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Weekly Market Activity — Week
of June 1st
Home sales in the Twin Cities housing market took another dip
as the hangover from the tax credit expiration continued. For
the week ending May 22, there were 624 pending sales-a precipitous
drop of 42.5 percent from a year ago.
The biggest drops in sales since the credit ended can be seen
in the traditional seller market (i.e., anything that's not a
foreclosure or short sale) and in the middle price ranges from
$150,000 to $350,000. Pending sales have dropped in those ranges
from 1,085 the week the credit ended to 384 for the week ending
May 22. In sum, it may be a difficult summer market for home
sellers.
The good news is that new supply is also slowing, which means
the market is already self correcting to avoid a surge in unneeded
inventory. New listings fell to 1,581 for the same reporting
week, a decline of 15.8 percent from this time last year.
The Supply-Demand Ratio has been updated for June and shows
a figure of 5.05, which means there are 5.05 homes for sale for
each buyer in the month. That's a 10.9 percent increase over
the mark seen a year ago and is a result of the decline in buyer
activity.
Monthly Indicators — February 2010
For the fourth consecutive month, median home prices in the
Twin Cities 13-county metropolitan area showed a year-over-year
increase. We haven't seen four consecutive months of progressively
increasing year-over-year growth since June 2004.
The April Median Sales Price of $169,800 was a delightful 11.0
percent increase from last April's mark of $153,000. That's the
strongest year-over-year increase since we've had reliable data
(2001). This strong upward price mobility is partly due to underpriced
lender-mediated inventory that has migrated through the system.
The tax credit-inspired buying frenzy continued to bring inventory
down slightly. Sellers tried to capitalize on it too and may
have gone a bit overboard by listing 20.0 percent more homes
on the market than during April of last year. The May Supply-Demand
Ratio of 5.69 means that there are 5.69 homes available per buyer.
In April 2008 the mark was 7.28.
Sellers currently exceed the 5-year YTD average Percent of Original
List Price Received at Sale figure of 93.5 percent of initial
asking price this month. Months Supply of Inventory weighed in
at 6.7 months, just outside the five to six months range in an
ideal, balanced market.
Housing Supply Outlook — What to Watch For
The townhome market segment has made dramatic strides in the
last year. A year ago there was 9.3 months of supply -- today
there is only 6.5 months of supply. That's the biggest improvement
among the various property types by a country mile. Townhomes
below $120,000 have seen the largest drop in supply, as homebuyers
using the tax credit have soaked up a heavy portion of the inventory.
Sellers are getting closer to their original asking prices for
every property type except condominiums, where the mark from
the last 12 months of 90.2 percent is slightly lower than it
was a year ago.
Sales are up in every price range except above $500,000, where
sellers still face challenging conditions brought on by a dearth
of buyers.
Source: Minneapolis Association of REALTORS®
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