Weekly Twin Cities Real Estate Market Report

When compared to the previous week's dive, pending sales held strong during a time of typical seasonal swoon.

For the week ending November 21, there were 604 purchase agreements, a 5.2 percent increase over the same week in 2008 and the first time in a month not to show a week-over-week plunge in sales activity.

Although sales are up over last year, they have slowed considerably from October's tax credit gold rush.

With the winter season before us, sales will likely continue their respite into 2010.

-MAAR

The Skinny

Twin Cities Weekly Real Estate Market Report

Home sales in the Twin Cities region have dropped significantly in recent weeks as the tax credit's extension temporarily reduces urgency and autumn's typical slowdown sets in. For the week ending October 14 there were 603 signed purchase agreements, down 7.1 percent from the same week last year. That's the first year-over-year decline since last October. Previous weeks leading up to the tax credit extension were showing 40 percent increases or higher.

The slowdown in sales has been expected. Said Lawrence Yun, Chief Economist for the National Association of REALTORS®, "Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month. A measurable decline should be anticipated." Our local market isn't always in line with the national message, but we have to agree on this one.

New listings continue to underperform 2008 figures, which is keeping inventory low. There were 1,208 housing units added for the week ending November 14. Total active inventory for the current week is down more than 20 percent from last year.

MAAR News Release: Heavy Buyer Activity Continues in October

MAAR News Release: Heavy Buyer Activity Continues in October

Low mortgage rates, affordable supply and the home buyer tax credit kept home sales moving in October.

There were 4,676 signed purchase agreements during the month, up 34.4 percent from a year ago—the 16th consecutive month of year-over-year increases in pending sales. The recent extension and expansion of the home-buyer tax credit should mean continued buyer movement into early 2010.

Traditional pending sales (excluding foreclosures and short sales) were up 55.0 percent from last October, a sure sign that demand is beginning to spill over into that segment.

The October median sales price of $169,000 is a slight dip from the prior month, but the dip is much less extreme than typical entering the fourth quarter. Compared to last October, it's a 6.1 percent decline—the lowest year-over-year decline in 24 months.

The median sales price of traditional homes in October was $193,500, down 13.2 percent from a year ago. Lender-mediated homes posted a October figure of $129,000, down 4.4 percent from a year ago.

Foreclosures are still selling much more frequently than short sales, bringing the months supply of foreclosures to 1.4, while short sales still have 13.2 months of supply. More information on these market segments is available with the October 2009 Update to Foreclosures and Short Sales in the Twin Cities.

Good news for sellers: Homes are selling quicker and sellers are receiving closer to their original asking price than they were a year ago. But the experience varies by price point. For example, activity in the upper-bracket price ranges is still pretty slow.

The lower and middle price brackets will probably see a lot of movement over the next nine months," said MAAR President-Elect, Brad Fisher. "If you're a buyer in those ranges, action is your best weapon."

-MAAR

Weekly Twin Cities Real Estate Update

Clock here for full report

With the home-buyer tax credit now expanded and extended, sales activity in the Twin Cities region slowed down as expected for the week ending November 7. And by "slowed down," we mean it "only" posted a 17.2 percent year-over-year increase as opposed to last week's 42.9 percent year-over-year increase. So we're being openly facetious; market activity is still robust despite the respite from urgency.

New listings were down 14.3 percent for the same time period comparison, but the expansion of the tax credit to provide $6,500 to move-up or move-down buyers may create more new seller activity in the coming months.

And for the first time in several years, new listings may actually be welcome. The region has shed more than 12,000 units of inventory since the supply peak in September of 2007. In the lower price ranges, buyers are facing a shortage of good inventory. See page 6 of our Housing Supply Outlook for a more detailed look.

Twin Cities Weekly Real Estate Market Report

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The Twin Cities housing market continues to post strong pending sales figures as fall progresses. For the week ending October 31, there were 826 pending sales. That's down from the week before but 42.9 percent greater than the same week last year.

The extension and expansion of the tax credit means that first-time home buyer activity will remain strong, but don't bank on the same blockbuster numbers we have seen this year. If you were a potential first-time buyer who was qualified to purchase in 2009, odds are good that you already bought. The fact that the income limits have been raised for eligibility does help since it widens the credit's availability.

The $6,500 credit for second-time buyers will spur some sellers to put their homes on the market who had previously been on the fence. New listings will likely strengthen this winter and into early 2010 as a result.

Some updated numbers for this month:

Days on Market is still shrinking, down to 128. That's 9.4 percent below last October.
The Percent of Original List Price Received at Sale bumped up to 94.6.
The Housing Affordability Index increased to 202, up 25.5 percent over 2008.

NAR Frequently Asked Questions (New Tax Credit Extension)

Homebuyer Tax Credit Changes

Status of the First Time Homebuyer Credit / Chris Galler, Chief Operating Officer MAR

Weekly Twin Cities Real Estate Market Update

Did you get all your screams out over the Halloween weekend? Well here’s a scary thought to keep you in the Halloween spirit: we’re running out of homes to sell in the lower price ranges.
For the week ending October 24 there were 926 signed purchase agreements, up a monstrous (get it?) 53.8 percent from a year ago. Over the last three months, sales of homes under $250,000 are up 40.0 percent from the same period during 2008, while sales above that watermark have dipped by 0.3 percent. As a result, compared to a year ago the inventory of available homes below $250,000 has dropped by over 5,300 units.

With the possibility of the federal tax credit for first-time buyers being extended and expanded, there may be significant shortages of inventory for buyers looking in those price ranges as 2010 begins.

For November, the overall Supply-Demand Ratio is a paltry 7.69 per buyer, down 29.3 percent from the year prior.