As we enter the final quarter of 2016 and real estate activity begins to wind down, new signs of seller confidence are starting to appear, and with good reason. Many Twin Cities metro localities and certain price points continue to see strong sellers’ markets, according to new data released by the Minneapolis Area Association of REALTORS®.
- New listings were up 5.6 percent over last September
- New inventory did not satiate buyer demand; inventory was still down 16 percent from last year
- Median sales price was up 3.6 percent over last Sept. to $230,000
- Multiple offers are still transpiring in popular areas with low inventory
- The average time on market was 56 days, down nearly 14 percent from Sept. 2015
Some consumers see the strengthening of the market as ominous signs of another housing bubble, but local real estate market experts say there are many key differences between conditions that created the housing boom leading up to 2006 and the recovery we are seeing today. We’ve put together an infographic to help compare the bubble of 2006 and today’s housing shift.
Wanted: Starter homes
First-time homebuyers — many of them millennials — are trying to enter the housing market, but are being stymied by a dearth of starter home inventory.
- While all price ranges saw a 5.6 percent increase in new listings, homes under $300,000 saw a 2 percent decrease in new listings
- Homes priced $190,000–$250,000 had the strongest sales activity in the last 12 months, followed by homes in the $250,000–$350,000 range
- Single family homes make up the greatest number of sales, but condo and townhome sales saw the largest year-over-year sales increases
Exceptional Properties experience an exceptional market
It’s important to note that while homes may seem to be flying off the proverbial shelf in some areas and price points, the same does not hold true for all homes, especially the luxury home market.
- In Sept., homes priced above $500,000 stayed on the market an average of 126 days, compared to 47 days for homes under $300,000 and 56 days for the market overall
- Homes sold in the $500,000+ bracket received 95 percent of their original list price, while homes under $300,000 received nearly 98 percent of their original price (both are still great percentages)
- The months’ supply of homes for sale above $500,000 is 8.2 months, indicating a buyers’ market. Homes under $300,000 have just two months’ supply—a strong sellers’ market (a balanced market is considered to be around six months’ supply)
- The Minneapolis-St. Paul metropolitan area unemployment rate is 3.6 percent, among the best in the nation
- Mortgage rates continue to be low, currently around 3.5 percent for a 30-year conforming loan
- Incomes in the U.S. are finally showing gains, which should support more buyers entering the market
- Energy prices remain low, which can help buyers save more for a down payment
Wondering what picture the real estate data paint for your home? A free market analysis from a professional can help you find out. Follow #SellerInsights or #BuyerInsights on Facebook, Instagram, Twitter and YouTube to get more expert advice and insights.