A recent national survey reported that 69% believe that real estate is a good investment in spite of the roller coaster ride we have been on the last few years. Our local market supports that, showing continued signs of improvement including a decrease in lender-owned and short sales and a rise in traditional sales to 65.4% of the market.
This continued increase in traditional sales also helped bolster median sale price, which rose again in June to $179,500.
Closed sales were also up and pending sales held steady so we shouldn't see a big drop in closed sales next month.
What has really been flat this year is the inventory supply of homes for sale, which hasn't changed much all year and hasn't been this low since the beginning of 2004.
What all this means is the real estate market is getting back in balance. I remember excitedly reporting that December showed a weak seller's market as the months supply of inventory dropped below 5.0, something not seen since 2005. I was afraid it could be a winter blip but the supply has stayed between 4 and 5 months all year, with a 4.6 month supply of homes currently available for sale. The market is considered balanced between buyer and seller when there is a 5-6 month supply of homes for sale. Interestingly enough, the supply is lowest for townhomes, which is at 3.4 months.
This shorter supply of homes for sale has also resulted in a dramatic increase in the percent of list price received, which was 95.1% in June... and a drop in days on the market until sale, which was 113 in June. We are seeing more full price and multiple offers... and the good ones tend to sell more quickly.
With interest rates continuing to hit lows, most buyers recognize that now is a great time to buy. As the market returns to 'normal', people are also buying for more 'normal' reasons... thinking of a home as a place where life happens and buying for 'life' reasons.
The figures above are based on statistics for the combined 13-county Twin Cities metropolitan area released by the Minneapolis Area Association of Realtors.
Never forget that all real estate is local and what is happening in your neighborhood may be very different from the overall metro area.
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Sharlene Hensrud, RE/MAX Results - Email - Minneapolis - St. Paul Real Estate Market
