05 Feb Minnesota Real Estate Market February 5th
Minnesota Real Estate Market February 5th
Here is our February 5th, 2021, Minnesota real estate weekly update. Welcome to our winter real estate season. Last year was one for the history books. And I we are looking for a great 2021!
We have severe coronavirus concerns for our nation, the State of Minnesota, and the Minneapolis/St. Paul metro area. We are wearing masks in all indoor spaces and some restrictions now are being relaxed (see my update in a previous week’s newsletter). The Pandemic impacts our Minnesota real estate market and all other aspects of our life. We still do real estate business, just differently. For example, buyers are now driving their car to showings. The sellers are taking precautions like sanitizing their homes before and after showings. Showings are limited to 30 minutes and only one showing group is allowed in the house at any one time. Buyers and agents are wearing masks during all showings. Also, real estate closings are with buyers and sellers in separate rooms and most times they simply pre-sign. Those only essential to the transaction can attend closings. That means no agents or loan officers. Lastly, we use virtual tours and lots of photos and that helps determine if the buyers want to see the home or make an offer-physically sight unseen. Open houses are rare and not recommending by the Board of Realtors.
We review real estate facts and trends
In the winter, the buyer pool normally diminishes as do homes for sale, but not this year. The number of buyers outnumbers our homes for sale at this time. Our inventory of homes is low and last week we down 4.6% for new listings from the same week in 2019. We continue to see multiple offers. In this ever-changing real estate market what does that mean to you? It means you need an experienced real estate agent to coach you, so you accomplish your goals!
Facts are helpful since they give us insight into analyzing the trends and planning for the future. Still, it is our job to interpret the data. Our current affordability Index for Minnesota real estate is 153, compared to 151 last year at this same time. So, the higher the number means the greater the affordability. As of right now our inventory of available homes for sale is 5,056. For a comparison, we had 8,511 in 2019. So, in other words, the inventory of homes for sale is down 40.6% from last year. In further contrast, in 2009 we had over 30,000 homes for sale in the Minneapolis/Saint Paul metro area. Lastly, our Minnesota real estate pending sales for the week before last, which are those homes sold but not closed, was 879. In comparison to 806 pending home sales last year. As a result, we have 9.1% more pending sales than last year for that same week period. So as our pending sales increase and our inventory decreases our monthly supply of homes is down to 1 month compared to 1.7 last year at this time.
Minnesota seller’s benefit when real estate values rise. The median sales price increased by 10% since this time last year. $307,000 is now the median sales price in the Twin Cities area. A good market indicator is the comparison of our sales price to original list price. Our average sale to list price is currently 99.7%. And that compares to 97.3% last year. Also, an equally important indicator of market strength is the average days on the market. So, 39 average days on the market reflects a healthy, and brisk, Minnesota real estate market (that compares to 56 days last year at the same time).
Our current interest rates in the Twin Cities
Low interest rates increase the affordability of your home purchase. So, our current interest rates are a real benefit to Minnesota real estate. In fact, many mortgage companies love to provide mortgages to Minnesota home buyers. It is because of our low delinquency and unemployment rates. But most importantly our exceptionally low mortgage risk. As a result, we have some of the best home mortgage rates in the United States in our Twin Cities area. These rates are down a little from last week and the best I have ever seen! Rates are up slightly to 2.125% for VA, 2.125 for FHA and 2.375% for conventional. Just reach out to me if you need contact information of a lender with those rates.
My opinion of future Minnesota real estate trends
I have seen many types of real estate markets and trends in the last 30 years. But with coronavirus it makes this a more difficult winter and spring market to predict. But I believe from what I hear from many high-level business leaders and financial experts is that our economy has some rough times ahead. So, it is my opinion that we will have a limited amount of appreciation in 2021. As evictions and business closures run their course this will affect Minnesota real estate demand. An increase in inventory is likely as people are forced to sell their home because of a job loss. But interest rates will continue to be historically low and the federal reserve says it will not raise rates next year. This is a good time to discuss your housing needs for 2021.
Your house and your neighborhood Minnesota real estate market
We find that each price range and neighborhood have its own specific trends and facts. In so if you are interested in knowing the specifics for your home…Contact Jeff Today.