19 Mar Minnesota Real Estate Market March 19th
Minnesota Real Estate Market March 19th
Here is our real estate market March 19th, 2021, Minnesota real estate weekly update. Welcome to our spring Minnesota real estate season. With the pandemic finally on the downturn we are looking forward to a genuinely great July 4th Independence Day when vaccinations and herd immunity give us normalcy once again!
While we continue to have coronavirus concerns for our nation, the State of Minnesota, and the Minneapolis/St. Paul metro area, but hope is eternal. We are still wearing masks in all indoor spaces and restrictions are now being relaxed. We still are doing Minnesota real estate business, but we are just doing it differently. As an example, the buyers are now driving their car to all showings. The sellers are taking precautions that include 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. Young children are discouraged from attending showings. Also, real estate closings have sellers pre-signing, and buyer(s) only attend closings. Only 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. That helps determine if the buyers want to see the home or make an offer-physically sight unseen. Open houses are rare and still not recommending by the Board of Realtors.
We review real estate facts and future trends
We are now in our full real estate spring season. We have an abundance of buyers in the marketplace, but not enough inventory of homes for sale. Our inventory of homes is low and last week we down 21.8% for new listings from the same week in 2020. We continue to see multiple offers on all listings. In this dynamic real estate market what does that mean to you? It means you need an experienced real estate agent to give you go suggestions and options, so you come out ahead in the offer process. That means getting maximum sales price for your house or be the buyer who gets the home with multiple offers!
Facts give us insight into analyzing the trends and our near-term market future. But it is our job to interpret the data. Our current affordability Index for Minnesota real estate is now 143, compared to 154 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 4,818. For a comparison, we had 8,702 in 2020. So, in other words, the inventory of homes for sale is down 44.6% from last year. In further contrast, in 2009 we had almost 36,000 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 1,130. In comparison to 1,150 pending home sales last year. As a result, we have 1.7% less pending sales than last year for that same week period. So as our pending sales slightly decreased, and our inventory has dramatically decreased, our monthly supply of homes is now down to .9 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 11.5% since this time last year. $314,000 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 100.1%. And that compares to 98% last year. Also, an equally important indicator of market strength is the average days on the market. So, 46 average days on the market reflects a healthy, and brisk, Minnesota real estate market (that compares to 67 days last year at the same time).
Our current interest rates in the Twin Cities
Low interest rates substantially increase the affordability of your home purchase. So, our current interest rates are a real benefit to our Minnesota real estate. In fact, many mortgage companies love to provide mortgages to Minnesota home buyer’s, and this is because of our low delinquency and unemployment rates. But most importantly our exceptionally low mortgage risk. So, we have some of the best home mortgage rates in the United States in our Twin Cities area. These rates are up from last week. The trend is that rates will continue to creep up. Rates are 2.259% for VA, 2.250 for FHA and 2.799% 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 spring and summer market to predict. From what I hear from many high-level business leaders and financial experts is that our economy has some difficult times ahead. But, with the stimulus now approved the chief adviser for Goodman Sachs says we will have historic growth this year of 7.3% increase in GNP. That is the highest since 1984. So, it is my opinion that we will have an extremely active spring Minnesota real estate season with low home inventory. But as evictions and business closures run their course later this year it will affect inventory as people are forced to sell their home because of a job loss and the pandemic. I predict the inventory will increase later this year, but pent-up demand will swallow it all up. Interest rates will continue to be historically low, and the federal reserve says it will not raise rates this or next year. But, with a robust economy, and the fears of inflation, the 10-year Treasury note will continue to increase and mortgage interest rates will be trending up in response.
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.