28 May Real Estate Market May 28th
Real Estate Market May 28th
This is the May 28th, 2021, Minnesota real estate weekly update. We are now in middle of our busy Minnesota real estate season. As our coronavirus concerns reduce our real estate market just continues to increase. Some areas like Minneapolis and Saint Paul require masks but most of the State does not if you are vaccinated. We still are unable to all come together at closings but at some time in the future that will now change.
We review real estate facts and future trends
Currently we have an abundance of buyers in the marketplace, but not enough homes for sale. Our inventory of homes is exceptionally low but last week we went up 13.8% for new listings compared to the same week in 2020. We continue to see multiple offers on almost all listings. 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 with multiple offers!
Facts give us insight into analyzing the trends and our market future. But still, it is our job to interpret that data. Our current housing affordability Index for Minnesota real estate is 133, compared to 142 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 5,765. In comparison, we had 10,641 in 2020. So, the inventory of homes for sale is down 45.8% 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 1,573. That compares to 1,386 pending home sales last year (during the middle of the pandemic). As a result, we have 13.5% more pending sales than last year for that same week period. So, our pending sales has increased, and our inventory of homes is still dramatically decreased. That puts more pressure on our Minnesota real estate market. Our monthly supply of homes reflects that…it is down to 1 month compared to 2.1 last year.
Minnesota seller’s benefit financially when real estate values rise. The median sales price increased by 10.5% since this time last year. $336,250 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 103.3%. And that compares to 99.9% in 2020. In addition, a good indicator of Minnesota real estate market strength is the average days on the market. Our 31 average days on the market reflects an overactive Minnesota real estate market – this compares to 47 days last year at the same time. So, days on the market is down 34% 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. Rates for buyer paid lender fees are 2.199% for VA, 2.149 for FHA and 2.5% for conventional. Rates for lender paid closing costs are 2.686% for VA, 2.633 for FHA and 3.070% 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 coming out of the pandemic it makes this a more challenging 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 next fall and winter will be more of a sensible market as inventory begins to meet demand. But this spring and summer it will be more of what we are experiencing now! 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. This impacts mortgage interest rates more than Federal Reserve actions. I predict 3.5% interest rates by the end of 2021 and 4-5% in 2022.
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.