Pended sales & sold homes in the Minneapolis market, by neighborhood

Edina Realty Market Update – March 2009

The trend continues! For the ninth month in a row, pended sales in the Twin Cities area are up over the prior year. January pended sales were up more than 10 percent over last year; for the week ending Feb. 14, they were up 17 percent. Buyers really seem to be taking advantage of opportunities among lender mediated and bank owned properties, which currently account for about 60 percent of sales according to the Minneapolis Area Association of REALTORS® (MAAR).

146 – Cumulative days on market

10.3% – Fewer listings on the market than 1 year ago totaling 54,597

54% – Of the inventory that has sold in last 30 days has had a price adjustment

10.3% – Increase in sales over last year

14 – For every sale that takes place, there are 14 more properties that haven’t sold

23 – Showings for every home that sells

Listings down and pending sales up – hurray!

Improvements to the housing market continue to flourish during the month of February. The number of active listings is down 12% and new listings are down 15% from this time last year. Meanwhile, pended sales are up 25% from last year. Fewer houses on the market + more houses selling = happier sellers.

Supply-Demand and Housing Affordability

The Supply-Demand Ratio (SDR) tells us how many homes are on the market for every active buyer. In January 2009 the SDR was 8.36, which is down 19.7% from January 2008 when the SDR was 10.41. This number is up 18.2% from January 2007 when the SDR was 7.07%. What do these numbers mean? They mean we are working towards a balanced market – in an evenly balanced market the SDR will be closer to 4 or 5.

The current Housing Affordability Index is at a record high of 192. This is the highest it has even been since the Minneapolis Association of Realtors started tracking affordability during the 1980s. A year ago the affordability index was at 141 – which means that affordability is up 36.2% in the last year alone. For more information on Affordability, click here and here.

Pended sales are up

After two-plus years of a faltering market, a recent upswing in Twin Cities homes sales during the second half of 2008 is cause for some measured optimism heading into 2009. In the Twin Cities 13-county metro area, total pending sales for 2008 ended at 44,067, up 1.2 percent from 2007. This is the first year-over-year increase in pending sales since 2004. There were 38,746 closed home sales in 2008, down only 3.5 percent from 2007.

In the second half of the year, sales picked up momentum and haven’t let up since due to tumbling mortgage rates and increased affordability. Since July, there have been 15.7 percent more pending sales than there were during the same time period last year, and the most recent month saw a year-over-year increase of almost 30 percent.

Market Update – January 2009

The Minneapolis Area Association of REALTORS’® (MAAR) most recent market activity report (week of Jan. 5, 2009) features an updated supply-demand ratio (measures the number of houses for sale for each buyer) that illustrates significant changes from a year ago. This January’s number of 8.36 shows a decline of 19.7 percent from last January’s 10.41. That means for every buyer, there are about eight homes for sale compared with 10 for every buyer last year. The reduced supply can be attributed to fewer listings coming on the market, plunging mortgage rates and incredible home affordability levels – all of which are good signs for improving market conditions overall.

All housing activity in the Twin Cities market was slow during the week of the Christmas holiday as expected. Backing up a week, home sales for the week ending December 20 were 20.0 percent ahead of the same time last year thanks to a downward trend in mortgage rates to the lowest level in decades according to MAAR. In measuring the three week period following the rate cut, the increase in pending sales was 27.5 percent – 368 more pending sales than during the same period in 2007. During this same time, 57.6 percent of sales were lender mediated foreclosures and short sales and 45.8 percent were below $150,000, illustrating that buyers are capitalizing on great deals.

Holy Affordability, Batman!

Remember this post on the Housing Affordability Index? Remember that five-year high? Well…The Housing Affordability Index shot up 19 points to 180 thanks to the recent healthy declines in mortgage interest rates and a continued softening in home prices. So do you believe us now?

We’re waiting by our phones for your call. Can you think of a better gift for the New Year than a new house?! We don’t think so.

NEWS FLASH! Interest rates!

We just heard from Matt Havel at Edina Realty Mortgage that the interest rate for a 30-year fixed mortgage is only 5.25%!!!

Pended sales up in 2008

What’s new in the housing market?! One sign that the market is beginning to improve can be seen in the increase of pended sales over the past four months of 2008 compared to the same months in 2007. Why should you care?! Because more houses selling means that there are fewer houses on the market. Fewer houses on the market leads to a correction in the supply and demand of homes. And correction in the supply and demand means that houses will ultimately regain lost value. So who should be rejoicing?! Everyone!

Along with an increase in sales, we also know the average closed price of a home has fallen more than 15% in the 13 county metro area. While we don’t like to see sale prices falling, we do like to see people purchasing these properties. Many of our clients have been taking advantage of these deals – and according to the graph, they are not alone – many more people are taking advantage of these deals too.

Housing Affordability Update

The housing affordability index for the Minneapolis/St. Paul market reached 159 for the month of October, which represents a five-year high. But, what does this number mean?! It means that the median family income is 159% of the necessary income to qualify for the median priced home using a 20% down payment, 30-year fixed mortgage. All hail housing affordability!

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