The biggest driver of our real estate market continues to be the supply of homes for sale, further exacerbated by sellers holding back on listing their homes for sale for fear of having their home sell quickly and not finding a suitable replacement. This reminds me of the high foreclosure days when traditional sellers listed their homes for sale because of a need to move rather than a desire for a change. The difference is that foreclosed homes no longer make up the difference, as 95.4% of sales are traditional homes.
Wondering if homes in your price range are in demand? Months supply of homes for sale gives a good indication of how quickly homes are selling. A 5-6 month supply is considered a balanced market.
- Houses in price ranges below $250,000 all have a supply of less than 3 months, which is a strong seller's market and results in quick sales for homes priced right and in good condition
- Although the shortage isn't quite as strong in the $350k-$500k price range, at 4.4 months it is still a seller's market… in fact, this is the price range with the highest gain in sales as many buyers moved up after selling their lower priced home
- This is a great time for buyers moving up to the price range over $500k, where it is a buyer's market… sellers in this price range already know this as they wonder why their homes aren't selling as quickly as the news seems to indicate they should
The price range that tended to sell the slowest was prices over $1M… prices that tended to sell the quickest was the $190k-$250k price range.
Pending sales are dropping as new listings drop… sales are driven by the supply of homes to buy.
Closed sales dropped 5.8% behind last year in July as inventory dropped even more to 18.1% below last year.
The most significant drop was in months supply of inventory, which indicates how quickly homes are selling. It was down 23.7% from last year to 2.9 months metro-wide. The silver lining is the low inventory continues to drive up prices… also affected by increased sales in the $350k-$500k price range. Average sale price was 98.4% of list price in July 2016.
The figures and charts above are 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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