Minnesota Real Estate Update June 5th

real estate market june 5th

Minnesota Real Estate Update June 5th

Minnesota Real Estate Update June 5th

This is our Minnesota real estate update for June 5th, 2022. We are experiencing record sale prices, historically low inventories, and multiple offers. But with raising interest rates we are beginning to see our intense market showing signs of relaxing as buyers come to grip with getting less house for the same payment. In addition, many buyers are electing to rent for another year even thought rents went up over thirty percent the last year nationwide.

Coronavirus? It is still out there and continuing to to affect us. It seems everyone knows someone with it right now. The good news is that the severity of the newest variant is less than others before it and hospitalization have not increased with the increase in cases.

We review real estate facts and future trends

The trends

We are still in a seller’s market with historically low housing inventory. So, what does that mean? That you should strongly consider working with an experienced real estate agent to give you an edge in buying or selling process. Experience is priceless and for a buyer it costs you nothing but can save you much.

The facts

Here are facts of our current Minnesota real estate market. Our current housing affordability Index for Minnesota real estate for April was 102, and this compares to 144 this same time last year. The number of 102 is the lowest ever recorded. The higher the number means the greater home buying affordability in the Twin Cities. So, this trend is not positive at all. Our current inventory of homes for sale is 6,626. Of that number 38 % is new construction with the majority of those yet to be built. So, the real number of available homes to buy right now is much lower than 6.626. In comparison, we had 6,438 in 2021. So, the inventory of homes for sale is up 2.9 % from last year. This is the first time it is up this year! A point of interest, in 2009 at the time of our first real estate correction in 40 years, we had over 36,000 homes for sale in the seven county Minneapolis/Saint Paul metro area. The Minnesota real estate pending sales for the last week, which have sold but not yet closed, was 1,490. That compares to 1,632 pending home sales last year. That is a decrease of 8.7 % from the same week last year. So, forty-three of the last forty-eight weeks that number has decreased compared to the previous year. An average real estate market would have a three-to-four-month supply of housing inventory and we have 1.1 months.

More facts

Minnesota seller’s benefit financially when real estate values rise. The median sales price (April numbers) increased by 10 % since this time last year. $370,000 is now the median sales price in the Twin Cities area. A market health indicator is the comparison of our sales price to original list price. For April, the average sale to list price was 103.8 %. And that compares to 100.3 % in 2021. For even more Minnesota real estate market information visit my website at mnrealestate area appreciation. It features a comprehensive review of our Minnesota real estate market for those that like all the data!

Our current interest rates in the Twin Cities

The low interest rates have been a real catalyst for buying power for buyers the last two years. The Federal Reserve has started raising interest rates (did again this week) and expect 2-4 more this year. They recently said they will raise rates by half a percent in June and also in July. These interest rate increases are to reduce the rate of inflation, but they will also impact what buyers can afford. Rates are up a good amount from last week. Borrower paid lender fees are 4.125% for VA, 4.010% for FHA and 4.855% for conventional. Rates for lender paid closing costs are 5.305% for VA, 5.11% for FHA and 5.905% for conventional. Just reach out to me if you need contact information of a lender with those interest rates.

My opinion of the future of Minnesota real estate

In the last 30 years I have experienced many real estate markets, but hard to compare to the last couple of years. With inflation forcing the Federal Reserve to raise interest rates they could go to as high 6.5 % or more by fall of this year. This will affect what buyers can afford and some will decide to rent instead of buying. I predict this summer and fall that inventory will continue to be below the level needed for all buyers to find a home. But that is trending to a more neutral Minnesota real estate market.

This is a suitable time to discuss your housing needs for 2022!

Your house and neighborhood in our MN real estate market

We find that price ranges and neighborhoods have its own specific trends and facts. In so if you are interested in knowing the specifics for your home…just call Jeff.

Jeff Anderson

The Anderson Team

www.mnrealestate.com

RE/MAX RESULTS

612-386-8600

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