Summer vacation is over and kids are back in school. Fall is a time of transition: summer to winter, hot to cold. The same is true for the real estate market this year, as we find the market transitioning from a strong seller’s market to a more moderate balanced market.
Buyers are seeing welcome changes in inventory and interest rates. According to the Minneapolis Area Association of REALTORS®, the inventory of homes for sale increased 8.7 percent in August over the same time last year meaning buyers had the largest pool of properties to choose from since mid-2010. Some quality listings are still seeing competitive multiple offer situations, but there is some relief in the amount of competition from other buyers.
Buyers are also benefitting from lower interest rates than at the same time last year, despite predictions that interest rates would rise in 2014. According to Freddie Mac, the average 30-year conventional interest rate at the end of August 2014 was 4.10 percent, compared to 4.5 percent at the end of August 2013. Continued low interest rates and low jobless rates make Minnesota one of the best states for home affordability.
Sellers still have many market indicators moving in their favor. Prices have been up year-over-year for 30 consecutive months (the median sales price was up 5.3 percent to $219,001) and the average number of days a listing is on the market was down nearly 3 percent to 68 days.
A running theme this year has been a comeback of the traditional real estate market. Overall pending sales were down 7 percent from last year in August, but a closer look reveals an increase in traditional sales, which were up 2.5 percent. Lender owned sales were down 43 percent and short sales were down 49 percent.
Many market experts agree that one aspect that continues to hold back a stronger market recovery is wage growth. While unemployment in Minnesota is low, stronger wage growth would fuel even more movement and activity within the real estate market.
One market segment that has also been recovering well this year is new construction, and September welcomes a favorite real estate event, the Parade of Homes. If you’re in the market for a new construction home, we have experts who can help you find and plan the home of your dreams.
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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.