New listings finally were ahead of the same month the previous year in April, and in May were the highest they had been since 2010 at the end of the federal homebuyer tax credit. The difference this time is the increase is due to 'normal' factors, not an outside stimulus that goes away.
The increase in new listings also means the total homes for sale is finally creeping ahead of last year.
This is a good thing, and what is needed to help lagging pending sales… there simply hasn't been enough inventory for buyers to find the homes they want to buy. Buyers are more discerning than before the crash, when they bought almost anything just to get in the market. Most of today's buyers aren't willing to buy until they find a home they plan to live in for the next 5-10 years or longer.
Prices continue to improve with May median sale price at $210,000, but prices still haven't reached levels before the crash. I divided the historical median sales chart below into three sections… the Bubble, when prices were high… the Bust, when prices crashed… and the Recovery, where we are now. Prices are getting higher each year rather than dropping each year as they did in the Bust, but are still not at the levels where they were in the Bubble. This is likely a good thing, because we learned those high prices were not sustainable.
The biggest sign of recovery is the high percentage of traditional buyers and sellers back in the marketplace. As the percent of foreclosure listings diminishes and prices increase, the percent of investors also diminishes… opening the door for traditional buyers and sellers moving for personal reasons like simply outgrowing their homes.
I think the chart of traditional, lender-owned and short sales below from the Minneapolis Area Association of Realtors perhaps illustrates more clearly than anything how our market continues to return to normal.
The figures above are based on statistics for the combined 13-county Twin Cities metropolitan area released by the Minneapolis Area Association of Realtors.
Never forget that all real estate is local and what is happening in your neighborhood may be very different from the overall metro area.
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Sharlene Hensrud, RE/MAX Results – Email – Minneapolis – St. Paul Real Estate Market
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