People have been asking me lately if I have a noticed a slight slow-down in the market. My answer is yes, it isn't as frenzied as it was in April but it is still a strong market.
Looking at May stats confirms that activity has slowed somewhat, driven by a slow-down in new listings. Sellers tend to get preoccupied with other things the last part of May and beginning of June… end of the school year and related activities, graduations, weddings, opening the cabin, spring gardening, enjoying the great outdoors…
Bottom line is, listing homes for sale didn't take top priority in May. The surge we saw in February and March leveled off to about the same as last year.
Buyers have still been looking, but with fewer homes coming on the market there aren't as many for them to buy… resulting in pending sales taking a slight dip over last month, but still ahead of last year. You can clearly see the correlation between new listings and pending sales.
In the same way, you can see how May closed sales reflects the strong pending sales in March and April… it is often about 4-6 weeks from pending to closing. In fact, the last Friday of May was the busiest closing day on record… our closing office alone had 37 closings that day! Closed sales will likely moderate a bit in coming months as they catch up with moderated pending sales.
Median sale price continues to rise, at $224,000 in May.
What is perhaps the biggest indicator of the strength of the market is the steadily rising percentage of traditional listings… now at 91%. That means only 9% of May sales were foreclosures or short sales. Contrast that with May 2011, when only 48.8% of closed sales were traditional sales and 51.2% were foreclosures and short sales!
What this means, however, is that the ample supply of low-priced homes has diminished. While the change in the number of homes for sale levels off at $250k and increases above $350k, the number of homes for sale below $200k has dropped significantly, even over last year. If you are looking for a home in the lower price ranges and are having trouble finding anything, it is partly because the supply of low-priced foreclosures and foreclosures has plummeted. With a stronger market, prices are rising and there aren't many homes available in the lower price ranges.
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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