19 Mar Real Estate Market March 20th – Activity Report
Real Estate Market March 20th
Here is our real estate market March 20th, 2020 real estate update. We are quickly approaching of our spring season in Minnesota. And the days are now getting longer. So, make sure your gutter extensions are on for the spring rains. Since we need to keep the water away from the foundation until the frost is out of the ground.
We have coronavirus concerns for our country and how does that impact real estate? Our industry is more one on one and not a business that has crowds or large groups. Buyers are now driving separately to showings and sellers are sanitizing their homes before and after showings. Also, many meetings are happening with facetime with agents and lenders and their clients. Real estate closings have also changed. The buyers and sellers are in separate rooms. And only those essential to the transaction are able to attend. The title companies are also sanitizing before and after closings. Many homes have virtual tours and that will can help determine if you want to see that one. Go to an open house? I am not doing them and don’t see how that environment can be kept safe with people just coming in from the signs. I suggest you consider not attending those.
We review real estate facts and trends
This time of year, the buyer pool is quickly growing. As well as the inventory of homes to purchase. We are now seeing the start of our spring market. Our first-time home buyer market is very active in all areas. That price range is $175,000 to $300,000 in Minneapolis, St. Paul and area suburbs.
Facts are wonderful since they give us insight into analyzing the trends. Still, it is up to us to interpret them. Our current affordability Index is 153, compared to 148 last year at this time. So, the higher the number means greater affordability. Currently, our inventory of available homes is 8,001. In comparison, we had 8,992 in 2019. In other words, the inventory of homes for sale is down 11%. In contrast, in 2008 we had almost 36,000 homes for sale in the Twin Cities. Lastly, our pending sales, which is those sold but not closed, is 1,162. As opposed to 943 pending sales last year. As a result, we have 23.2% more pending sales than last year. So, sales are up, and inventory is down. That creates multiple offers and higher prices. Our monthly supple of home is down to 1.6. Compared to 1.8 last year at this time. This adds pressure to our value appreciation.
We all benefit as sellers when values continue to raise. In so a median sales price increase 6.2% is a strong number. And $281,500 is the median sales price in the Twin Cities area. I have found a powerful market indicator is the comparison of our sales price to original list price. I’m pleased to say our average sale to list price is 98%. This compares to 97.7% last year. Equally important indicator of market strength is days on the market. Therefore, 67 average days on the market reflects a healthy real estate market.
Our current interest rates in the Twin Cities
Interest rates increase the affordability of your home purchase. Consequently, low interest rates are a real benefit to real estate market in Minnesota. In fact, mortgage companies love to provide mortgages to Minnesota. Because of our low delinquency and employment rates. But most importantly our low mortgage risk. Accordingly, we have some of the best mortgage rates in the United States in the Twin Cities. Our mortgage interest rates are up a little over the last week. The rates are 3.375% for VA, 3.375% for FHA and only 3.5% for conventional. The lenders are increasing rates for refi’s since they are beyond capacity and they are trying to stem the tide. But they are providing lower rates for purchases. Furthermore, those rates are for a mortgage with no origination fee, no appraisal fee and no lender fees. Contact me if you want to talk to a lender with that program and rates. Great time to buy!
My opinion of future real estate trends
We have seen many types of markets and trends in the last 30 years. But with the coronavirus concerns it is an unusual market to predict. So, it is my opinion that we will continue to have 4% appreciation in 2020. That is because of low inventory of homes and amazing interest rates. In addition, I predict the inventory of first-time homebuyer homes will not be insufficient to match demand. Also, the areas with an abundance of new construction will have longer marketing times for existing homes. Finally, interest rates will continue to be historically low for at least until the November election.
Your House and neighborhood 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. Just call The Anderson Team.