In my December 2015 update I reported that the supply of inventory had bottomed out. Well, this year's supply is even lower. It bottomed out 26.3% below last year!
Because of strong sales months supply of inventory was even lower… 30.4% below last year, with only a 1.6 months supply. That means that if inventory froze and sales continued at the same rate it would take only 1.6 months for all the inventory to be sold to eager buyers!
New listings were 8.2% behind last December… pending sales 6.5% behind last year, likely because buyers can't find homes to buy.
Sellers, this means buyers want your home!
December 2016 closed sales were were 2.6% ahead of December 2015 closed sales, while inventory dropped 26.3% below last year. As you can see below, sales have been consistently higher than last year all year while inventory has been significantly lower.
No wonder the months supply of inventory is the lowest on record, only 1.6 months! It should also come as no surprise that median sale price has been floating above last year due to the laws of supply and demand.
Optimism is the overwhelming feeling for the real estate market in 2017. Unemployment is low, wages have improved, and even though mortgage rates have increased to the low 4% range that is still historically very low. The biggest challenge is high competition for few properties. Hopefully more sellers will join the market this year.
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.