The Skinny

Weekly Market Activity Report

As expected, pending sales continued their post-tax credit deadline swoon in the Twin Cities housing market for the week ending May 15. There were 830 purchase agreements signed for the week, a large drop from the mark of 1,469 seen two weeks ago during the final week of the credit. The most recent week represents a 32.8 percent decrease from the same mark last year.

New Listings are also in decline, with the 1,582 posted for the week coming in at 19.3 percent behind a year ago. The decline in new supply is helping to offset some of the decline in sales, which is serving to hold inventory relatively steady for the time being.

It remains to be seen whether the large drop in activity is a temporary post-credit blip or a harbinger of a longer-term demand “cool down.” We’ll continue to keep a hawk’s eye on the numbers in the weeks ahead.

Click here to view the full Weekly Market Activity Report.

May Monthly Skinny Video Now Online

The May Monthly Skinny Video is now available. This month’s edition is narrated by Matt Strobl, MAAR's Treasurer, and provides another in-depth update on Twin Cities housing market trends. Well, it's at least 2:50 worth of in-depth. If you want deeper dives, just click some icons on the right side of this here blog. 

CLICK HERE to view in a separate window or just press the play button on the embedded clip below:

CLICK HERE to view in a separate window or just press the play button on the embedded clip below:

Weekly Market Activity Report

The Twin Cities housing market reacted as anticipated in the week following the end of the government tax credit. For the week ending May 8, there were 1,133 Pending Sales, a 4.4% drop below last year at this time. The year-over-year decline, which was the first since March 6, was likely owing to the number of buyers that acted in advance of the end of the tax credit.

Three other important numbers:

• Housing Affordability has dropped slightly for the month of May to 202. This is a 7.8 percent decrease from last year and is a product of both rising home prices and interest rates.
  
  
• After peaking in mid-April, New Listings continue to fall, settling at 1,550 units, down 24.7 percent from the same week last year.
  
  
• Months Supply of Inventory seems to be settling as well. At 6.7 houses per buyer, this is 13 percent below last year. This, too, is an indicator of some leveling in the market between buyers and sellers.

Click here for the full Weekly Market Activity Report

Tax Credit Boosts Sales and Prices – But Will It Last?

For the fourth consecutive month, home prices in the Twin Cities 13-county metropolitan area showed a year-over-year increase. We haven't seen four consecutive months of progressively increasing year-over-year growth since June 2004.

The April median sales price of $169,800 was an impressive 11.0 percent increase from $153,000 last April. That's the strongest year-over-year increase since we've had reliably comparable data (2001). These strong price increases are mostly due to lender-mediated inventory migrating through the system, diminishing one of the key factors that was deflating prices. The tax credit also played a role.

Lender-owned new listings were down 14.9 percent from last April; while pending short sales were up 77.3 percent over the same period. Both are positive indicators.

The median sales price of traditional homes (excluding foreclosures and short sales) in April was $199,650, down only $5,350 or 2.6 percent from $205,000 last April. Foreclosures posted a welcomed 9.6 percent increase to $126,000, while short sale properties posted a 1.5 percent decline to $147,750.

There were 5,781 signed purchase agreements in April, an increase of 10.9 percent from a year ago. That is the most for a single month since August 2005. Seller activity was also up, with 9,738 new listings posted—20.0 percent more than last April. Housing inventory for the Twin Cities is slightly down from last year at this time by 1.3 percent, settling in at 26,071 active listings for the end of April.

The tax credit temporarily increased pending sales and decreased inventory, and prices responded accordingly. Many regions across the country saw an uptick in activity as the April 30 federal tax credit deadline approached. Whtether or not we will see this continued level of elevated activity in the coming weeks and months depends on numerous factors.

In our market, buyer activity was certainly up, but in year-over-year comparisons, inventory remained relatively flat and the supply-demand ratio actually increased by 8.8 percent to 5.69. This means that there are 5.69 homes available per buyer for May. While the year-over-year rate of inventory decline has been slowing in recent months, supply and demand is far more balanced than it was two years ago when the supply-demand ratio was 7.33.

We'll need another month or two in the books before we can truly determine whether the increased sales activity is genuine market progress or if it is simply a short-term byproduct of the tax credit.

Weekly Market Activity Report

The expiration of the tax credit clearly motivated buyers to take action by April 30. Last week, there was a significant 31.2 percent jump in Pending Sales versus last year, bringing the total number of contracts written to 1,469. But for the first time this year the number of New Listings was down. A total of 1,803 of them entered the market, 11.5 percent lower than a year ago.

Some encouraging figures include a Days on Market count of 127, down 15.3 percent compared to last year, and Percent of Original List Price Received at Sale of 93.6 percent, up 4.0 percent over last year.

We expect buyer activity to continue over the coming weeks, although not with the same level of urgency due to the expired tax credits and a slight seasonal lull before we get into the heart of summer.

Click here for the full Weekly Market Activity Report

 

Weekly Market Activity Report

Well, the federal home buyer tax credit we've been talking about for the last 18 months has finally expired. All good (or bad, depending on your opinion) things must come to an end. Unfortunately, we won't have definitive evidence of how wild the final days of the credit were for another week as we wait for activity to be recorded in the MLS system.

In the meantime, we can still see that home sellers were far more active than home buyers for the week ending April 24, continuing a recent trend. There were 2,147 new listings during the week, an increase of 19.1 percent from a year ago. That's the seventh week of the last eight to show double-digit percentage increases in new listings.

Signed purchase agreements were also up but in a less extreme fashion. The 1,184 pending sales for the week were a 9.8 percent increase from a year ago.

As a result of the growth in new listings, we're projecting that the Supply-Demand Ratio for May 2010 will be 5.69 homes per buyer, a healthy balanced number but a smidge higher than the 5.23 mark of May 2009. Why point out such a subtle difference? Because that would be the first time we have seen a year-over-year increase since June 2008.

Click here for the full Weekly Market Activity Report.