The trend of declining new listings and increasing sales is continuing, according to the market statistics for August released by the Minneapolis Area Association of Realtors (MAAR). Note how this year’s new listings ‘line’ is noticeably below last year and sales are edging up almost to last year’s levels.
It is interesting to see the ‘line’ for housing inventory crossing over and dropping below last year’s inventory levels. We are seeing fewer homes on the market, what we have been needing to help balance the market. (Click on the charts to enlarge.)
August pending sales, which dropped year-over-year the last two years, showed an increase for the second month in a row…and only the third time in the last 39 months. Some of the impetus for this increase may have come from the demise of down payment assistance programs such as Nehemiah, which goes away October 1st and needed a purchase agreement by the end of August. It will be interesting to see what happens in September when this incentive is gone.
Home prices dropped a bit again in August, indicating we are probably still bumping along the bottom…we’ll have to wait to see if it keeps bumping up and down or settles into a new trend. Some investors have designated the metro area as a declining market again based on 2nd quarter data…meaning that they require a 5% higher down payment for conventional financing. In other words, if 3% was required before, an 8% down payment is now required. It doesn’t affect FHA financing. Hopefully the third quarter we are just finishing will reverse it again.
This data is for the combined 13-county Minneapolis-St. Paul metropolitan area, but market conditions can vary greatly from community to comunity. Click here for links to full reports for the combined metro and 125 different Twin Cities communities.
