November market statistics released this week by the Minneapolis Area Association of Realtors (MAAR) show that after two months of closed sales above last year, November sales inched down a bit…but are still only 1.6% or 41 sales below last year. Average sale price continues consistently below last year and virtually unchanged from last month, down only $305 or 1.2% from October to $221,826 in November. Illustrating that housing inventory is as predictable as temperatures heading down for the winter, the number of homes for sale is eerily hovering below previous years on the same downward slope as we head into winter season.
Last month I talked about the increase in the Housing Affordability Index (factoring together price, mortgage rates, median income). Last month's increase pales in comparison to this month! Due to declines in mortgage rates and continued low prices it took a huge spike this month to 180, bringing it to the highest level since MAAR started tracking it in 1990.
Mortgage rates haven't been this low in nearly 5 years, and buyers seem to be taking notice of the good buying conditions…pending sales are higher than last year for the third month in a row. Another key factor in the housing affordability spike is the increase in lower priced homes for sale…with housing priced under $150,000 currently accounting for nearly 25% of total inventory, up from 8.9% in December 2006 and 14.5% in 2007.
Strong price differences between lender-mediated and traditional owner-occupied properties have led to two distinctly different market segments, each commanding about half of current market activity.
The figures above are for the combined 13-county Twin Cities metropolitan area. Click here for links to the full November combined market report as well as local reports for 125 metro area communities.
