18 Oct Twin Cities Housing Market October 18th
Twin Cities Housing Market
It is officially fall season in Minnesota. And boy is it feeling like it! Most of us enjoy the colder evenings, the fall colors and the sweater weather. Likewise, the twin cites housing market changes with the fall climate in Minnesota.
We review real estate facts and trends
In the Fall we have always had a smaller buyer pool. As well as a smaller inventory of homes to buy. Our days on the market increases and showings on homes normally decrease. For many of my listings, I recommend that it is a good time of year for price reductions. Of course, that depends on days on the market and current demand. We do find that each area and price range is different. On the other hand our first time home buyer market is still going strong. 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 reading the trends. Still, it is up to us to interpret them. Our current affordability Index is 147, compared to 145 last year at this time. The higher the number means greater affordability. Right now our inventory of available homes is 12,597. In comparison, to 13,042 at this time in 2018. In other words, the inventory of homes for sale is down 3.4%. In contrast, in 2008 we had almost 36,000 homes for sale in the Twin Cities. Our pending sales, which is those sold but not closed, is 1180. As opposed to 1,163 pending sales last year. As a result we have 1.5% more pending sales than last year.
We all benefit as sellers when values continue to raise. In so a median sales price increase 7.1% is a wonderful number. $286,900 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%. This compares to 99.2% last year. Equally important indicator of market strength is days on the market. Therefore 41 average days on the market reflects an excellent 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. 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. We have seen little movement in mortgage interest rates over the last week. Our rates are 3.25% for VA, 3.375% for FHA and 3.99% for conventional. Furthermore, I know of a lender who has no or very limited fees at those interest rates.
My opinion of future real estate trends
In my 30 years of real estate I have seen many types of markets and trends. Therefore it is my opinion that we will continue to have 2-4% appreciation in 2020. I predict the inventory of first time homebuyer homes will not be insufficient to match demand. The areas with an abundance of new construction will have longer marketing time. In addition, they will have negative pricing pressures for existing homes. Interest rates will continue to be historically low for at least until the November election. Lastly, this fall will be an stable and above average real estate market.
Your House and neighborhood real estate market
Finally, each price range and 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.