The Skinny

Weekly Market Activity Report

 

For the week ending August 20, Twin Cities home sellers continued to list fewer properties than last year at this time, as new listings were down 11.8 percent to 1,342. That makes for 11 consecutive weeks of (still welcome) declines. Meanwhile, buyer activity was up 53.3 percent over last year, the largest increase in 12 weeks and the 15th consecutive week of double-digit gains.

Inventory has been a winner all summer, and we haven't broken the positive pattern yet. The number of active listings for sale was down 20.0% from 2010 to 24,183 homes. That's the largest decline since the beginning of 2004 and represents more than 6,000 fewer homes on the market than at this time last year.

A flurry of housing and employment reports due out this week could set the stage for the rest of the year. These two economic indicators are more closely tied than ever.

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Weekly Market Activity Report

 As the final days of summer start to wane, Twin Cities home buyers posted their 14th consecutive week of double-digit, year-over-year gains. For the week ending August 13, there were 47.4 percent more purchase agreements signed than during the same week last year. A total of 952 buyers entered contract.

Sellers continued their slowdown, introducing only 1,387 new properties to the marketplace. That's 13.7 percent fewer than last year at this time. Slowed listings and comparatively strong sales figures have helped inventory levels post their largest weekly decline on record. The 24,232 active listings for sale were down 19.7 percent from last year. That record will likely be broken next week.

Renewed economic uncertainties combined with the Fed's announcement to maintain low interest rates could motivate some buyers to postpone their purchases. Though apparent in financial markets, the trepidation has yet to show up in local housing numbers. July's monthly data actually brought relief to some critical market indicators. Price declines are shrinking along with seller concessions, and absorption rates are finally moving in the right direction – toward balance.

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August Monthly 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 Cari Linn (2011 President-Elect, 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

 

While day traders continue along their roller coaster ride, 997 Twin Cities home buyers made the smart investment in real estate. That's 40.0 percent more than those who made the investment last year. As this year's pending sales trendline rounds off its seasonal peak, you'll notice that purchase demand is coming back in line with historical trends.

Sellers were another story. There were 1,433 new listings, 18.7 percent fewer than this time last year. Seller activity has also likely reached its seasonal peak but remains below historical levels for this time of year. Consequently, buyers have effectively absorbed existing supply. That's a good thing. The number of active listings is down 18.5 percent to 24,362 available homes for sale.

With strong sales and less new supply entering the market, the balance is shifting toward neutral. Both the prevalance and magnitude of seller concessions have stabilized, and absorption rates improved in July after 12 months of sizable increases. Though still slightly lower than last summer, prices have increased nearly 18.0 percent from March to June of this year.

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Real Estate News Clippings

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

The bids are back

Revisiting the Legacy of HAMP in a Great Contraction World

Market uncertainty pushes mortgage, interests rates in buyer's favor

House prices in Twin Cities continue to drop amid a few good signs

Twin Cities home sales up in July, prices down

More supply adjustments in Twin Cities housing market

Prices down, pending sales up in Twin Cities housing market (update)

Inventory Shrinks as New Listings Slow and Buyers Remain Active

 
Pending sales in the 13-county Twin Cities metropolitan area were up 42.7 percent over July 2010's post-tax credit slump. Buyers entered into 4,077 purchase agreements, marking the third consecutive month of double-digit year-over-year gains in purchase demand. Demand was certainly soft at this time last year, but 2011 sales volumes have been in line with historical seasonal levels. Sellers brought 5,802 new properties to the market, which was 16.1 percent fewer than July 2010. That's the sixth year-over-year monthly decline in seller activity in the past seven months.

Relatively strong sales and fewer new homes entering the market have drawn down available inventory. The 24,328 active homes on the market represent 18.8 percent fewer than last July. That's the largest year-over-year decline in inventory levels in the last seven years.

"Inventory corrections temper oversupply concerns," said Brad Fisher, President of the Minneapolis Area Association of REALTORS®. "We're already seeing diminishing seller concessions, reflecting a combination of less competition among sellers and stronger housing demand."

Metrowide prices were down 8.6 percent to $160,000. This is the smallest year-over-year decline in six months. Traditional prices declined 10.5 percent to $197,000; foreclosures fell 11.4 percent to $105,000; short sale prices were down 10.2 percent to $131,150. Over the past 12 months, the new construction segment enjoyed the largest price increase of 17.1 percent to $275,000. The single-family segment showed the smallest decline of 5.6 percent to $174,600.

The share of all closed sales that were foreclosure and short sales (lender-mediated) was stable at 38.5 percent. The share of all new listings that were lender-mediated increased slightly to 31.9 percent. The fact that relatively more homes in financial distress are selling off the market than are entering the market is still a positive sign.

On average, the amount that sellers can expect to receive of their asking price measures out to 91.7 percent. This is the highest level it has been since this time last year, offering further evidence that sellers are making fewer concessions to sell their homes.

Similarly, absorption rates posted their first decrease in a year, improving to 7.6 months supply of inventory. That's the lowest level in 15 months, indicative of a market moving from the buyers' favor toward one of balance.

"It was good to see stronger employment numbers in July," said Cari Linn, MAAR President-Elect. "There is obviously some uncertainty about global financial health, but job growth is still the fundamental driver of home purchase demand."

All information is according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc. MAAR is the leading regional advocate and provider of information services and research on the real estate industry for brokers, real estate professionals and the public. MAAR serves the Twin Cities 13-county metro area and western Wisconsin.

Weekly Market Activity Report

Despite the anxiety on Wall Street, home buyers on Main Street continued along their merry way. Twin Citizens entered into 1,029 purchase agreements, up 49.1 percent from the 690 seen during the same week in 2010. Sellers, conversely, introduced only 1,323 new properties to the market for a 15.8 percent decline from last year.

For buyers, that marks 12 consecutive weeks of double-digit increases in activity. For sellers, it marks eight consecutive weeks of declines in activity. Relatively strong sales coupled with subdued new listings has drawn down the inventory of actively marketed properties to 24,734. That’s a 17.9 percent decrease from last year at this time, the largest decline since November 2008.

Stay tuned for a flurry of media attention regarding July’s numbers to be released this week. Competitive pricing, low interest rates and high affordability continue to support a favorable purchase environment for buyers; while strong sales and declining supply should eventually translate into fewer and less dramatic seller concessions. These trends will bring a greater sense of balance and normalcy to the marketplace.

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Weekly Market Activity Report

For the week ending July 23, Twin Cities home-buying activity increased 54.3 percent while home-listing activity declined 13.2 percent compared to the same week in 2010. Buyers entered into 1,040 purchase agreements while sellers brought 1,380 new properties onto the market.

Sales are up, listings are down. We've heard it all summer. What else is new? Well, inventory levels are down 17.0 percent from 2010, which is the largest decline in 80 weeks or since January 2010. Buyers now have 24,897 properties from which to choose.

Let's visit some monthly numbers as well. The average amount that sellers receive on their asking price declined 2.1 percent in June to 91.4. Market times were up 17.7 percent to 140 days, prices were down 9.3 percent to $165,000. Each decrease or increase was the smallest in several months. Meanwhile, months supply of inventory shrunk 0.1 percent to 8.1, the first small yet measurable decline in 12 months.

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