07 May Real Estate Market May 7th Minnesota
Real Estate Market May 7th Minnesota
Here is our May 7th, 2021, Minnesota real estate weekly update. We are in our busy spring real estate season.
We still have coronavirus concerns for our nation, the State of Minnesota, and the Minneapolis/St. Paul metro area, but hope is eternal. With masks, vaccinations, and herd immunity we are determined to have a normal existence back again and it looks like normalcy is soon to be had! Unfortunately, we continue to be impacted with buyers still driving their car to all showings, and the sellers taking precautions that include having to sanitize their homes. Showings now are normally limited to 30 minutes. And no overlapping showings is recommended by the board of realtors. Young children are still discouraged from attending showings. If they do, they should have their hands held the entire time. Buyers and agents are wearing masks during showings. Real estate closings have the sellers pre-signing, and the buyer(s) only attend closings. Lastly, we use virtual tours and lots of photos to help the buyers if they want to see the house or make an offer-physically sight unseen. Open houses are coming back but they are not as common.
We review real estate facts and future trends
Currently we have an abundance of buyers in the marketplace, but not enough inventory of homes for sale. Our inventory of homes is exceptionally low but last week we went up 14.5% 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 137, compared to 146 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 5,337. In comparison, we had 10,163 in 2020. So, the inventory of homes for sale is down 47.5% 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 are homes sold but not yet closed, was 1,509. That compares to 1,090 pending home sales last year. As a result, we have 38.4% 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 1.9 last year.
Minnesota seller’s benefit financially when real estate values rise. The median sales price increased by 10.4% since this time last year. $328,000 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. Right now, our average sale to list price is currently 101.9%. And that compares to 99.2% in 2020. In addition, a good indicator of Minnesota real estate market strength is the average days on the market. Our 39 average days on the market reflects an overactive Minnesota real estate market – this compares to 61 days last year at the same time. So days on the market is down 36.1% 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 slightly up from last week and that is a trend we are starting to see. Rates for buyer paid lender fees are 2.125% for VA, 2.125 for FHA and 2.5% for conventional. Rates for lender paid closing costs are 2.5666% for VA, 2.536 for FHA and 3.044% 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 coronavirus it makes this a more challenging summer and fall market to predict. I hear from many high-level business leaders and financial experts is that our economy has some difficult times yet ahead. So, it is my opinion that we will have a highly active spring and summer with low home inventory. But as evictions and business closures run their course later this year it will affect inventory as people will elect to sell their home because of a job loss and the pandemic. So, I predict next fall and winter will be more of a sensible market as inventory begins to meet demand. This spring and summer it will be beyond rational – demand exceeds availability! 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.
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.