March 2014 real estate stats are in… with inventory shortages and rising prices both signs of the impact of the decline in foreclosures and short sales. Perhaps nothing illustrates it more clearly than the graph below from the Minneapolis Area Association of Realtors showing the share of closed sales by market share of traditional, lender-owned and short sales.
You can see how wide the spread was between traditional sales and foreclosures at the beginning of 2007, when more than 90% of sales were traditional sales. Contrast that with just two years later, when in the beginning of 2009 about 60% of sales were lender-owned foreclosures or short sales! We still have a way to go, but the spread is continuing to grow, with 73.4% of March closed sales traditional sales… in other words, regular people are selling their homes again.
This rise in the share of traditional sales has also resulted in a continuing rise in median sale price with fewer foreclosures dragging down prices… which means more sellers are able to sell their homes and make a move.
This lower share of foreclosed properties has also impacted the low supply of inventory which has been plaguing us the last couple years. Traditional listings always drop in the winter months, but foreclosures had been taking up the slack since 2009. As the foreclosure supply has been dropping the last couple years there have not been enough traditional homes on the market to make up the difference… hence the meager supply of homes for sale.
This winter the supply was even lower than last year, which was already breaking records… and of course the record-breaking cold this winter didn't help much, either.
The ray of hope is the slight uptick in new listings… what usually happens at this time of year… and it is happening!
New listings are finally starting to rise, and the total number of homes for sale is close to last year's numbers.
Closed and pending sales in March both dropped this year, likely due to a combination of not enough homes to choose from and not enough warm enough days to go out searching for them.
I expect this to be the year of the move-up buyer, as conditions are finally favorable for many who have been financially unable to sell their current homes to do so and buy their next homes… a return to the normal cycle of life.
The figures above are based on statistics for the combined 13-county Twin Cities metropolitan area released by the Minneapolis Area Association of Realtors.
Never forget that all real estate is local and what is happening in your neighborhood may be very different from the overall metro area.
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