If you’re a buyer or seller in this market, you’ve probably experienced just how quickly things are moving. In May, a full half of homes on the market sold in less than 20 days with sellers getting 99.5 percent of their asking price on average, according to new data from the Minneapolis Area Association of REALTORS®.
The number of properties for sale continues to be lower than the demand, causing nominal home price increases for 63 consecutive months. And while new listings improved slightly in May, buyers still had 17.3 percent fewer choices than a year ago.
Key insights
(All comparisons are year-over-year)
- New listings: +0.7%
- Number of homes for sale: - 17.3%
- Median sales price: + 5.5% to $250,000
- Pending sales: - 3.1%
- Average days on market: - 15.0%
Economic check up
- Minneapolis-St. Paul area unemployment rate: 3.3 percent
- National unemployment rate: 4.3 percent
- Average 30-year mortgage rate declined from 4.3 to 3.9 percent
- Price gains in Twin Cities metro outpaced the nation
Are we headed for another bubble?
A 2008-style bubble is extremely unlikely for a number of reasons:
- There’s a lack of speculative building
- Money is cheap to borrow, but not easy to qualify for (the unemployed and under-employed can’t get approved for home loans anymore)
- Consumers are generally buying within their means
- The economy continues to improve
- We have a smarter regulatory environment
- Home price growth has been moderate; they are well below the pre-crisis level
- Household formations among millennials are powering the housing market
How can a homebuyer compete?
Serious buyers will need to be prepared to move quickly when they are interested in a home.
- Set up saved searches and get alerts when new listings matching your criteria
- Work with a savvy Realtor who has a strong network to find homes before they are listed
- Get pre-approved for a mortgage
- Be prepared to compete with multiple offers
