Another great weekly housing market update from Minneapolis Area Association of Realtors.
We continue to grind away at a faster pace on our inventory. This week’s year-over-year stats:
Change in New Listings: -13%
Change in Pending Sales: +48.3%
Change in Inventory: -21.0%
We are now down to 22,434 listings on the market.
View Full Weekly Market Update Report
Still heading the right direction! The 30 year fixed rate mortgage dipped below 4% for the first time ever last week which should hopefully improve the market conditions.
For the Week Ending October 1st we saw a continued weaning of inventory with fewer year over year new listings and increased Pending sales.
New Listings decreased 21.0% to 1,219
Pending Sales increased to 32.7% to 926
Inventory decreased 22.8% to 23,177
The inventory will continue to come down in it’s seasonal pattern, but year over year we are still down. If you look at the chart below you can see that we are in the range of the 2005 inventory levels.
I am going to stick my neck out on this one and “Call it”. We have just entered “Balanced Market” territory. We have now dipped below 7 month supply which puts us on the upper edge of a Balanced Market. As far as staying in this territory is whole other matter…
In a Balanced Market we should see sale prices holding closer to the asking prices giving us some price stability. To see prices increase we are going to need demand to kick up a few notches to bring us into the Seller’s Market of 1-4 month supply. But after the last few years, this is great news.
View Full Report from Minneapolis Area Association of Realtors
Another Monday and another good report from Minneapolis Area Association of Realtors Weekly Market Update. This report from the Twin Cities MLS shows us we are heading in the right direction.
Change in New Listings: -4.8% Change in Pending Sales: +47.7% Change in Inventory: – 22.6%
In a nut shell, we have fewer year over year new listings coming to the market, large increase in sales bringing our inventory down substantially year over year. Supply & Demand beginning to balance out.
Below is a chart from the report on our Supply of homes for sale. We are down to 23,351 homes for sale, down 22.6% from a year ago when we had 30,178 homes for sale. As we head into the winter months I suspect we will see our inventory adjust downwards potentially below 20,000. As the spring market starts kicking in mid January we will see the inventory climb back up. (good time to put your home up for sale, when there is less competition.) This of course is my speculation and time will tell…
click to enlarge
We are on track for price stabilization, first the sellers will get much closer to their asking price of which I think we are beginning to see signs of that. It is too early to call at this point, but I will monitor this and see if we get a trend starting. Unfortunately, this weekly update is showing a median sale price decrease by -11.4%. Keep in mind, this is “Median”, not home values all declined by that amount. This is more of indication on the price ranges that are selling…
click to enlarge
View Full Weekly Market Update report
This is great news. CoreLogic tracks the “Shadow Inventory” levels. The Shadow Inventory are the potential homes to hit the market due to foreclosures and is tracked by delinquency rates, so it is a moving target and difficult to track accurately.
These are of course National figures, and we are still unsure how much of this will impact our market. I have been speculating that we have been purging a lot of our shadow inventory through Short Sales in our marketplace because of our Judicial Foreclosure process in Minnesota. I am still trying to come up with reliable shadow inventory figures for our local marketplace.
The nation’s residential shadow inventory as of July declined slightly to 1.6 million units, representing a supply of five months, according to a report from CoreLogic.
That’s down from 1.9 million units, a supply of six months, from a year ago, and follows a decline from April when shadow inventory stood at 1.7 million units.
“The steady improvement in the shadow inventory is a positive development for the housing market,” said Mark Fleming, chief economist for CoreLogic. “However, continued price declines, high levels of negative equity and a sluggish labor market will keep the shadow supply elevated for an extended period of time.”
Read Full Article from CoreLogic
Last week’s real estate market update is in, for week ending September 10, 2011. We are continuing to show the positive trend of increased sales and less inventory. This is now 14 consecutive weeks of year-over-year declines in new listings. This is also 30 consecutive weeks of Inventory declines. Pending Sales are also up for 18 consecutive weeks year-over-year increase.
Here is this reports figures:
New Listings: -21.2% Pending Sales: +53% Inventory: -21.2%
Our inventory is now at 23,481. We are at about 2005 levels of inventory, if this trend continues we could be seeing 2004 inventory levels soon, okay I am getting ahead of myself. We are still awaiting the outcome of the foreclosure log jam begins let loose and how that might impact our market here. I am sticking with my speculation that we have already cleared a lot of those loans in our area with Short Sales, but time will tell.
Can you imagine what this might look like if we had low unemployment levels? I imagine we would be seeing a healthy real estate market again.
Read Full Weekly Report from Minneapolis Area Association of Realtors
I am really enjoying these reports now. For too long it was only bad news, now there is a positive trend happening. Our pending sales are continuing strong depleting our inventory even further.
This weeks stats: -14.3% new listings, +35.6% Pending sales, -20.9% Fewer Listings. (these are year over year figures)
We broke the 24,000 inventory figure and we are now 23,849 active properties for sale in the Twin Cities. This is great news. We will likely see the inventory drop even further as we had into fall and winter, a number of sellers opt to pull their homes from the market and wait for spring.
