The Skinny

Weekly Market Activity Report

As compared to the second-half 2010 market-wide slowdown once the tax credit expired, seller activity remains below 2010 levels while buyer activity is rising up in line with historic norms.

Twin Cities home sellers brought 1,478 properties to the market, or 8.7 percent fewer than the same week last year. Buyers signed 1,064 purchase agreements, or 59.8 percent more than last year. That’s the largest year-over-year increase in pending sales since the third week in November 2008, greater than any single week during the 2009 and 2010 tax credits. Pent up demand, anyone?

The number of active listings has seen 22 straight weeks of year-over-year declines and seven weeks of month-to-month declines. It’s currently down 17.2 percent to 24,712. Inventory in 2011 peaked around 26,000 properties, down considerably from a 2007 peak of 36,700.

Slowed listings, falling supply and relatively strong sales have finally begun to draw down absorption rates. Months supply of inventory enjoyed its first decline in a year – suggesting balance lies ahead.

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July Skinny Video

Where has the Twin Cities real estate market been and where is it heading? This monthly summary provides an overview of current trends and projections for future activity. Narrated by Brad Fisher (2011 President, Minneapolis Area Association of REALTORS®), video produced by Chelsie Lopez. | CLICK HERE to view in a separate window or just check the embedded clip below:

Weekly Market Activity Report

Home sales in the Twin Cities housing market continue to show strong year-over-year growth, but we must continue to point out that this is mostly due to how extraordinarily quiet last year was at this time following the expiration of the federal home buyer tax credit.

For the week ending July 9, there were 788 pending sales, an increase of 40.2 percent from a year ago. The amount of signed purchase agreements seen in recent weeks is similar to the activity for the same weeks in the summer of 2008.

The good news is that fewer homes are being listed, which is helping to dampen any potential for an oversupply problem. Over the last three months, there have been roughly 1,400 fewer new listings than during the same period in 2010, and the inventory of available homes for sale is down 16.1 percent from this time last year.

As always, balance between buyers and sellers plus a healthy, sustainable market is the ultimate goal.

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Real Estate News Clippings

Here is list of recent articles related to our Housing Market.

Median home sales price drops to $165,000 in Twin Cities

Home buyers hit the pavement last month

Twin Cities home prices drop 9 percent, but pending sales rebound

Twin Cities home sales up again, but prices continue to drop

The next, worse financial crisis

Zillow.com tinkers with house values

Sales Still on the Rise as the Role of Foreclosures Diminishes

 
Pending sales in the 13-county Twin Cities metropolitan area were up in June 2011 an astonishing 48.1 percent over the June 2010 post-tax credit slump. The 4,492 signed contracts exceeded levels seen during any month in 2007, 2008, and 2010 except April. This dramatic increase is attributed to a sharp drop in 2010 post-tax credit sales combined with a steady increase in 2011 pending sales driven by soaring affordability.

Sellers introduced 6,942 new properties to the market, which was a 5.5 percent decrease from the year prior. Inventory levels were down 15.9 percent to 24,873 units—the lowest June inventory count since 2005 and a far cry from the 36,113 active listings seen in June 2007. Although the overall median sales price dropped 9.3% to $165,000, the year-over-year price declines are shrinking.

"Moderate price gains by year's end aren't out of the question," said Brad Fisher, President of the Minneapolis Area Association of REALTORS®. "We are not in a so-called double-dip situation. Today's prices are a return to sustainable recovery after a tax incentive honeymoon."

The number of foreclosure sales increased by 18.8 percent to comprise 29.1 percent of all sales; while traditional sales decreased 18.6 percent and now comprise 61.8 percent of all sales.

Distressed sales—those comprising both foreclosures and short sales—accounted for 38.2 percent of all sales, the lowest level since June 2010. Also, only 29.1 percent of new listings were distressed, the lowest level since May 2010. Excluding March and April of 2010, that 29.1 percent is the smallest share of distressed homes entering the market since June 2008.

The fact that relatively more homes in financial distress are selling off the market than are entering the market is good news.

Median prices for traditionally sold homes were down 6.8 percent to $202,000; foreclosure prices were down 12.8 percent to $106,000; short sale prices were down 15.9 percent to $130,000. On average, it now takes 140 days for a home to sell and sellers can expect to receive 91.4 percent of their asking price. Absorption rates posted their first decrease in a year, improving to 7.9 months of supply.

Weekly Market Activity Report

For the week ending July 2, there were 1,057 purchase agreements, a 58.2 percent increase over the 668 seen during the same week last year.

Let's sprinkle in some context. Over the past 10 weeks in the Twin Cities metro area, pending sales have increased slightly from 986 to 1,057. Over the same 10 weeks in 2010, pending sales plunged from a credit-inspired 1,505 to an unimpressive 668. The resulting year-over-year comparisons? Three consecutive weeks of 50.0 percent or greater gains and eight consecutive weeks of double-digit gains in buyer activity.

On the seller side, activity remains comparable with 2010 levels. The 1,396 new properties added to the market were only 0.7 percent under year-ago levels. Strong sales gains coupled with stagnant listing activity is dramatically drawing down inventory levels.

There are currently 25,613 homes being actively marketed in NorthstarMLS. That's down 15.6 percent from the 30,072 seen at this time last year, which is the largest inventory decline since January 2010.

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Weekly Market Activity Report

With the release of this week’s Weekly Market Activity Report, MAAR is transitioning to a new data collection methodology that automatically updates historical statistics to reflect the current data as it appears in NorthstarMLS. MAAR has been using this approach in almost all of our other reports for several years and we believe it represents the most accurate and up-to-date picture of the market. This means that numbers found in prior editions of this report may look different than what is being reported today.

In light of this, the week ending June 18th 2011 marked an important milestone for the Twin Cities housing market. More buyers entered into purchase agreements that week than during any non-tax credit year since the peak bubble year of 2006. That is to say the 1,076 signed contracts outpaced all of 2007 and all of 2008. The week ending June 25th enjoyed a 52.2 percent increase over the same sluggish, post-credit week in 2010 to reach 1,012.

New supply brought online by sellers fell below year-ago levels for the third straight week. The number of active listings for sale dropped 14.6 percent to 25,500, the largest decrease in 73 weeks or since January, 2010.

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