Fannie Mae is predicting that continued low rates and possibly lower rates are expected in 2020.
Listings, Sales, Prices: All Rise
November 19, 2019
The Twin Cities real estate market started the fourth quarter of 2019 on a strong note with buyer and seller activity rising in October compared to 2018. Buoyed by historically low interest rates, the number of new listings and pending sales rose last month and the median price of a home also increased.
New listings increased by 3.8 percent last month to nearly 6,300 properties on the market. Pending home sales increased 4.9 percent in October, continuing their steady rise since mortgage rates dipped below 4.0 percent in June. The increase also puts the number of pending sales in positive territory for the year. Continuing the market’s upward trend, the median price of a home in the Twin Cities rose to $280,000 in October, a 5.7 percent increase over last year.
October reversed a trend of rising days on market and continued September’s reversal of sellers accepting a slightly lower share of their list price compared to last year. With increased sales activity, quicker market times and sellers yielding strong offers, it’s no wonder more sellers decided to list. There are still some signs that the market is rebalancing, but buyers awaiting spooky news could see their patience tested based on October numbers.
While inventory has grown this year, supply remains tight for first-time buyers and downsizing households competing for homes under $350,000. At this price point, multiple offers and homes selling for over list price in record time is still common. Builders struggle to replenish inventory due to high costs, a labor shortage and regulatory constraints. The shortage of affordable homes has prompted many owners to stay put. With 2.3 months of supply, the Twin Cities market is still significantly undersupplied.
October 2019 by the Numbers (compared to a year ago)
- Sellers listed 6,258 properties on the market, a 3.8 percent increase from last October
- Buyers closed on 5,391 homes, a 1.3 percent increase
- Inventory levels decreased 5.8 percent from last October to 11,607 units
- Months Supply of Inventory was down 8.0 percent to 3 months
- The Median Sales Price rose 5.7 percent to $280,000
- Cumulative Days on Market declined 4.2 percent to 46 days, on average (median of 25)
- Changes in Sales activity varied by market segment
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- Single family sales rose 5.5 percent; condo sales increased 1.4 percent; townhome sales fell 0.5 percent
- Traditional sales increased 4.8 percent; foreclosure sales dropped 21.1 percent; short sales fell 55.6 percent
- Previously owned sales were up 4.4 percent; new construction sales climbed 2.6 percent
Quotables
“Interest rates are boosting buyer confidence,” said Todd Urbanski, President of Minneapolis Area REALTORS®. “Consumers may also be realizing that some of their fears around the market and economy could be overstated.”
“The latest figures show our key metrics returning to growth,” said Linda Rogers, President-Elect of Minneapolis Area REALTORS®. “We expect Minnesota and the Midwest to fare well should that change.”
From The Skinny Blog.
Weekly Market Report
For Week Ending November 9, 2019
With the stock market reaching record highs, continued low unemployment, and low mortgage rates, many signs in the US economy remain strong. However, total household debt has been rising for twenty-one consecutive quarters and is now $1.3 trillion higher than the previous peak of $12.68 trillion in 2008. While delinquency rates remain low across most debt types, including mortgages, higher consumer debt loads can limit future household spending capability and increase risk if the economy slows down.
In the Twin Cities region, for the week ending November 9:
- New Listings increased 6.3% to 1,094
- Pending Sales increased 1.6% to 992
- Inventory decreased 5.9% to 11,463
For the month of October:
- Median Sales Price increased 5.7% to $280,000
- Days on Market decreased 4.2% to 46
- Percent of Original List Price Received increased 0.1% to 98.1%
- Months Supply of Homes For Sale decreased 4.0% to 2.4
All comparisons are to 2018
Click here for the full Weekly Market Activity Report. From MAAR Market Data News.
Weekly Market Report
For Week Ending November 2, 2019
This week the Federal Reserve reduced its benchmark rate for the third time this year. This action was widely anticipated by the market and mortgage rates rose for the third consecutive week. Despite the recent rise, rates still remain approximately one percent lower than a year ago, which has a substantial effect on buying power. Also this week, a TransUnion analysis predicts a surge of additional first-time homebuyers will enter the market between 2020 and 2022, climbing from 7.6 million buyers in the 2016-2018 period to 8.3-9.2 million in the 2020-2022 period.
In the Twin Cities region, for the week ending November 2:
- New Listings increased 9.2% to 1,223
- Pending Sales increased 3.3% to 1,043
- Inventory decreased 5.5% to 11,917
For the month of September:
- Median Sales Price increased 6.8% to $279,900
- Days on Market increased 2.4% to 43
- Percent of Original List Price Received increased 0.1% to 98.5%
- Months Supply of Homes For Sale decreased 3.7% to 2.6
All comparisons are to 2018
Click here for the full Weekly Market Activity Report. From MAAR Market Data News.
This week the National Association of REALTORS® reported that nationally, August existing-home sales rose 2.6% from a year ago. Additionally, the Federal Reserve announced a rate cut for the second time in seven weeks, though this was widely expected and largely factored into mortgage rates already. A strong economy along with mortgage rates near their lows for the year continue to support healthy housing demand.
In the Twin Cities region, for the week ending September 21:
- New Listings increased 7.6% to 1,676
- Pending Sales decreased 2.4% to 1,158
- Inventory decreased 4.4% to 12,628
For the month of August:
- Median Sales Price increased 6.9% to $286,500
- Days on Market increased 2.5% to 41
- Percent of Original List Price Received decreased 0.2% to 99.0%
- Months Supply of Homes For Sale remained flat at 2.6
All comparisons are to 2018
Click here for the full Weekly Market Activity Report. From MAAR Market Data News.
