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
S&P/Case-Shiller Home Prices Indices..
This is a great chart showing the increase in home price by percentage for Cities, and the price decline by percentage from the Peak.
Great visual to see how Minneapolis/St Paul Twin Cities area did compared to the rest of the nation on the bubble and the burst.
Image by J. Stephen Conn via Flickr
A while back I posted a disturbing report from Core-Logic and I noted that “something wasn’t right”. The Core Logic report showed Minnesota property values declining more than the rest of the nation, on par with Michigan.
Today I stumbled into a short article from Minnesota Public Radio titled “Minnesotans Losing Economic ground“, which gives a little perspective on my previous post. This article from MPR is one of the big factors weighing on our regional real estate market.
…”The trend is even more dramatic when we look at median income,” Wessel said. “Only Michigan, with all the challenges of the automotive industry, has seen a larger drop in median income over the last decade.”
…Census department data also show the median income of Minnesotans is dropping more quickly than the national average, down 16 percent over the last decade versus the 6 percent experienced nationally.
Read Full Article
Not to try to state the obvious, but we really need to reverse this trend of median income dropping and high unemployment for our region… This is killing our real estate market.
I really am trying to look for positive news on this front… If you have a positive news story, please send it my way! Our housing inventory is way down, we have record low interest rates – but the unemployment and now median income is what is holding our market recovery back…
UPDATE: This article from MPR, Twin Cities housing numbers show lagging recovery was printed today as well. Wonder if they have drawn the connection between their 2 stories yet?