Closed sales took a plunge in July… no surprise because it closely mirrors the pending sales plunge in May following the end of the homebuyer tax credit. Pending sales usually become closed sales in a couple months.
Pending sales have still been dropping, but at more modest levels as the market struggles to find normal again after the tax credit caused a shift in buyer patterns.
New listings also saw shifts due to the tax credit and now also seem to be settling into a more normal pattern.
The net effect of the drop in sales and increase in new listings is growth in the total number of homes for sale, which gives buyers more options.
Condo sales continue to lag behind house and town house sales, which have been mirroring each other the last three months. We are now officially back to a buyer's market in all three categories. The market is considered balanced between buyer and seller when there is a 5-6 month supply of homes available for sale.
When broken out by price range, inventory in the lower price ranges is growing again, while all price ranges above $250,000 now have fewer homes for sale than they did last year. Sales increased over the last 12 months in the $120K-$190K and $350K-$500K categories.
You may have seen the article in yesterday's Star Tribune that talked about how sellers in Minneapolis are offering price reductions more often than in any other U.S. city, cutting prices at least once on 42 percent of all active for-sale listings, with an average markdown of 9 percent.
This makes sense when you look at the change in the number of property showings in our company this year compared to last year. The drop is pretty dramatic, demonstrating how many fewer buyers we have looking at homes this year after last year's buying frenzy.
Don't let the end of the tax credit 'sale' make you think it's no longer a good time to buy. This is a wonderful time to be a buyer! Interest rates continue to be at record lows meaning you can buy more house for the same monthly payment… prices are good… and inventory is growing again giving buyers great choices.
The figures above are based on statistics for the combined 13-county Twin Cities metropolitan area released by the Minneapolis Area Association of Realtors. Click here for links to local reports for 125 metro area communities.
Sharlene Hensrud, RE/MAX Results - Email – Minneapolis – St. Paul Real Estate Market Information