August Monthly Skinny Video
“There’s a lot of interest in the housing market and how a changing economy affects one’s position within it.”
Weekly Market Report
With kids back in school and the weather beginning to cool, the housing market begins its annual cooldown as well. With buyer and seller activity remaining strong, it will be at a little more relaxed pace than during the late spring and summer. While Halloween decorations may be adorning stores and soon adorn the stoops of homes around the country, the real estate market this fall is looking far from scary.
In the Twin Cities region, for the week ending September 14:
- New Listings decreased 1.3% to 1,820
- Pending Sales decreased 7.8% to 1,144
- Inventory decreased 4.8% to 12,423
For the month of August:
- Median Sales Price increased 6.7% to $286,000
- Days on Market increased 2.5% to 41
- Percent of Original List Price Received decreased 0.2% to 99.0%
- Months Supply of Homes For Sale decreased 3.8% to 2.5
All comparisons are to 2018
Click here for the full Weekly Market Activity Report. From MAAR Market Data News.
Things still feeling pretty stable out there, thanks for asking
September 18, 2019
With two-thirds of the year in the books, we’re getting a clearer picture of where the housing market stands. The latest numbers for Twin Cities residential real estate show stability along with signs of deceleration. The median sales price continued to rise, landing at $286,800 for the month. Pending sales—a measure of signed contracts and future demand—rose 3.2 percent but are down slightly for the year so far. New listings slipped 2.0 percent, thwarting some buyers’ hopes of taking advantage of historically low rates. Closed sales were down 0.9 percent for the month and are down 1.4 percent for the year. One sign of market shift is days on market, which rose 2.5 percent year-over-year. Market times remain swift, but that’s the fourth year-over-year increase this year. Another sign of a changing market is the ratio of sold to list price. Sellers have been accepting a slightly lower share of their list price compared to the year prior for seven of the last eight months. This, along with other indicators, suggests the market is rebalancing. The landscape seems to be improving for buyers, even though sellers still have strong pricing power, favorable negotiating leverage and quick market times.
The number of active listings for sale has been rising this year. Even so, the market remains tight—particularly for first-time buyers and downsizers competing in the sub-$300,000 segment where multiple offers and homes selling for over list price are commonplace. With just 2.5 months of supply, the Twin Cities is still significantly undersupplied. The move-up and upper-bracket segments are less competitive and better supplied. Given some of the recent economic uncertainty, it’s worth noting that the Twin Cities market is well-positioned to withstand an economic downturn.
August 2019 by the Numbers (compared to a year ago)
Sellers listed 7,678 properties on the market, a 2.0 percent decrease from last August
Buyers closed on 6,646 homes, a 0.9 percent decrease
Inventory levels decreased 5.5 percent from last August to 12,238 units
Months Supply of Inventory was down 3.8 percent to 2.5 months
The Median Sales Price rose 7.0 percent to $286,800, a record high for August
Cumulative Days on Market rose 2.5 percent to 41 days, on average (median of 21)
Changes in Sales activity varied by market segment
Single family sales rose 1.4 percent; condo sales decreased 6.2 percent; townhome sales fell 7.8 percent
Traditional sales increased 0.1 percent; foreclosure sales dropped 40.9 percent; short sales fell 45.5 percent
Previously owned sales were down 0.1 percent; new construction sales declined 5.0 percent
Quotables
“Some think the fall market isn’t for them, but tight conditions and favorable rates suggest momentum moving into 2020,” said Todd Urbanski, President of Minneapolis Area REALTORS®. “We’re at a moment when sellers are enjoying their position while buyers are taking advantage of lower than expected interest rates and more options.”
“Most markets remain stable across the metro,” said Linda Rogers, President-Elect of Minneapolis Area REALTORS®. “While there is a good amount of local variation, we just don’t see that many signs for concern.”
From The Skinny Blog.
Weekly Market Report
The White House has released a plan to broadly overhaul the housing finance system, including the re-privatization of Fannie Mae and Freddie Mac and reforms to federal agencies involved with financing substantial portions of the mortgages made every year. These changes will affect the cost and availability of loans in the future. Many recommendations will require legislative approval, so it is unclear at this time how much of the plan may eventually be implemented and its ultimate impact on the housing market.
In the Twin Cities region, for the week ending September 7:
- New Listings decreased 3.8% to 1,691
- Pending Sales increased 5.3% to 1,113
- Inventory decreased 4.5% to 12,224
For the month of August:
- Median Sales Price increased 6.7% to $286,000
- Days on Market increased 2.5% to 41
- Percent of Original List Price Received decreased 0.2% to 99.0%
- Months Supply of Homes For Sale decreased 3.8% to 2.5
All comparisons are to 2018
Click here for the full Weekly Market Activity Report. From MAAR Market Data News.
Weekly Market Report
Recent mortgage rate declines may provide a small tailwind as we enter the fall housing market, giving buyers a bit more buying power and a little more incentive to lock in a home purchase. However, stock market volatility and concern of a wider economic slowdown in the coming year may temper some buyer enthusiasm. But as rents continue to rise, the value proposition of owning a home remains a compelling option and a goal of most Americans.
In the Twin Cities region, for the week ending August 31:
- New Listings increased 4.9% to 1,359
- Pending Sales decreased 3.1% to 1,250
- Inventory decreased 4.4% to 12,498
For the month of July:
- Median Sales Price increased 5.9% to $283,900
- Days on Market remained flat at 38
- Percent of Original List Price Received decreased 0.1% to 99.7%
- Months Supply of Homes For Sale remained flat at 2.5
All comparisons are to 2018
Click here for the full Weekly Market Activity Report. From MAAR Market Data News.