Monday, July 25th, 2016

Posted in Monthly Skinny Video |
Monday, July 25th, 2016

For Week Ending July 16, 2016

Tight credit seemed to be a factor in keeping new home construction down during the first half of 2016, but the situation is improving. June housing starts were up 4.8% from the month prior, as building recovers slowly from the housing bust. This is news we’re happy to report, especially when taking the continuing concern of high demand and low inventory into consideration.

In the Twin Cities region, for the week ending July 16:

  • New Listings increased 8.0% to 1,896
  • Pending Sales increased 10.6% to 1,332
  • Inventory decreased 18.4% to 14,376

For the month of June:

  • Median Sales Price increased 5.3% to $242,000
  • Days on Market decreased 15.2% to 56
  • Percent of Original List Price Received increased 0.9% to 98.6%
  • Months Supply of Inventory decreased 23.7% to 2.9

All comparisons are to 2015

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

Posted in Weekly Report |
Thursday, July 21st, 2016
By Aubray Erhardt on Tuesday, July 19th, 2016

The June 2016 median sales price for residential properties has reached a new all-time high, eclipsing the previous June 2006 record of $238,000. This measure of home prices rose 5.3 percent from June 2015 to $242,000. Seller activity rose 0.5 percent since last June to 8,727 new listings. Sales activity was roughly even with last year. Closed sales increased a modest 0.2 percent while pending sales—the number of signed purchase agreements—fell 0.7 percent. Buyers signed 6,175 new contracts and closed on 7,094 homes. That’s the highest volume of closed sales for any month going back to June 2004, a 12-year high. Mostly due to inventory constraints, prospective sellers are concerned about their ability to secure their next property in the current environment. June offered little supply-side relief, as inventory levels fell 18.2 percent to 14,214 active properties. Despite the attempt, consistent inventory shortages haven’t slowed down buyers much, given closed sales at a 12-year high.

Low inventory has helped draw out stronger offers. The average percent of original list price received at sale was 98.7 percent in June, the highest figure for any month since May 2005. Low levels of for-sale housing also means the homes on the market tend to sell quickly. Cumulative days on market until sale fell 16.7 percent to 55 days. That’s the fastest market time for any month since the beginning of 2007. Months supply of inventory fell 23.7 percent to 2.9 months—the lowest June figure on record going back to the beginning of 2003. Generally, five to six months of supply is considered a balanced market. While the metro as a whole is favoring sellers, not all areas, segments or price points necessarily reflect that. Market conditions are encouraging some sellers but not enough to fuel the demand seen in recent months.

July-MSP-Image-702x490“Prices returning to 2006 levels is nothing to fear,” said Judy Shields, Minneapolis Area Association of REALTORS® (MAAR) President. “This market is grounded in good fundamentals: supply and demand, smarter lending standards, job and wage growth, population growth, healthier household finances and rising rents. In the lead-up to 2006, home prices were driven by irrational exuberance and lax lending standards.”

A healthy Twin Cities labor market has also been conducive to our housing recovery. The most recent national unemployment rate is 4.9 percent, though it’s 3.1 percent locally. The Minneapolis-St. Paul-Bloomington metropolitan area has the third lowest unemployment rate of any major metro area. The fact that lower-priced foreclosures and short sales comprise a shrinking share of sales activity also helps with the recovery. Traditional (non-lender-mediated) properties made up 95.0 percent of all closed sales—the highest level in almost 10 years.

For the time being, the risk of higher interest rates seems to have subsided after “Brexit” and in light of other global economic concerns. Locally, the 30-year fixed mortgage rate fell to 3.5 percent compared to a long-term average of about 8.0 percent. Rates are now at their lowest level in three years. Marginally higher rates were widely expected in 2016, but further rate hikes are unlikely for the duration of the year.

“It shouldn’t be all that surprising that we’re back to where we were ten years ago,” said Cotty Lowry, MAAR President-Elect. “The forces behind this recovery are far more sustainable than last time. Clearly the Twin Cities economy is booming, even though buyers are still eager for more listings.”
From The Skinny Blog.

Posted in The Skinny |
Monday, July 18th, 2016

For Week Ending July 9, 2016

Sales have been brisk this summer, as the largest living generation in the U.S., the Millennials, enters the housing market in droves. Student loan debt is still a hindrance for many, but that has often been offset by continued low rates allowing for lower monthly mortgage payments. With rents on the rise, conditions for further sales are good, although, traditionally, the second half of summer is not as active as the first half.

In the Twin Cities region, for the week ending July 9:

  • New Listings decreased 23.2% to 1,649
  • Pending Sales decreased 20.4% to 1,033
  • Inventory decreased 18.5% to 14,104

For the month of June:

  • Median Sales Price increased 5.3% to $242,000
  • Days on Market decreased 16.7% to 55
  • Percent of Original List Price Received increased 1.0% to 98.7%
  • Months Supply of Inventory decreased 23.7% to 2.9

All comparisons are to 2015

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

Posted in Weekly Report |
Monday, July 11th, 2016

For Week Ending July 2, 2016

The United Kingdom vote for exit from the European Union (Brexit) has likely already had at least one short-term effect on the U.S. housing market. The decision to not raise interest rates until later this year was likely made because of Brexit, so unrest in financial markets can be watched further with hopes of stabilization. Long-term effects may include more or less foreign investment in U.S. residential real estate, but wholesale price declines are not expected any time soon.

In the Twin Cities region, for the week ending July 2:

  • New Listings increased 24.2% to 1,589
  • Pending Sales increased 12.9% to 1,351
  • Inventory decreased 17.7% to 14,480

For the month of June:

  • Median Sales Price increased 5.3% to $242,000
  • Days on Market decreased 16.7% to 55
  • Percent of Original List Price Received increased 1.0% to 98.7%
  • Months Supply of Inventory decreased 23.7% to 2.9

All comparisons are to 2015

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

Posted in Weekly Report |

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