Nita Morlock

Supply tight but flattening, prices still rising, sales fluctuating

By David Arbit on Friday, November 16th, 2018

As sentiments regarding the direction of housing markets have changed, it’s worth remembering two key facts. First, all housing is local—what’s happening in San Francisco, Seattle and Denver is not reflective of the Minneapolis-St. Paul market. Second, the housing market faces fewer risks than in the mid-2000s. After years of strong buyer activity and weak seller activity, the tides seem to finally be shifting. Five of the last six months showed increases in new listings; while five of the last six months also had decreases in pending sales. It’s worth noting there’s a significant difference between deceleration and contraction. The market is decelerating, but not yet contracting. Prices continue to rise, homes are selling in less time and sellers are yielding a higher share of their list price.

Excluding September 2018, October had the smallest decline in active listings since May 2015, and those long-awaited inventory gains could arrive as early as next year. Months supply was stable at 2.4 months, suggesting a tight market but also a flattening out pattern. Rising rates could impact some budget-conscious buyers. The lack of supply is especially noticeable at the entry-level prices, where multiple offers and homes selling for over list price are commonplace. The move-up and upper-bracket segments are less competitive and—for the most part—much better supplied. Inventory could double while sales remain stable and we’d still have less than 5 months of supply.

OCTOBER 2018 BY THE NUMBERS (COMPARED TO A YEAR AGO)

– Sellers listed 6,011 properties on the market, a 9.2 percent increase
– Buyers closed on 5,235 homes, a 3.4 percent increase from last October
– Inventory levels for October fell 2.2 percent compared to 2017 to 11,719 units
– Months Supply of Inventory was flat at 2.4 months
– The Median Sales Price rose 8.6 percent to $265,000, a record high for September
– Cumulative Days on Market declined 7.7 percent to 48 days, on average (median of 28)
– Changes in Sales activity varied by market segment:

Single family sales rose 4.4 percent; condo sales jumped 10.6 percent; townhome sales were flat
Traditional sales rose 5.2 percent; foreclosure sales sank 41.2 percent; short sales rose 4.5 percent
Previously-owned sales were up 3.7 percent; new construction sales increased 12.3 percent
From The Skinny Blog.

Weekly Market Report

For Week Ending November 3, 2018

According to Freddie Mac, the 30-year fixed rate is at its highest average in seven years, reaching 4.94 percent. Last year at this time, the average rate was 3.90 percent. The higher rates are causing a slowdown in home price growth in some markets, but not all markets yet. Keeping a positive perspective, average rates were 5.97 percent ten years ago at this time, 6.78 percent 20 years ago and 10.39 percent 30 years ago. For maximum comparative impact, consider the 17.21 percent average rate of November 1981.

In the Twin Cities region, for the week ending November 3:

New Listings increased 9.7% to 1,115
Pending Sales decreased 16.5% to 943
Inventory decreased 1.1% to 12,095

For the month of September:

Median Sales Price increased 6.1% to $262,000
Days on Market decreased 16.0% to 42
Percent of Original List Price Received increased 0.3% to 98.4%
Months Supply of Inventory remained flat at 2.6

All comparisons are to 2017

Click here for the full Weekly Market Activity Report. From The Skinny Blog.

Weekly Market Report

For Week Ending October 27, 2018

Real estate professionals from around the globe recently gathered in Boston to network, teach, learn and share at the National Association of REALTORS® Conference and Expo. It is an annual tradition that has been going strong since 1908. An organized real estate industry is a healthy one that can have a positive effect on real estate transactions and beyond. The relative market balance being experienced across the nation can’t entirely be attributed to REALTOR® cooperation, but it certainly doesn’t hurt.

In the Twin Cities region, for the week ending October 27:

New Listings increased 15.0% to 1,239
Pending Sales decreased 9.1% to 941
Inventory decreased 1.4% to 12,374

For the month of September:

Median Sales Price increased 6.1% to $262,000
Days on Market decreased 16.0% to 42
Percent of Original List Price Received increased 0.3% to 98.4%
Months Supply of Inventory remained flat at 2.6

All comparisons are to 2017

Click here for the full Weekly Market Activity Report. From The Skinny Blog.

Weekly Market Report

For Week Ending October 20, 2018

In general, the country is experiencing a balanced real estate market in one form or another, depending on geographic location. While it is true that median sales prices are relatively high in terms of housing affordability for the standard household wage, metrics such as new listings, pending sales and inventory are all fairly level with year-ago levels in much of the nation. At a time of stock market volatility, political uncertainty and rising interest rates, this is very welcome news.

In the Twin Cities region, for the week ending October 20:

New Listings increased 4.3% to 1,387
Pending Sales decreased 5.6% to 1,021
Inventory decreased 2.3% to 12,397

For the month of September:

Median Sales Price increased 6.1% to $262,000
Days on Market decreased 16.0% to 42
Percent of Original List Price Received increased 0.3% to 98.4%
Months Supply of Inventory remained flat at 2.6

All comparisons are to 2017

Click here for the full Weekly Market Activity Report. From The Skinny Blog.

September Monthly Skinny Video

“Sales may very well be up next month as the market continues to search for sales balance.”

Weekly Market Report

For Week Ending October 13, 2018

It is that rare two-week window when not only politicians battle each other in order to convince voters who is best, but when professional football, baseball, hockey and basketball teams are battling for dominance in their respective sports. Competition is in the air, and yet the bulk of residential real estate markets across the country continue to enjoy a fair and balanced playing field. Even inventory, which has been down for years, is not looking so far from year-ago levels.

