06 Mar Real Estate Market March 6th – Activity Report
Real Estate Market March 6th
Here is our real estate market March 6th, 2020 real estate update. We approaching the end of our winter season in Minnesota. And the days are now getting longer! And daylight saving time is on March 8th. So have the snowblower ready at a moment’s notice for those late season blizzards. 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. Of course, we also have a different real estate climate this time of the year in Minnesota.
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 in the very near future. But now, since it is after the super bowl, we starting to see our spring market. Our first-time home buyer market is always active in most 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 160, compared to 152 last year at this time. So, the higher the number means greater affordability. Currently, our inventory of available homes is 7,734. In comparison, to 9.038 in 2019. In other words, the inventory of homes for sale is down 14.4%. 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 1,073. As opposed to 888 pending sales last year. As a result, we have 20.8% 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 4.2% is a strong number. And $270,000 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 97%. This compares to 97.1% 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 down quite a bit over the last week. The rates are 3.250% for VA, 2.99% for FHA (yes, that’s correct) and only 3.125% for conventional. They are down because so much money has moved into bonds. That’s due to the coronavirus concerns and money going into Treasury notes. 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 refi or buy!
My opinion of future real estate trends
We have seen many types of markets and trends in the last 30 years. So, it is my opinion that we will continue to have 6 % appreciation in 2020. This is an increase of my previous 2 to 4% estimate, because of inventory levels. 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.