As we’ve previously pointed out, shrinking inventory levels can be an important market signal. There are currently 23,849 active listings from which buyers can choose, 20.9 percent fewer than last year at this time.
Next week, watch for a changing story with absorption rates and seller concessions. As supply and demand attempt to find neutral ground, sellers are making fewer concessions in order to sell their homes.
Source: Minneapolis Realtor Assocation of Minnesota
Week Ending 9/3/2011 Inventory Levels (click for larger view)
More good news on the Twin Cities Real Estate Market. MAAR’s Weekly Update is still showing a trend of declining new listings and sales holding strong.
-7.8% Change in New Listings, +43.3% Change in Pending Sales, -20.6% Change in Inventory.
We are burning up inventory, if sales pick up to more normal levels we could be looking at an inventory shortage. (okay – probably a leap, but we are down to 2005/2006 inventory levels when we had a 3 to 4 month supply of homes because of the pace of sales..)
We are now up to 14 consecutive weeks of accelerating inventory attrition. Let’s go out on a limb and call this a pattern. For the current period, the number of active listings was down 20.6 percent to 24,047 properties. That’s the largest inventory decline in nearly eight years. The metric is now back around first-quarter 2006 levels.It’s plain to see what’s driving these declines. Sales are up and listings are down, allowing buyers to absorb the active supply of homes. Buyer activity was up 43.3 percent to 957 purchase agreements signed. While those 957 contracts are reminiscent of 2007, 2008 and even 2009 purchase levels, they far exceed the 2010 summer slowdown. We have now reached 16 consecutive weeks of double-digit gains in buyer activity. Once again, it feels safe to call that a trend.
- MAAR Week Ending August 27, 2011 Inventory of Homes
This market update was put on the back-burner on getting posted because the Quarterly Case Shiller Index came out this morning. This one should not be overlooked, because this is actually a leading indicator to the Case Shiller Index for our area.
Minneapolis Area Association of Realtor released their Market Update. We are experiencing positive signs in the market, we have inventory shrinking and pending sales picking up. Ultimately these 2 factors will converge into stabilizing then increasing prices. (simple supply and demand) Pending Sales were up 53.3%, that is outstanding! Inventory shrunk by 20%, another astonishing figure. Now we have a trend going, the average of the last 3 months have been a 15% decrease in inventory and 44.2% increase in pending sales. We are now down to 2005/2006 inventory levels! Prices should begin stabilizing at this inventory level and sales activity, assuming these levels continue.
- Week Ending 8/20/2011 Inventory of Homes (Twin Cities)
Now the really cool thing is that the Affordability Index is really high. The Median household income is 234% of what is required to qualify for the median-priced home under current interest rates. Right now it is cheaper to own a home than it is to rent. This should attract more buyers back into the home market, fueling added demand – stabilizing prices. (* my traditional disclaimer, assuming we add employment to the region…)
If you have read the headlines today, you will see that New Construction sales are the worst in 50 years. These reports are based off of the US Census report issued this morning. Minneapolis Star Tribune covered this story as well.
Sales of new single-family houses in July 2011 were at a seasonally adjusted annual rate of 298,000 … This is 0.7 percent (±12.9%)* below the revised June rate of 300,000, but is 6.8 percent (±13.5%)* above the July 2010 estimate of 279,000.
The Twin Cities did a little better, we saw an increase of 23.5% in new construction sales from July 2010 to July 2011.
Here is a great graph from this report from Calculated Risk Blog:
New Homes Sales 07/2011 CalculatedRisk Blog
Looks pretty terrible. This is based on a National statistic, but how does it relate to our Twin Cities market? Below is a chart to compare, this chart only goes back to 2009 – but shows us the recent activity. We are in slightly better shape than this time last year. We are also tracking about right for New Construction inventory vs. Previously Owned Inventory, approx 1/5. However on the Sales, new construction is only accounting for about 6% of the sales – this should be closer to the 1/5 range.
One of the reasons for this disconnect is financing. Builders have almost no option on financing new inventory on a spec basis, so a good portion of the “actives” are listed as “To Be Built” (just a proposal). Buyers are reluctant to buy a house that can only be seen on paper…
On a side note, when the market comes back it is going to feel like it happened overnight. With the lending restrictions, it is going to be extremely difficult for Builders to gear production back up when our market will need additional inventory. This is not a problem yet, but I am predicting it will be.
Twin Cities New Construction Solds July 2011
The Minneapolis Area Association of Realtors published their Weekly Market Update. I pulled a couple of charts from here to show that we don’t have a housing inventory problem, we have a Jobs problem.
As you can see, from an “inventory” perspective, we are at about 2005 levels.
Twin Cities 8/13/2011 Inventory
Twin Cities 8/13/2011 Absorption Rate
However, our Month Supply of homes is closer to 2006 levels. The pace of sales is much slower, primarily due to consumer confidence (employment/jobs). We have record low mortgage interest rates, housing affordability hasn’t been better – yet the buyers are not out in force…