Twin cities metro area market statistics for October released by the Minneapolis Area Association of Realtors show that while closed sales dropped a bit from September they were still ahead of last year. New listings resumed their downward trend, dominated by foreclosure properties.
What I find surprising is that in spite of the economic turbulence we experienced in October pending sales (purchase agreements accepted in October) were still higher than last year…down from the dramatic high number in September, but still higher than last year.
Housing inventory in the lower price ranges has increased dramatically due to the high number of foreclosure properties. The number of homes for sale under $120,000 increased by 83.9% over the past year…but sales in that segment increased by 195.3% during the same period! The feeding frenzy we are experiencing on these properties is exactly what we need to keep moving toward a healthy housing market.
A positive side of the current market is an increase in housing affordability, as dramatically illustrated in the chart below from the Minneapolis Area Association of Realtors tracking back to 2002.
Housing Affordability Index: estimate of housing affordability based on the price of the median sale price of an existing single-family home, median income, mortgage rates and assumptions concerning down payment, property taxes, and insurance.
Yesterday I attended an annual market review presentation by the broker/owner of our company, RE/MAX Results. He said there has never been a better time to buy since he started back in 1977. His opinion was that the low end has mostly bottomed out in areas not overly dominated by foreclosures, but he expects high end price drops aren't over yet. He offered three bits of advice for buyers and sellers in this market…
- If you can buy, do…
- If you don't have to sell, don't…
- If you can sell and buy, why not…
The figures above are for the combined 13-county Twin Cities metropolitan area. Click here for links to the full October combined area market report as well as local reports for 125 metro area communities.
