Twin Cities Housing Market Heats UP!
The Homes of Minnesota Team is happy to report that the Twin Cities real estate market is still trending UP! But don’t just take our word for it; let’s look at the facts that point toward good things ahead.
Like stocks and bonds, the price for local housing is directly correlated to its supply and demand. For the past six years we have watched as the supply of housing, meaning the number of houses for sale, increased week over week and month over month. The ballooning supply of homes, coupled with increased unemployment and lower consumer confidence, created a lower than normal demand for homes. This is why we experienced consistent drops in median and average sale prices. This trend continued for over five years as the median price for homes plummeted from its peak of $231,435 to a low of around $150,000.
Gradually, things changed. In early 2011, the supply of homes began to fall, reaching a milestone low in January 2012 when the available inventory of homes was 22,246. This was a milestone for our market because the last time there were so few homes available was in July 2005, which was also the time when the housing market was hitting its peak as the supply of homes available for sale was less than the demand by buyers seeking to purchase homes. Since the market reached the new “historic” low in January 2012, the inventory level of available homes has continued to drop each month throughout this year. As a result, homes are selling faster and home sellers are able to sell their homes at higher prices.
That is the trend for the market overall, but what about the individual segments that might affect your decision to buy or sell a home in the coming months?
Single Family Homes – Still HOT:
- The median sale price is now $178,486, up 5.0% when compared to the previous 12 months.
- The average days on market, or the average amount of time it takes to sell a home, are down 15.4% to 121 days.
- The current number of single family homes for sale is 13, 924, which is down 21.1% over a year ago.
Townhomes – We have upgraded this segment from Luke Warm to MEDIUM:
- The median sale price is currently $125,000, which is up 4.2% from the previous 12 months.
- The average days on market are down 18.5% to 127 days.
- The total number of townhomes available for sale is now 2,477, which is down 36.7% over 1-year ago.
Condos – We have also upgraded this segment from Luke Warm to WARM:
- The median sale price is now at $103,000, which is up 3% over 1-year ago and the first time it has been over $100,000 in over a year.
- The average days on market are down 12.8% to 165 days.
- The total number of condos currently for sale is 1,528, which is down about 30% over last year.
If you have thought about putting your home on the market in the coming months, rising prices and lower inventory is certainly good news and your timing might be perfect! But what if you are thinking about purchasing a home? The outlook is equally good because home buyers are able to purchase at near-bottom prices with mortgage interest rates that are historically low. This means that homes are more affordable now than they have been in nearly 70 years! And in case you are wondering, the last time mortgage interest rates were this low marked the beginning of 5 consecutive decades of home price appreciation!
We look forward to continuing to be your trusted Real Estate Experts and we welcome your phone calls or emails with specific questions about your Real Estate needs!