23 Jul Real Estate Market July 23rd Minnesota
Real Estate Market July 23rd Minnesota
This is the July 23rd, 2021, Minnesota real estate weekly update. We are now in middle of our summer Minnesota real estate season. Coronavirus concerns are no longer affecting Minnesota real estate. Even areas like Minneapolis and Saint Paul do not require masks anymore if you are vaccinated.
We review real estate facts and future trends
Currently we have more buyers in the marketplace, but not quite as many homes for sale (condos are an exception). Our inventory of homes is low but with buyers falling out of the market and with listings increasing so we are in the process of a more neutral real estate market. We continue to see some multiple offers on listings, it is very location and price specific. Some areas are experiencing a dramatic slowdown in showings and offers. So, what does that mean to you? It means you should strongly consider working with an experienced real estate agent, who can give you suggestions and options, so you come out ahead. That means getting maximum sales price for your home and/or be the happy buyer who has the winning bid!
Facts give us insight into analyzing the trends and our market future and here are some important facts to review. Our current housing affordability Index for Minnesota real estate is 130, compared to 145 this same time last year. The higher the number means the greater the home buying affordability. Our current inventory of available homes for sale is 6,708. In comparison, we had 9,952 in 2020. So, the inventory of homes for sale is down 32.6% (33.5% last week) from last year. In further contrast, in 2009 we had over 36,000 homes for sale in the entire Minneapolis/Saint Paul metro area. Lastly, the Minnesota real estate pending sales for the week before last, which have sold but not yet closed, was 1,103. That compares to 1,578 pending home sales last year (during the middle of the pandemic). As a result, we have 30.1% less pending sales than last year for that same week period. That follows three weeks of less pending sales than the previous year. So, our pending sales are now decreasing, and our inventory of homes is still less (but slowly increasing). That puts more pressure on our Minnesota real estate market. Our monthly supply of homes reflects that…it is down to 1.2 month compared to 2.1 last year.
Minnesota seller’s benefit financially when real estate values rise. The median sales price increased by 14.8% since this time last year. $350,000 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. Right now, our average sale to list price is currently 104.1%. And that compares to 99.6% in 2020. In addition, a good indicator of Minnesota real estate market strength is the average days on the market. Our 20 average days on the market reflects an overactive Minnesota real estate market – this compares to 42 days last year at the same time. So, days on the market is down 52.4% compared to last year. For even more Minnesota real estate market information visit my website at https://www.mnrealestate.com/twin-cities-information/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
Low interest rates substantially increase the buyer’s purchase power and the price range of a buyer’s home purchase. So, these low current interest rates are a real benefit to our Minnesota real estate market. Mortgage companies like to provide mortgages to Minnesota home buyers because of our low delinquency and unemployment rates. These factors result in a low mortgage risk to lenders. As a result, we have some of the best home mortgage rates in the United States. These rates are about the same as last week and the trend we are starting to see is rates rising in the distant future, but maybe down a little in the near term. Rates for buyer paid lender fees are 2.125% for VA, 2.125 for FHA and 2.5% for conventional. Rates for lender paid closing costs are 2.574% for VA, 2.530 for FHA and 2.991% 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
I have seen different Minnesota real estate markets and trends over the last 30 years. With the pandemic and the delta plus variant takes such a toll on the unvaccinated it makes this a more challenging late summer and fall market to predict. Our desire to at last have some normalcy will boost our economy but finding workers will limit our growth. So, I predict this summer and fall will start to be a more sensible market as inventory slowly begins to meet demand and buyers fall out of the market. Interest rates will continue to be historically low but trending up as the 10-year Treasury rate increases with the prospect of inflation raising its ugly head. But as the delta plus variant takes hold this could dramatically slow down our recovery and workers desire to return to work. So much is on the line for us as individuals and our country with controlling the spread of this terrible sickness.
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.