According to March statistics released by the Minneapolis Area Association of Realtors last week, March closed sales were up 14.3% over last year. Pending sales were up even more…a whopping 21.3% over last year…indicating this increased sales trend is not only continuing, it appears to be escalating.
The number of sales closed in March was not only higher than last year, it was even a few sales ahead of 2007 levels. You can see in the chart below that 2008 sales showed notable upticks compared to the previous year in September, marking the demise of 100% financing…and in December, when interest rates dropped significantly.
This rise in sales is due to single-family house sales…sales for townhomes and condos continue to lag behind previous years. The uptick in sales is also for homes priced below $190,000, with home sales above that price lagging 20% behind last year.
In spite of a March increase in the number of new listings more closely paralleling 2007 levels, the increase in sales is keeping the total number of homes for sale from jumping in a similar fashion.
The total number of homes for sale has continued to hang below the previous year since it crossed over in May of last year, meaning that we now have more buyers competing for fewer homes. That diminshed supply of choices is offset, however, by a leap in housing affordability of 40.6% over last year at this time due to declines in both prices and interest rates.
Sale price has been on a long slide downward. March moved up a bit compared to last month, as it has done in previous years at this time…likely due to the traditional spring market increase in the sale of properties that are not lender-mediated foreclosures or short sales. Median sale price of traditional homes was down only 2.3% compared to last year, while median lender-mediated sale price was down 23.0%.
The market is considered to be balanced between buyers and sellers when there is roughly a 5-month supply of homes available for puchase. In April 2007 there was a 7.7 month supply…in 2008 the supply was up to 9.6 months…this year we are back to 2007 levels, with the overall supply again at 7.7 months.
These numbers change, however, when we look at the different types of properties. Houses are down to a 7-month supply, even below 2007 levels…townhouses are a little below last year…but the condo supply continues to increase, with fewer buyers resulting in more than a year's supply of condos currently available.
The figures above are for the combined 13-county Twin Cities metropolitan area. Click here for links to the full March combined report as well as local reports for 125 metro communities.
Sharlene Hensrud, Realtor – Twin Cities Market Info – Email
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