27 Sep Minnesota Real Estate Market Trends
Real Estate Market Trends Minnesota
We enjoy the experience of the fall season in Minnesota…for instance we embrace the colder evenings, the fall colors and the smell of fall in the air. In addition, the real estate market trends in Minnesota are a very different market in this wonderful season.
I’m recommending to my clients that if we have any length to our marketing period this is a good time of year for price reductions. We do find that each area and price range is different, therefore it is important that is reflected in the decision. Our first time home buyer market is still has the greatest demand at the $175,000 to $300,000 price range in Minneapolis/St Paul.
We find that facts all by themselves don’t paint the entire real estate picture. But on the other hand they give us insight to read the trends. Our current affordability Index is 147, in contrast to 145 last year at this time. That is good news for us since the higher the number means greater affordability. Right now our inventory of available homes is 12,423, in comparison to 13,045 at this time in 2018. In other words, the homes for sale inventory is down 4.8%. With this in mind look at 2008, just before our correction, we had almost 36,000 homes for sale in the Twin Cities. In reviewing our pending sales (those sold but not closed) we have 1,144, as opposed to 1,241 pending sales last year at the same time. As a result we have 7.8% fewer pending sale this year than last. This number in itself is not alarming, but at the same time should be seriously monitored. We all benefit as sellers when values continue to raise in so median sales price increase 6.7% is a wonderful number. $260,000 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 99%, compared to 99.2% last year. Another good indicator of market strength is days on the market. Consequently our current number of 41 average days on the market reflects a good real estate market.
To sum up…every price range and every neighborhood has its own specific trend and facts, in so if you are interested in knowing the specifics for your home call The Anderson Team.
Our current interest rates in the Twin Cities
Interest rates increase the affordability of our home purchase and also can increase available buyers to our home listings. In so low interest rates are a real benefit to the health of the real estate market in Minnesota. Lenders love to provide mortgages here for their portfolios because of our low delinquency rates, low employment rates and at the same time our low mortgage risk. As a result we have some of the best mortgage rates in the United States in Minneapolis and St Paul. We have seen no movement in mortgage interest rates over the last week. Look at these great rates, namely 3.375% for VA, 3.25% for FHA and 3.99% for conventional. In addition, I even know of a lender who has no or very limited fees at that those rates.
My opinion of future real estate trends
My opinion for real estate trends is based on 30 plus years of real estate experience. I believe that we will continue to have 2-4% appreciation in 2020. I predict the inventory of first time homebuyer homes will be insufficient to match demand. The areas in the Twin Cities with an abundance of new construction will have longer market time and lower pricing pressures for existing homes. Interest rates will continue to be close to their current rates for at least until the November election. Hence, this fall and 2020 will be a strong real estate market.