent from last February to $223,000. Competing bids in the form of multiple offers on attractive properties in the most desirable neighborhoods are common in low inventory environments. Properties also tend to sell quickly and for close to or above list price. Average days on market until sale fell 14.6 percent to 82 days compared to 96 in February 2016. The average percent of original list price received at sale was 96.5 percent, 1.4 percent higher than last February. Given the strong demand and weak supply, our market has only 1.8 months of supply—the second lowest figure on record for any month since January 2003. This indicator measures the balance between supply and demand. Generally, five to six months of supply is considered a balanced market.

“So far 2017 is off to a healthy start, but we need more sellers in order to sustain this recovery,” said Cotty Lowry, Minneapolis Area Association of REALTORS® (MAAR) President. “Diminishing gains on the demand side could already reflect the dramatic supply shortages that today’s home buyers are experiencing. It’s critical to aim for balance—where neither buyers nor sellers have a clear advantage.”

A thriving local economy has been conducive to housing recovery. The most recent national unemployment rate is 4.7 percent, though it’s 3.6 percent locally. The Minneapolis–St. Paul metropolitan area has one of the lowest unemployment rates of any major metro area. Private job growth has also exceeded expectations lately.

The average 30-year fixed mortgage rate stands at 4.17 percent, still well below a long-term average of roughly 8.0 percent. Many observers are expecting the Federal Reserve to increase their target federal funds rate at the March meeting. Barring any unforeseen events or economic data surprises, the Fed is likely to make at least one more rate adjustment in 2017. Job, wage and inventory growth are key to offsetting affordability declines brought on by higher rates.

“The momentum in the market continues to favor sellers and higher prices—though not in every area nor at every price point,” said Kath Hammerseng, MAAR President-Elect. “As we move into the spring market, more buyers will compete for limited inventory, making this environment quite attractive for sellers.”
From The Skinny Blog.

Weekly Market Report

For Week Ending March 11, 2017

In the last three months, the Federal Reserve has now twice increased its benchmark interest rate a quarter point. The good news is that this was an expected move due to strong confidence in the economy. Mortgage rates will likely increase as well. That said, homes are still selling quickly, and there is little indication that the trend will slow down in the spring and summer months.

In the Twin Cities region, for the week ending March 11:

  • New Listings decreased 3.3% to 1,740
  • Pending Sales decreased 11.1% to 1,102
  • Inventory decreased 24.8% to 9,290

For the month of February:

  • Median Sales Price increased 7.7% to $223,250
  • Days on Market decreased 14.6% to 82
  • Percent of Original List Price Received increased 1.4% to 96.5%
  • Months Supply of Inventory decreased 28.0% to 1.8

All comparisons are to 2016

Click here for the full Weekly Market Activity Report. From The Skinny Blog.