Welcome to the final 2015 installation of Inside the Numbers.
This is the ideal time to look back at the Twin Cities residential real estate market in 2015. These are not the official statistics that will come out in mid-January. However, we have plenty of data over the past 11 months to go on.
Before looking back at 2015, I wanted to address a recurring topic on this blog; the inevitable increase in mortgage rates. We can put that one to bed because as predicted, rates increased .25 percent on December 15th. This rate increase should have little effect, if any, on the real estate market because it was anticipated and slight. It will be interesting to see if these modest rate increases will continue in 2016.
Sales continued to be healthy throughout November. Below are a few year-to-date statistics comparing 2014 to 2015 (through November):
YTD 2014 YTD 2015 +/-
New listings 71,080 74,778 +5.2%
Closed Sales 46,119 52,377 +16.2%
Median Sales Price $206,000 $220,000 +6.8%
Month’s Supply of 3.9 2.7 -30.8%
Homes for sale
New listings, closed sales and Median sales price continue to trend in the right direction. Month’s supply has reached alarming lows at less than three months’ supply! As a reference, a balanced market is around six months supply. Since buyer demand is unlikely to decline, this lack of supply will continue until the annual uptick in listings late winter/early spring.
In general, because of this imbalance in supply/demand, it is a good time to be a seller and a challenging time to be a buyer. This has been a recurring theme throughout the year and will certainly influence the market in the coming year.
2015 was a tremendous year for the Twin Cities residential real estate market. Distressed properties have diminished significantly as many home owners got “above water”. In certain markets sales prices have reached new highs! The stat that gives me the most comfort is the robust, but sustainable price appreciation which will be around 7% for the year. The 60-year average is around 4%. We learned the hard way that double digit appreciation was unsustainable and creates a market bubble.