31 Jul Real Estate Market July 31st Minnesota
Real Estate Market July 31st Minnesota
This is the real estate market July 31st, and our Minnesota real estate weekly update. We are now in middle of our summer Minnesota real estate season. Coronavirus concerns are limited for Minnesota real estate. Minneapolis and Saint Paul do not require masks if you are vaccinated. Let’s hope we don’t have a step back with the Delta plus variant in Minnesota.
We review real estate facts and future trends
Currently we have more buyers in the marketplace than 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 quickly approaching a more neutral real estate market. We do continue to see multiple offers on some listings, but 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 in this changing market and/or be the happy buyer who has the winning bid!
Here are some facts of our current market. Our current housing affordability Index for Minnesota real estate is 130, and this compares to 145 this same time last year. The higher the number means the greater home buying affordability. Our current inventory of available homes for sale is 7,108. In comparison, we had 10,015 in 2020. So, the inventory of homes for sale is down 29% (32.6% last week) from last year. This number has decreased weekly since May with more homes coming on the market. 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 1,422. That compares to 1,616 pending home sales last year (during the middle of the pandemic). 5 of the last 7 weeks that number has decreased compared to last year. So, our pending sales are now decreasing, and our inventory of homes is increasing (but still less than last year). Our monthly supply of homes reflects that…it is 1.2 month compared to 2.1 last year but that’s for June and July’s numbers will reflect the rise in home inventory.
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. For June the average sale to list price is currently 104.1%. And that compares to 99.6% in 2020. This number will go down when we get July numbers. 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 (again that’s June numbers and July’s number will be higher). 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, our 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 low unemployment rates. These factors result in a low mortgage risk to lenders for Minnesota mortgages. As a result, we have some of the best home mortgage rates in the United States. These rates are down a little from 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 2.079% for VA, 2.073 for FHA and 2.467% for conventional. Rates for lender paid closing costs are 2.520% for VA, 2.510 for FHA and 2.971% 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 begins to meet demand and buyers fall out of the market. Interest rates will continue to be historically low but trending up late this year and next spring 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.