Interesting… residential real estate is having one of its best years since 2005,… and the federal reserve is raising rates for the first time since 2006… is there a correlation?
There does appear to be a correlation between new listings…
…and closed sales, love how the trajectory is almost identical in the two charts from October to November.
Especially with the reality that the federal reserve really IS raising rates this time, buyers are more eager than ever to find a home… but still want to find the 'right' home. This is why sales are tied so closely to new listings… buyers eagerly scour new listings waiting for 'the one'.
This chart of historical months supply of inventory perhaps says it best. The November 2015 months supply of inventory of 2.7 is 30.8% below last November… but also the lowest in over 10 years. (A balanced market is a 5-6 month supply of inventory.)
Part of the reason for the short supply compared to the peak years is fewer foreclosures and short sales. Traditional sales continue to dominate the market, which of course is the sign of a healthy market and part of the reason for the rise in interest rates.
Also a strong driving force in our local Twin Cities market is a remarkable 3.1 percent unemployment rate… the lowest rate of any major metropolitan area. This is likely to keep the real estate market healthy and improving in spite of rising interest rates… expected to reach 4.5 percent by the end of 2016. Don't miss the great infographic Angela shared about the impact of the increase in the Federal Reserve rate.
Prices continue to show growth…
…fueled by low inventory and desire for buyers to find a home before prices and interest rates rise even higher, reducing buying power. Inventory levels in November 2015 were 18.5% below the same time last year.
Whether you are a seller wondering if this is a good time to sell, or a buyer wondering if it is a good time to buy… the answer is yes.
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.
Click here for local reports on 350+ metro area communities
Click here for current interactive market analytics by area, city, county, neighborhood or zip code
Sharlene Hensrud, RE/MAX Results – Email – Minneapolis – St. Paul Real Estate Market
HomesMSP Team- Sharlene, John, Angela – Minneapolis-St. Paul Realtors