12 Mar Real Estate Market March 12th
Real Estate Market March 12th
This is our MN real estate weekly update for March 12th, 2022. Spring officially begins March 20th. Average temperature in Minnesota this time of year is 37 degrees…we would settle for average! Coronavirus concerns are diminishing. Pandemic soon to be over (we will then call it something else, Lol).
We review real estate facts and future trends
With our historically low inventory, 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 buying or selling process. Experience is priceless.
Here are facts of our current Minnesota real estate market. Our current housing affordability Index for Minnesota real estate for January was 127, and this compares to 154 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 homes for sale is 4,469. Of that number 38 % is new construction with many of those yet to be even built. So, the real number of available homes to buy right now is much lower than 4,429. In comparison, we had 5,381 in 2021. So, the inventory of homes for sale is down 16.9 % 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 964. That compares to 1,136 pending home sales last year. That is a decrease of 15.1 % from the same week last year. So, 32 of the last 37 weeks that number has decreased compared to last year. Our monthly supply of homes is .8 month compared to 1 month last year (January figures). An average real estate market would have a 3 – 4 month supply of housing inventory.
Minnesota seller’s benefit financially when real estate values rise. The median sales price (January numbers) increased by 10.6% since this time last year. $333,000 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 January, the average sale to list price was 99.6%. And that compares to 99.5% in 2021. For even more Minnesota real estate market information visit my website at mnrealestate. 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 expect one on March 15th. 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 big time form last week for borrower paid lender fees are 2.999% for VA, 2.999% for FHA and 3.699% for conventional. Rates for lender paid closing costs are 3.873% for VA, 4.031 for FHA and 4.543 % 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. 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. Rates could be as high as 5 % or more by fall of this year. 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!
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.