Spring real estate has sprung

Spring brings renewed real estate activity to Minneapolis / St Paul

Spring 2016 has seen a welcome2_FTHB_1nice increase in real estate activity in the Twin Cities, MN area, with pending sales rising 12.6% compared to March 2015, and with the median sales price rising to $222,000, a nice 5.7% increase. Buyers signed 5,861 new purchase agreements.

Supply on the market remains a concern, area Realtor associations reported Thursday, with new listings rising only 0.5 percent, keeping supply levels at a 13-year low. Compared with last March, inventory levels fell 20.6 percent to 11,893 active properties.

Low inventory levels, at about a 10-year low is causing increased values, and multiple offers over asking price just days on the market for many homes for homes under $250,000.  As the home price goes up, it typically take longer for the homes to sell.

Mortgage lenders saw a large jump in mortgage loan pre-approval activity in February, which brings anecdotal evidence that there would be a surge of buyers this spring.


2015 Twin Cities home sales continue to strengthen

All signs point to Twin Cities home sales continuing to strengthen

Twin Cities homes sales maintained their strong pace through September, hitting a 10-year high, according to news releases this week from area Realtor associations.

signsThere were 5,114 closed sales last month, a 12 percent increase from last year and the highest level for September since 2005, the Minneapolis Area Association of Realtors said in a news release. Pending sales rose 12.3 percent to 4,635.

Fewer sellers listed their properties, with new listings decreasing 6.9 percent to 6,355. Inventory levels fell 16 percent to 15,928.

With more buyers than sellers, the median price rose 8.3 percent over last year to $222,000.

This supply-demand imbalance means prices have risen for 43 consecutive months, the association said.

Year-to-date prices have risen 6.8 percent on average

Also noted was a continued “product mix shift” back to traditional sales and away from distressed sales such as foreclosures. This also has brought up the median price.

We expect mortgage interest rates to stay below their long-term average for years to come, and around the low 4’s for the immediate future. The trick will be sustaining price gains that motivate enough sellers to list their properties without pricing out today’s buyers — particularly first time home buyers.

The momentum in both closed sales and pending sales certainly bodes well for 4th quarter and for a strong finish to 2015.

  • Anoka County – Up 11.4%
  • Carver County – Up 4.2%
  • Chisago County – Up 8.8%
  • Dakota County – Up 4.1%
  • Hennepin County – Up 7.5%
  • Ramsey County – Up 6.7%
  • Scott County – Up 3.4%
  • Washington County – Up 3.1%
  • Wright County – Up 14.8%
  • 13 County Metro area – up 8.3%


Twin Cities Home Prices Rise

The Twin Cities real estate market continues to defy the traditional assumptions of supply and demand as year-on-year home prices rise while supply also increases.

worth_balanceOne reason for this is that so-called distressed properties, short sales and foreclosures, continue to disappear from a market they once dominated. These properties — where the mortgage balance due exceeds the home’s value — artificially depressed home prices. Now, it’s the resurgence of so-called traditional sales that is inflating prices.

St. Paul and Minneapolis Realtors’ associations reported recently that the local median sales price rose 7.2 percent, year-on-year, to $209,000 in October. Inventory rose 4.3 percent. The median was$205,000 in September.

The local trade associations also noted a decline in deal activity, with pending sales down 1.3 percent from last year. This also can result in higher inventory. New listings decreased 2.3 percent.

Traditional new listings rose 6.7 percent, while foreclosure and short-sale new listings were down 42.4 and 31.3 percent, respectively.

Months’ supply of inventory was up 10.8 percent to 4.1 months. Days on market is down 4 percent to 72 days.

Both associations counted the developments as a positive, citing greater inventory for buyers, with better prices for traditional home sellers, super low Minnesota mortgage rates, and plenty of loan programs for first time home buyers.