In the Twin Cities region, for the week ending October 13:

New Listings increased 1.6% to 1,389
Pending Sales decreased 1.6% to 1,064
Inventory decreased 2.9% to 12,494

For the month of September:

Median Sales Price increased 6.1% to $262,000
Days on Market decreased 16.0% to 42
Percent of Original List Price Received increased 0.3% to 98.4%
Months Supply of Inventory remained flat at 2.6

All comparisons are to 2017

Click here for the full Weekly Market Activity Report. From The Skinny Blog.

More Early Signs of Shifting Market Tides

By David Arbit on Wednesday, October 17th, 2018

After years of strong buyer activity and weak seller activity, the market tides seem to finally be shifting back toward balance. Strong demand and weak supply have created an environment that favors sellers. But if anything can be called a constant in the market—it’s change. Four of the last five months showed increases in new listings; while four of the last five months also had decreases in pending sales.

While the market hasn’t quite transformed, the dynamics are shifting and the market is transitioning. September saw the smallest decline in active listings since May 2015, and those long-awaited inventory gains could still happen this year. Months supply was down just 3.8 percent to 2.5 months. Today’s buyers still face plenty of competition over limited supply. However, a recent uptick in rates could further impact some budget-conscious buyers. Locking in at current levels would be advantageous in a rising rate environment.Sellers yielded an average of 98.4 percent of their original list price and 99.7 percent of their current list price, partly illustrating that the shortage still looms. The lack of supply is especially noticeable at the entry-level prices, where multiple offers and homes selling for over list price have become commonplace. The move-up and upper-bracket segments are less competitive and—for the most part—much better supplied. It’s noteworthy that inventory levels could double while sales remain stable and we’d still have less than 5 months of supply.

September 2018 by the Numbers (compared to a year ago)• Sellers listed 6,857 properties on the market, a 5.9 percent increase
• Buyers closed on 5,087 homes, a 5.8 percent decrease from last September
• Inventory levels for September fell 4.4 percent compared to 2017 to 12,570 units
• Months Supply of Inventory was down 3.8 percent to 2.5 months
• The Median Sales Price rose 6.1 percent to $262,000, a record high for September
• Cumulative Days on Market declined 16.0 percent to 42 days, on average (median of 24)
• Changes in Sales activity varied by market segment

• Single family sales fell 6.3 percent; condo sales declined 1.1 percent; townhome sales rose 0.4 percent
• Traditional sales fell 4.0 percent; foreclosure sales sank 41.1 percent; short sales dropped 25.0 percent
• Previously-owned sales were down 5.9 percent; new construction sales increased 11.5 percent

From The Skinny Blog.

Weekly Market Report

For Week Ending October 6, 2018

Residential real estate continues to churn out impressive numbers as we reach deeper into autumn. In many markets, new listings and/or pending sales are still outperforming the results from this same time last year. When the economy is strong, buyers and sellers will remain active beyond the more traditional selling season. Predictions for a slowdown are rolling in, but we’re not there yet. Let’s take a look at what’s happening locally.

In the Twin Cities region, for the week ending October 6:

New Listings increased 11.0% to 1,554
Pending Sales decreased 1.3% to 1,121
Inventory decreased 3.3% to 12,532

For the month of September:

Median Sales Price increased 6.1% to $262,000
Days on Market decreased 16.0% to 42
Percent of Original List Price Received increased 0.3% to 98.4%
Months Supply of Inventory remained flat at 2.6

All comparisons are to 2017

Click here for the full Weekly Market Activity Report. From The Skinny Blog.

Weekly Market Report

For Week Ending September 29, 2018

The U.S. unemployment rate recently dropped to 3.7 percent, which is its lowest mark since December 1969. The economy continues to bear impressive fruit within and outside of residential real estate, and the Federal Reserve has reacted by raising the benchmark federal funds rate by a quarter of a percentage point, the third rate hike of 2018. While this may be undesirable news for those carrying high credit debt, it is also a reflection of a bright economic outlook.

In the Twin Cities region, for the week ending September 29:

New Listings increased 15.0% to 1,592
Pending Sales decreased 6.3% to 1,123
Inventory decreased 4.7% to 12,653

For the month of August:

Median Sales Price increased 6.3% to $268,000
Days on Market decreased 16.7% to 40
Percent of Original List Price Received increased 0.7% to 99.2%
Months Supply of Inventory remained flat at 2.6

All comparisons are to 2017

Click here for the full Weekly Market Activity Report. From The Skinny Blog.

Weekly Market Report

For Week Ending September 22, 2018

Seven years ago, FICO conducted a survey of bankers that concluded that home prices would not recover until 2020. While roughly one million people are still considered underwater in terms of home value, many people would consider the housing industry to not only be fully recovered but flying forward toward unprecedented price points. While high prices may soon begin to turn buyers off, it will be interesting to see if there is a measurable slowdown in real estate activity versus a natural shift to balanced prices.

In the Twin Cities region, for the week ending September 22:

New Listings increased 6.1% to 1,555
Pending Sales increased 3.0% to 1,156
Inventory decreased 5.3% to 12,632

For the month of August:

Median Sales Price increased 6.3% to $268,000
Days on Market decreased 16.7% to 40
Percent of Original List Price Received increased 0.7% to 99.2%
Months Supply of Inventory decreased 3.8% to 2.5

All comparisons are to 2017

Click here for the full Weekly Market Activity Report. From The Skinny Blog.