We are in a strong seller's market again, but this time it's not the same as the seller's market before the infamous downturn. Here are some things that are different this time…
1. Inventory is lower – the number of homes available for sale is lower than it was even as far back as 2004; the traditional 'hump' indicating the typical increase in inventory peaking in summer months is also missing
2. Prices are lower – prices are lower this time, but are increasing fueled by demand and tempered by appraisals
3. Interest rates are lower – interest rates have been at historically low levels for longer than anyone expected but are starting to rise again, making buyers anxious to buy sooner rather than later
4. Properties are selling faster – days on market before sale has dropped dramatically, to the delight of sellers and frustration of buyers; a major difference from the seller's market before the fall is today's notification of new and changed listings available ASAP… new listings sometimes sell in hours!
5. Affordability index is higher – last time prices and interest rates pushed affordability down; this time the housing afforadability index is high, but is starting to drop due to rising prices and interest rates
6. Buyers are more discerning – this time around buyers are more cautious than they were 10 years ago… this time they are choosing a home and location where they plan to stay for the next 5-10-20 years… this time they are more concerned about price… this time they have been trained to expect homes to be well staged and in good condition… or expect a LOW price
Charts above from the Minneapolis Area Association of Realtors, based on data from NorthstarMLS.
Sharlene Hensrud, RE/MAX Results – Email – Twin Cities Real Estate Market
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