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Weekly Market Report
For Week Ending January 14, 2017
In winter, it is not uncommon for housing starts to tail off, but 2016 closed on an uptick and became the best year for housing starts since 2007. Granted, multifamily homes have been driving the increase in recent years, while single-family starts and building permits are mildly down. Yet there is warranted optimism for new single- family home building in 2017.
In the Twin Cities region, for the week ending January 14:
- New Listings decreased 4.8% to 931
- Pending Sales decreased 7.0% to 622
- Inventory decreased 25.6% to 8,347
For the month of December:
- Median Sales Price increased 4.1% to $228,500
- Days on Market decreased 10.1% to 71
- Percent of Original List Price Received increased 0.6% to 96.0%
- Months Supply of Inventory decreased 26.1% to 1.7
All comparisons are to 2016
Click here for the full Weekly Market Activity Report. From The Skinny Blog.
2016 Annual Wrap-Up: Home Prices Reach Record High and Home Sales Reach 11-year High
The big story of 2016 was twofold: the median sales price reached an all-time high; while closed sales reached an 11-year high. Closed sales nearly broke their all-time record, but fell 0.3 percent short of their all-time 2004 high. Seller activity declined 1.1 percent. Near-record sales activity combined with flat-to-weaker seller activity created a supply shortage. Active housing supply levels fell to a 14-year low. This shortage has created a competitive environment where multiple offers have become more common. Sellers are receiving strong offers in record time, but this fast-paced market can frustrate some consumers. Days on market fell to a 10-year low. Absorption rates fell to 1.6 months of supply at year-end, a record low. Foreclosure activity fell for a fifth straight year and is back below 2007 levels. Although single-family homes made up about 75.0 percent of all sales, both townhomes and condos showed a stronger increase in sales. Similarly, previously-owned homes made up about 93.0 percent of sales but new construction showed a much stronger increase.
2016 by the Numbers
Sellers listed 76,531 properties on the market, a 1.1 percent decrease from 2015
Buyers closed on 59,988 homes, a 6.2 percent increase from 2015 and the highest figure since 2005
Inventory levels for December fell 26.3 percent to 8,197 units compared to 11,125 in 2015—a 14-year low
Months Supply of Inventory was down 30.4 percent to 1.6 months, also a 14-year low
The Median Sales Price rose 5.5 percent to $232,000, which is an all-time record high
Cumulative Days on Market declined 15.8 percent to 64 days, on average (median of 33)—a 10-year record low
Changes in sales activity varied dramatically by market segment
- Single-family sales rose 5.1 percent; condo sales rose 9.5 percent; townhome sales rose 9.9 percent
- Traditional sales rose 10.0 percent; foreclosure sales fell 25.0 percent; short sales fell 31.1 percent
- Previously-owned sales rose 5.7 percent; new construction sales rose 14.9 percent
Poignant Quotables
“The most important achievement of 2016 was erasing the losses in prices and equity caused by the downturn. As sales surpassed their 10-year high, Twin Citizens demonstrated that they are just as committed to homeownership as ever. There are some manageable challenges, but a favorable affordability picture, attractive rates, job growth and wage growth will continue to sustain a healthy real estate market,” said Cotty Lowry, President of the Minneapolis Area Association of REALTORS®.
“We reached some key milestones last year, and hope to continue with this momentum in 2017. It is a great time for those considering listing their home, as buyers are looking for more options. With median sales price at an all-time high, now is a great time to find out the current value of your home,” said Tina Angell, President of the St. Paul Area Association of REALTORS®.
From The Skinny Blog.
Weekly Market Report
For Week Ending January 7, 2017
If predictions hold true – a continuing inventory crunch, moderate price gains, higher mortgage rates – 2017 will likely be in favor of the seller. On the other end of the spectrum, deals may be harder to come by if the largest potential group of buyers, the millennials, do not start wading into the buying pool with more fervor.
In the Twin Cities region, for the week ending January 7:
- New Listings decreased 15.1% to 969
- Pending Sales decreased 21.1% to 555
- Inventory decreased 25.5% to 8,298
For the month of December:
- Median Sales Price increased 4.1% to $228,500
- Days on Market decreased 10.1% to 71
- Percent of Original List Price Received increased 0.6% to 96.0%
- Months Supply of Inventory decreased 26.1% to 1.7
All comparisons are to 2016
Click here for the full Weekly Market Activity Report. From The Skinny Blog.
Weekly Market Report
For Week Ending December 31, 2016
At the outset of 2017, we are watching for upward movement in some of the same areas that we were watching in 2016. Inventory remains a key metric, as continued decreases may push out potential buyers, especially if mortgage rates continue to increase. However, buying a home is still considered more affordable than renting in two-thirds of the country according to the 2017 Rental Affordability Report by ATTOM Data Solutions.
In the Twin Cities region, for the week ending December 31:
- New Listings decreased 7.5% to 384
- Pending Sales decreased 14.9% to 474
- Inventory decreased 24.9% to 9,049
For the month of December:
- Median Sales Price increased 4.1% to $228,500
- Days on Market decreased 10.1% to 71
- Percent of Original List Price Received increased 0.6% to 96.0%
- Months Supply of Inventory decreased 30.4% to 1.6
All comparisons are to 2015
Click here for the full Weekly Market Activity Report. From The Skinny Blog.
