Real Estate Weekly Update
April 18, 2011
For the week ending April 9, sellers introduced 1,770 New Listings to the Twin Cities housing market. That’s down an even 30.0 percent from the same week in 2010 when motivated sellers rightfully decided it was time to sell.
Current buyer activity simply cannot compete with an elevated 2010 incentive market. Pending Sales were down 22.7 percent from the same week last year to 838 contracts written. Analyzing a wider time frame provides perspective on the theatrical plunge. Buyer activity was down 16.7 percent on average over the past three months. Comparing non-incentive markets to non-incentive markets also tells a more realistic story. Buyer activity was down only 2.3 percent compared to the same week in 2008.
The gap between this year’s and last year’s Active Listings for Sale has been growing for 10 straight weeks. There is also a pattern with year-over-year inventory levels, which are down 14.7 percent from 2010, 12.3 percent from 2009 and 28.3 percent from 2008. Those shopping for a home now have 22,869 options or about 27 active listings per purchase agreement signed for the week.
Statistics provided by the Minneapolis Area Association of Realtors.
Current Trends and Projections Video
How Foreclosure Activity Affects Prices and Inventory
Pending sales in the 13-county Twin Cities metropolitan area decreased 17.6 percent from March 2010 to 4,162 purchase agreements signed. Sellers introduced 6,977 new properties to the market, which was 30.2 percent fewer than the year prior. Inventory levels shrunk by 4.5 percent to 24,112 units—the lowest March inventory count since 2005. This trend should help stabilize prices and restore balance to the market.
Market conditions were particularly strong at this time last year due to the 2010 tax credit,thus making 2009 and 2008 more reliable comparison years. Pending sales were down a less dramatic 5.6 percent from March 2009 and they were actually up 14.6 percent over March 2008. Closed sales were down 3.5 percent from March 2010 but were up 2.7 percent over March 2009 and up 17.4 percent over March 2008.
Market activity can vary greatly from one segment to the next. Although overall purchase activity was down 17.6 percent, the foreclosure segment saw a 31.3 percent jump in pending sales and a 29.9 percent jump in closed sales. Foreclosure prices decreased 11.0 percent to $105,000; short sale prices decreased 6.9 percent to $134,950; and traditional prices decreased 3.5 percent to $192,000. While the bargain status of lender-mediated homes unquestionably helped their popularity surge among consumers, that same popularity pushed overall prices down 15.2 percent to $140,000.
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