If you are searching for a property to buy and it seems like there aren't as many choices as there used to be you are correct. When measured by the number of properties being sold relative to the number of homes on the market the supply at the end of last month was the lowest it has been in September since 2005.
This means it would take 6.8 months to sell the current inventory at the current rate of sales… very close to what is considered the ideal balance of 5-6 months. This is the average for the entire metro area. Because all real estate is local, the months supply gets higher or lower when broken down by county… with Hennepin and Anoka Counties at a balanced market level!
- Hennepin County – 5.3 months
- Anoka County – 5.7 months
- Dakota County – 6.2 months
- Ramsey County – 6.8 months
- Washington County – 7.7 months
- Carver County – 9.7 months
- Scott County – 10 months
When broken down by traditional vs. foreclosure vs. short sales, there is an even bigger difference.
Short sales are in largest supply metrowide at 13.8 months… a big reason because they typically take 4-6 months to close after getting an offer. Average sale price for short sales last month was 83.3% of list price.
Foreclosures and traditional sales both sold at about 92% of list price, but the low price of lender-owned foreclosures made them in high demand in spite of their often challenged condition, especially for investors. There was only a 2.1 month supply of foreclosures at the end of September.
Investors typically purchase about 70% of all foreclosures, but under the First Look period initiated about two years ago only buyers who plan to live in the home are eligible to purchase during the first 15 days on the market.
The percentage of total sales by type has remained amazingly constant comparing September year-over-year… with 2011 traditional sales commanding 60.3% of the market, foreclosures 28.4% and short sales 11.3%.
Expect the percentage of lender-owned sales to increase during the winter months, when traditional sellers are often looking for someplace warm and/or busy preparing to sell in the spring.
Sharlene Hensrud, RE/MAX Results – Minneapolis – St. Paul Buyer's Agent
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