As we come into the holiday season, the Twin Cities real estate market continues its slow but steady re-balancing act as sales skew farther to the traditional side of the market and sales prices persevere with their upward march, according to data from the Minneapolis Area Association of REALTORS®.
While pended sales were down 7.5 percent overall from December 2013, the number of pended sales for traditional listings (homes that are not in foreclosure or short sales) was up 2.1 percent, signaling continued strengthening in the traditional housing market and waning in distressed housing.
The shifting mix of sales from distressed to traditional over the past few years has led to 33 consecutive months of year-over-year price increases. In November, the median sales price was up 5.1 percent over 2013 to $205,000.
Looking forward to 2015, experts expect to see pent up demand coming into the spring market selling season, which, despite its moniker of “spring” typically begins at the end of January, even while Minnesota and western Wisconsin are still in the deep freeze.
The Minneapolis-St. Paul metro area was predicted by CNN Money to be one of 2015’s hottest housing markets, especially among the Millennial generation, due to extremely low unemployment, a large population of young residents readying themselves to buy and affordable housing.
One way a more urban set of homebuyers is making its mark is in the downtown condo market. New condo developments downtown sparked a 65 percent increase in the median sales price for new construction condos over last year. Apart from the booming condo market, the broader market expects to see continued, but more tempered, price increases, which will help preserve affordability for first-time buyers.
The market is also eagerly watching the rollout of new mortgage products form Fannie Mae and Freddie Mac that will help first-time homebuyers qualify for conventional mortgages with down payments as low as 3 percent. These new products are expected to open homeownership opportunities to more buyers who may not have the opportunity to save large down payments, especially as rents continue to rise.
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The Monthly Skinny
"The Monthly Skinny" is provided by the Minneapolis Area Association of Realtors
*Edina Realty Appointment Center statistics.
Based on information from the Minneapolis Area Association of REALTORS®, Inc. Data collected from the REGIONAL MULTIPLE LISTING SERVICE OF MINNESOTA, INC., for properties in the 13-county region exclusively.