Weekly Market Report
For Week Ending December 24, 2016
As we look toward 2017, the entirety of the U.S. housing market has never been worth as much as it is right now. Housing stock value grew to $29.6 trillion in 2016, regaining all of the value that was lost during the last recession. An upward trend in mortgage rates, mortgage credit and new construction are all common predictions for 2017.
In the Twin Cities region, for the week ending December 24:
- New Listings increased 32.5% to 359
- Pending Sales increased 28.1% to 606
- Inventory decreased 23.9% to 9,469
For the month of November:
- Median Sales Price increased 5.5% to $231,400
- Days on Market decreased 15.1% to 62
- Percent of Original List Price Received increased 0.8% to 96.7%
- Months Supply of Inventory decreased 24.1% to 2.2
All comparisons are to 2015
Click here for the full Weekly Market Activity Report. From The Skinny Blog.
Weekly Market Report
For Week Ending December 17, 2016
As we begin our final descent into 2017, the total value of the housing market has hit its highest point since the early 2000s. With mortgage rates on the rise and prices still increasing in most categories and locations, lower affordability could lead to less demand. However, most real estate professionals remain optimistic about the market and excited for the year ahead.
In the Twin Cities region, for the week ending December 17:
- New Listings decreased 4.1% to 578
- Pending Sales decreased 11.3% to 706
- Inventory decreased 23.5% to 9,978
For the month of November:
- Median Sales Price increased 5.5% to $231,325
- Days on Market decreased 15.1% to 62
- Percent of Original List Price Received increased 0.7% to 96.6%
- Months Supply of Inventory decreased 24.1% to 2.2
All comparisons are to 2015
Click here for the full Weekly Market Activity Report. From The Skinny Blog.
December Monthly Skinny Video
Weekly Market Report
For Week Ending December 10, 2016
Housing starts have fallen from last month’s nine-year high, but the onset of the winter season has to be a strong consideration for the reason behind the month- over-month slowdown. The fact remains that homebuilder confidence has reached its highest point in more than ten years, and the housing market is rounding out the year in a rather solid position.
In the Twin Cities region, for the week ending December 10:
- New Listings increased 1.5% to 725
- Pending Sales increased at 745
- Inventory decreased 22.1% to 10,422
For the month of November:
- Median Sales Price increased 5.5% to $231,400
- Days on Market decreased 15.1% to 62
- Percent of Original List Price Received increased 0.8% to 96.7%
- Months Supply of Inventory decreased 24.1% to 2.2
All comparisons are to 2015
Click here for the full Weekly Market Activity Report. From The Skinny Blog.
Eager buyers, tepid sellers and an imminent December rate hike
As Twin Citizens hunker down for winter, home buyers haven’t requested any time off this holiday season. Pending home sales rose 9.0 percent compared to last November and are at their highest level for any November since 2004. Closed sales likely reflect a sense of haste, as buyers closed on a whopping 25.2 percent more homes this November than last year. That represents the largest year-over-year increase in closed sales since February 2012, when closings increased 28.2 percent. Partly due to our lovely November weather, buyer activity this year fell much less from October to November than in past years.
Sellers were decidedly less optimistic about moving. Only 3,743 for-sale properties were listed on the market last month, 1.1 percent fewer than last November. Although home prices have reached their seasonal peak for the year, the median sales price increased 5.8 percent from last year to $232,000—uncharacteristically surpassing the $230,000 median price during September and October of 2016. Inventory levels dropped 22.8 percent to 10,706 active properties, which is nearing a 14-year record low. Additional listings are needed to address the current supply shortage—especially at the entry-level and first-time buyer price brackets.
Competing bids on attractive listings are common in low inventory environments, and homes tend to sell quickly for close to list price. Days on market until sale fell 16.4 percent to 61 days compared to 64 for the year so far. The average percent of original list price received at sale was 96.7 percent, 0.8 percent higher than last year. But the median percent of current list price received is 99.4 percent. Months supply of inventory fell 27.6 percent to 2.1 months—the lowest figure on record for any month since 2003. This indicator measures the balance between supply and demand in the marketplace. Generally, five to six months of supply is considered a balanced market.
“Strong buyer demand is still driving this market in a great big way,” said Judy Shields, Minneapolis Area Association of REALTORS® (MAAR) President. “While it’s not unheard of for pending sales to surpass new listings in a winter month, it is relatively uncommon.”
While single family sales dominate the Twin Cities market by number, townhome sales showed the largest year-over-year sales increase followed by condos. Similarly, though previously-owned properties make up the largest share of sales, newly constructed properties had three times the year-over-year increase. The most active price range over the last 12 months is $190,000 to $250,000 but the largest gain in sales occurred in the $350,000 to $500,000 range.
A healthy Twin Cities labor market has been conducive to housing recovery. The most recent national unemployment rate is 4.6 percent, though it’s 3.1 percent locally. The Minneapolis–St. Paul metropolitan area has the fourth lowest unemployment rate of any major metro area.
The average 30-year fixed mortgage rate has risen to 4.13 percent, still well below a long-term average of about 8.0 percent. Marginally higher rates were widely expected in 2016, but the Federal Reserve hasn’t moved rates since last December. While “Fedspeak” is notoriously ambiguous, Chair Yellen recently gave markets an unusual amount of clarity regarding Fed policy. Expect a quarter or half point increase in the federal funds rate at their December meeting.
“Buyers are feeling the pressure to some degree but still remain sensible,” said Cotty Lowry, MAAR President-Elect. “Despite some interest rate risk and policy uncertainties moving forward, overall 2017 is expected to be another good year for housing.”
From The Skinny Blog.
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