Market Update – September Stats

Market statistics for September have been released by the Minneapolis Area Association of Realtors (MAAR). New listings increased a bit for the first time since April, but more importantly, closed sales were not only 34.9% above last September…they were also a little higher than September of 2006! It’s exciting to see the ‘line’ for closed sales (red lower line below) finally cross over to go higher rather than continually lagging behind the last two years.

Chartsaleslist0908

The overall result of this is that, in spite of the increase in new listings, overall inventory is down and the micro absorption rate, calculated by dividing the total number of properties for sale by the closed sales for the month, is continuing to drift down as well.

Chartabsorb0908

Pending sales for the month were up again compared to last year, September even higher than August with a whopping 42.2% increase over 2007! According to MAAR, the last time there was a year-over-year sales increase even close to this was in March of 1998 when there was a 38.6% increase over the previous year. Some of this increased activity may have been due to the pressure to close before the last of the zero-down loan programs went away October 1st, but the foreclosure/short sale market didn’t usually allow 100% financing anyway so that may not have had as big an impact as we might think.

Chartpending0908

Foreclosures and short sales have been commanding a higher share of sales…a full 41.6% of September’s pending sales! I have recently noticed that banks have been dropping their prices and seem more ready to sell and get rid of inventory. The number of properties for sale under $150K increased by 58% in September compared to last year while properties in all other price ranges declined…the number of properties for sale dropped by 25.6% in the $190K-$350K price range and a combined 18.5% for all price ranges above $150K.

Overall, prices of lender-mediated homes decreased by 11.5% and traditional properties decreased by 8.6% compared to September of last year. This decline in prices to more affordable levels seems to indicate that this is a great time for buying property…and don’t forget about the current $7,500 tax credit for first-time homebuyers. Home mortgages are available and although rates have been volatile along with the rest of the financial market, they are still low by historical standards. Could prices drop even more? Of course, but prices are good and as prices have dropped sales have increased and inventory has decreased. That means fewer choices. As evidenced when I was out looking at foreclosures with clients this weekend, good properties at bargain basement prices are getting harder to find. 

The figures above are for the combined 13-county Twin Cities metropolitan area. Click here to see local reports for 125 metro area communities.

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I love what I do! Highly insightful, analytical and creative, there is nothing I love more than helping you find the right solution for your real estate transition. My mission is to serve my clients with honesty and integrity, exceeding their expectations in service and support… and to help others by donating a portion of every transaction to Habitat for Humanity.

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