I feel like a broken record, but the biggest obstacle in the real estate market right now is lack of inventory. According to data recently released by the Minneapolis Area Association of Realtors new listings for February 2016 were up 3% compared to last year, and so far March is continuing the upward trend typical at this time of year.
But in spite of that total supply of homes for sale was down 19.4% compared to last year. You can see in the chart below how inventory is below that of recent years… and in fact is still below going back a dozen years, even well before the crash.
The problem, of course, is that buyers are making offers at a quicker pace than sellers are putting homes on the market and supply can't keep up with demand.
That is most evident when looking at the months supply of inventory and average days on the market before accepting an offer. Months supply of inventory has been hovering at about the same rock-bottom level for the last 3 months. This, of course, indicates a STRONG seller's market…
…and this strong seller's market means higher prices and higher percentage of list price received.
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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