04 Feb Real Estate Market February 4th
Real Estate Market February 4th
This is our MN real estate weekly update for February 4th, 2022. Winter solstice was December 21st and our days are now getting longer. Coronavirus concerns are here. The real estate industry is closely watching the Omicron Variant and the level of spreading in Minnesota. We are hoping we have peaked and the worst is behind us with no new variant in sight.
We review real estate facts and future trends
With our low inventory low, we are now back to a seller’s market. So, what does that mean? That you should strongly consider working with an experienced real estate agent to give you an edge in the transaction. Experience is priceless and can give you an advantage in the real estate transaction.
Here are facts of our current Minnesota real estate market. Our current housing affordability Index for MN real estate for December was 134, and this compares to 153 this same time last year. The higher the number means the greater home buying affordability in the Twin Cities. So, this trend is not positive. Our current inventory of available homes for sale is 4,491. In comparison, we had 5,719 in 2021. So, the inventory of homes for sale is down 21.5 % from last 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 Minneapolis/Saint Paul metro area. The Minnesota real estate pending sales for the last week, which have sold but not yet closed, was 767. That compares to 909 pending home sales last year. That is a decrease of 15.6% from the same week last year. So, 27 of the last 32 weeks that number has decreased compared to last year. Our monthly supply of homes is .8 month compared to 1.1 last year (December figures). An average real estate market would have a 3-4 months supply of housing inventory.
Minnesota seller’s benefit financially when real estate values rise. The median sales price (December numbers) increased by 7.9% since this time last year. $331,100 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 December, the average sale to list price was 99.5%. And that compares to 99.7% in 2021. For even more Minnesota real estate market information visit my website area appreciation rates. 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 and they say we are to have 2 to 3 more increases in 2022. These interest rate increases are to reduce the rate of inflation, but they will also impact what buyers can afford. Rates are up since last week and rates will continue. Rates for borrower paid lender fees are 2.625% for VA, 2.750% for FHA and 3.299% for conventional. Rates for lender paid closing costs are 3.387% for VA, 3.543 for FHA and 4.051 % 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 seen many real estate markets, but hard to compare to the last couple of years. Our desire to have normalcy will boost our economy, but shortage of workers and product delivered to our country and stores will increase inflation. In addition, inflation is increasing interest rates. I predict this spring inventories will continue to be below the level needed for all buyers to find a home. This will create multiple offers and high appreciation.
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.