11 Oct Twin Cities Real Estate Market Oct 11th
Twin Cities Area Real Estate Market
It is officially fall season in Minnesota. And boy is it going to feel like it this weekend! Most of us embrace the colder evenings, fall colors and the smell of fall in the air. In addition, the twin cities real estate market is a different market in the fall in Minnesota.
We review real estate facts and trends
In the Fall we have a smaller buyer pool. As well as a smaller home inventory. Our days on the market increases and showings on homes decrease. For my listings, I recommend that it is a good time of year for price reductions. However, that depends on days on the market and current demand. We do find that each area and price range is different. Therefore it is important that it is reflected in the decision. On the other hand our first time home buyer market is still strong. That is the $175,000 to $300,000 price range in Minneapolis/St Paul and suburbs.
Facts give us needed insight to read the trends. But it is up to us to interpret them. Our current affordability Index is 147, in contrast to 145 last year at this time. The higher the number means greater affordability. Right now our inventory of available homes is 12,716. In comparison, to 13,197 at this time in 2018. In other words, the homes for sale inventory is down 3.6%. 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 1,112. As opposed to 1,146 pending sales last year. As a result we have 3% fewer pending sales than last year.
We all benefit as sellers when values continue to raise. In so a median sales price increase 7% is a wonderful number. $286,875 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 active real estate market.
Our current interest rates in the Twin Cities
Interest rates increase the affordability of your home purchase. In addition, they can increase the number of available buyers to consider home listings. Consequently low interest rates are a real benefit to real estate market in Minnesota. Mortgage companies love to provide mortgages to Minnesota. Specificity 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 Minneapolis and St Paul. We have seen little or no movement in mortgage interest rates over the last week. Our rates are 3.25% for VA, 3.125% for FHA and 3.99% for conventional. In addition, 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 and 2020 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.