The number of closed sales in August declined from July as is typical, but the number was still higher than either of the last two years….and pending sales, which become future closed sales, were ahead of the previous year for the 14th consecutive month.
It will be interesting to see what happens the next few months. Last year September showed an abnormal upward 'blip' as 100% financing went away at the end of the month. We could see something similar this year as the $8,000 tax credit goes away the end of November.
Although new listings declined again in August, it wasn't far below last year at this time. For the most recent reporting week, the number of brand new listings coming on the market was higher than a year ago for the first time in 9 months. This is due in part to more traditional, non-lender mediated listings coming on the market again…up more than 20% compared to the same time last year.
Total homes on the market dipped down a bit. I know my buyers can feel it. They no longer have the luxury of looking at a seemingly endless supply of homes and lingering over making a decision. Once they find a home they want to purchase, they are moving more quickly to avoid losing it to another buyer…hopefully before getting into multiple offers.
There continues to be a significant difference in both sales and supply by price range. It is now an extreme seller's market in price ranges under $120,000. August showed a 3.1 month supply, but the last weekly report was even lower…with only 2.3 months of supply available. The days of an over-abundance of cheap housing appear to be disappearing.
Median sale price ticked up again in August…growing from $153,000 in April to $175,000 in August.
The months supply of homes available is still distinctly different by property type, with houses continuing to get closer to a balanced market (considered to be a 5-6 month supply).
I added another chart this month to illustrate how the differences by property type have changed in the last few years. You can see how the months supply of houses, townhomes and condos was virtually the same at this time in 2006…and have spread apart over the last couple years.
While this likely shows a preference for houses as prices have come down, and 2007 may have reflected an over-abundance of new condos…it may also partly reflect the changes in financing available for different property types starting in 2008. In 2006, 100% financing was readily available for all property types. As that changed in 2008, FHA financing (now with a minimum 3.5% down payment) has become the financing of choice for many first-time homebuyers…and 0% down VA financing is also being used more frequently. But many CIC complexes (condos and some townhomes) are not approved for VA or FHA financing…and with conventional financing frequently requiring a minimum 10% down payment for condos the last couple of years, condos have not been as attractive a choice for many homebuyers.
The figures above are based on statistics for the combined 13-county Twin Cities metropolitan area released by the Minneapolis Area Association of Realtors. Click here for links to local reports for 125 metro area communities.
Sharlene Hensrud, RE/MAX Results - Email – Minneapolis – St. Paul Real Estate Market Info
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