27 Nov Minnesota Real Estate Market November 27th
Minnesota Real Estate Market November 27th
Here is our November 27th, Minnesota real estate update. We are now in our fall real estate season, but it seems like winter! We have never seen a real estate market like this year before. And no one wants to see it ever again! We still have coronavirus concerns for our country, the State of Minnesota, and the Twin Cities. This includes wearing masks in all indoor spaces that started in July and the new restrictions starting last week (see my previous article on Minnesota’s COVID response). And how does that impact our Minnesota real estate market? We continue to do real estate business, just very differently. So, masked buyers are now driving separately to showings. The sellers are sanitizing their homes before and after showings. Showings are limited to 30 minutes and only one group is allowed in the house at a time. Also, real estate closings have changed with buyers and sellers in separate rooms and many times they pre-sign. And only those essential to the transaction can attend. Lastly, we use virtual tours and lots of photos and that helps determine if buyers want to see the home or make an offer-but seen only virtually. Open houses are rare and not recommending by the Board of Realtors.
We review real estate facts and trends
This time of the year the buyer pool is starting to diminish. COVID19 has limited the buyer pool and it will not meet its full potential this year. Our inventory of homes is low and last week we were down 6.3% from the same week in 2019. We continue to see multiple offers, but that is diminishing each week. In this ever-changing market what does that mean to you? In these usual times you need a good agent to coach you!
Facts are wonderful since they give us insight into analyzing the trends. Still, it is up to us to interpret them. Our current affordability Index for Minnesota real estate is 146, compared to 147 last year at this time. So, the higher the number means greater affordability. Currently, our inventory of available homes is 8,004. In comparison, we had 11,819 in 2019. In other words, the inventory of homes for sale is down 32.3% since last year. In contrast, in 2009 we had over 30,000 homes for sale in the Twin Cities. Lastly, our Minnesota real estate pending sales for the week before last, which is those sold but not closed, was 1,096. As opposed to 1,046 pending sales last year. As a result, we have 4.8% more pending sales than last year for that week period. Our monthly supply of home is at 1.6 compared to 2.5 last year at this time.
Minnesota seller’s benefit when real estate values rise. The median sales price increased 12.5% since last year. $315,000 is 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 100.5%. That compares to 98.1% last year. An equally important indicator of market strength is days on the market. So, 35 average days on the market reflects a healthy Minnesota real estate market (that compares to 46 days last year).
Our current interest rates in the Twin Cities
Interest rates increase the affordability of your home purchase. Consequently, low interest rates are a real benefit to Minnesota real estate. In fact, mortgage companies love to provide mortgages to Minnesota. Because of our low delinquency and employment rates. But most importantly our low mortgage risk. As a result, we have some of the best mortgage rates in the United States in our Twin Cities. Our mortgage interest rates are same as last week. These rates are the best I have ever seen! Rates are 2.25% for VA, 2.25% for FHA and 2.35% for conventional. Just reach out to me if you want to talk to a lender with that program and 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 an unusual market to predict. But I believe from what I hear from many high-level business leaders and financial experts that our economy has a rough road ahead. So, it is my opinion that we will have only a little appreciation in 2021. We could have a small retraction in values in the spring and summer of next year as evictions, business closures and foreclosures run their course. In addition, interest rates will continue to be historically low. If you are on the fence whether to sell your home now or next spring…I suggest now!
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.