December 19, 2019
The economy continued to pick up momentum with a solid increase in residential construction, improvement in industrial output in our nation’s factories and a rise in job openings. While the economy is in a sweet spot, improvements in housing market sales volumes will be modest heading into next year simply due to the lack of available inventory. The demand is clearly not being met for entry-level Millennials and trade-up Generation X home buyers. If there was more inventory of unsold homes for buyers to choose from, home sales would be rising at a faster rate.
Information provided by Freddie Mac.
December 18, 2019
The Twin Cities real estate market showed a mostly positive but slightly mixed bag of results for November. New listings were up 0.1 percent year-to-date but down slightly in November. Helping to offset that decline was a 25.0 percent gain in newly built homes from last November. That’s because a builder doesn’t have to buy a home after selling one. Despite a sellers’ market and depending on price point, sellers still face the challenge of securing the next property while listing their current home.
Closed sales were also down slightly in November, but year-to-date closings are almost even with 2018. Sales have risen for the previous four consecutive months. Additionally, pending sales—a signed contract indicating a forthcoming closing—have now risen for five consecutive months, including November. This points to solid demand heading into the new year. Despite tight inventory, surprisingly low borrowing rates are helping to support this demand.
The number of homes for sale declined overall, but most price ranges have shown some growth this year. Over the last 12 months, housing inventory levels have increased for homes priced between $200K-$300K, $300K-$500K and over $500K but fell for homes under $200K. That first-time buyer segment still hasn’t seen supply growth.
The median home price in the Twin Cities has risen for 93 months or nearly 8 years, reaching new record highs every year since 2016. This isn’t the case for every market segment or area. The supply-demand imbalance pushes prices higher along with a changing mix of homes selling. There’s been growth in luxury activity and in square footage.
Market times remain brisk and near record lows, but there were a few monthly increases in 2019. Homes priced under $250K sold in a median of 25 days, while that figure was 91 days for homes over $1M.
November 2019 by the Numbers (compared to a year ago)
• Sellers listed 3,970 properties on the market, a 1.3 percent decrease from last November
• Buyers closed on 4,672 homes, a 0.8 percent decrease
• Inventory levels decreased 9.2 percent from last November to 10,011 units
• Months Supply of Inventory was down 9.1 percent to 2.0 months
• The Median Sales Price rose 5.6 percent to $279,900
• Cumulative Days on Market declined 1.9 percent to 51 days, on average (median of 29)
• Changes in Sales activity varied by market segment
o Single family sales rose 2.1 percent; condo sales decreased 10.7 percent; townhome sales fell 4.9 percent
o Traditional sales increased 0.7 percent; foreclosure sales dropped 34.7 percent; short sales were flat
o Previously owned sales were flat; new construction sales climbed 5.3 percent
“We’re on solid footing heading into year-end,” said Todd Urbanski, President of Minneapolis Area REALTORS®. “More inventory would be nice, but rates are fantastic, the economy is still growing and consumers are confident.”
“National news headlines have little to do with our local market,” said Linda Rogers, President-Elect of Minneapolis Area REALTORS®. “Our state and local economies are hardy and diversified, good news for home buyers.”
From The Skinny Blog.
For Week Ending December 7, 2019
Both conforming Conventional loan and FHA loan limits are increasing starting January 1, 2020 in an effort to trend higher with increasing home prices. These new higher limits will expand the pool of buyers able to take advantage of the most common financing options for primary residences. Additionally, the VA has announced that due to the Blue Water Navy Veterans Act of 2019, VA loans will no longer have fixed limits starting January 1, 2020, which should raise the number of active duty military and veterans that can take advantage of this great program. Of course in all cases, the borrower must still qualify for the loan amounts they are seeking, regardless of the caps.
In the Twin Cities region, for the week ending December 7:
- New Listings increased 9.6% to 867
- Pending Sales increased 19.2% to 905
- Inventory decreased 8.8% to 9,822
For the month of November:
- Median Sales Price increased 5.6% to $279,900
- Days on Market decreased 1.9% to 51
- Percent of Original List Price Received increased 0.2% to 97.5%
- Months Supply of Homes For Sale decreased 9.1% to 2.0
All comparisons are to 2018
December 12, 2019
With Federal Reserve policy on cruise control and the economy continuing to grow at a steady pace, mortgage rates have stabilized as the market searches for direction. The risk of an economic downturn has receded and, combined with the very strong job market, it should lead to a slightly higher rate environment. Since early September, when mortgage rates posted the year low of 3.49 percent, rates have moved up to 3.73 percent this week. Often, while higher mortgage rates are deleterious, improved economic sentiment is the reason that these higher rates have not impacted mortgage demand so far.
Information provided by Freddie Mac.
For Week Ending November 30, 2019
Americans across the country sat down to Thanksgiving with friends and family this week. Real estate activity took a backseat to the preparation of meals and the hosting of guests, where securing second helpings were more important than securing second homes. As we enter the final weeks of 2019, there is strength and optimism in the housing market, but at a pace that is muted due to the holiday season. The relatively low levels of inventory coupled with continued strong buyer activity are the common refrains across much of the country.
In the Twin Cities region, for the week ending November 30:
- New Listings decreased 43.6% to 501
- Pending Sales decreased 26.3% to 702
- Inventory decreased 6.6% to 10,461
For the month of October:
- Median Sales Price increased 5.7% to $280,000
- Days on Market decreased 4.2% to 46
- Percent of Original List Price Received increased 0.2% to 98.1%
- Months Supply of Homes For Sale decreased 4.0% to 2.4
All comparisons are to 2018