The Weekly Minnesota Real Estate Market Update – June 9th, 2008

More good news for our local Twin Cities real estate market! This past week, we saw our overall for sale inventory levels drop to 33,233 properties. This is down 4.1% compared to 2007 at this exact same time. For comparison sake, there were about 17,000 active listings for sale in June of 2004.

This past week, only 1,752 new listings came onto the market, a reduction of a whopping 23% compared to 2007. Pending sales rose by 4.9% to 798. (Pending sales are properties that have received a newly signed purchase agreement.)

More market statistics of interest:

There are 8.23 houses on the market for every one buyer. Last year at this time, there were 7.53 homes on the market for every one buyer. Average days on market for an MN MLS listing here in Minnesota is now at 159 days. This is up considerably from last year (27.9%.) The current supply rate here in the Twin Cities is 10.2 months. This means it would take 10.2 months for all of the active MLS listings to become pending and sell. In 2007 at this time, the supply rate was at 7.53. As you look at the various price ranges, the supply rate for homes $500,000 to $1,000,000 is 15.9 months. For homes over 1 million, this number jumps to 24.2. This means it would take over two years for the current supply of 1 million plus homes to sell if no new homes came onto the market?!?

Though all of this above news is not great news, it most assuredly is a move in the right direction for our local marketplace! Less homes on the MLS for sale, more properties being bought up by buyers and a shrinking overall supply level all are good news indeed! Slowly but steadily, with this type of activity in our local marketplace, we can begin to move out of current market state.

Interest rates continue to remain low, with buyer still being afforded outstanding rates at which to buy properties. The average 30 year fixed interest rate is at 6.5%.

Agents on our team are finding buyers, realizing it is a “buyer’s market,” are really taking their time and looking at numerous properties before making any decisions. Our buyers are also finding many of the bank owned listings in our market having multiple offers on them. Often times, these REO listings are really priced to sell, and buyers, after looking at numerous properties, realize a good price when they see one.

As a team, our listing load is currently at 175 properties. The showing activity on our listings across the board remains fairly strong. There is no doubt that buyers are out in full force, but again, they know they are under no pressure to make a quick decision on which home they like.

However, just because a home is newer on the market does not mean that all homes are taking a long time to sell. There are a number of newer listings that have received offers based on their overall solid pricing and condition of the home.