Alas, spring as finally arrived in the Twin Cities! Along with that is proof that the residential real estate market is weather dependant and the market is recovering. With the recent warmer weather we are beginning to experience an increase in new listings. This is welcome news for home buyers, who have fewer choices than usual with low listing inventory levels. I am often asked if weather is a factor in our northern climate and I have always thought it has but have never seen clear proof until this spring. In a very practical way it makes sense, if you have a beautiful lawn, lush landscaping and other outdoor features why would you sell when it is under a foot of snow?
In addition to an increase in new listings, we are seeing a different “mix” of listings. Over the past 6 years distressed properties (short sales and foreclosures) have been a large percentage of new listing, at points making up over 50 percent of the listing mix. That has changed dramatically, last month almost 78% of new listings were traditional listings, or non-distressed. This not only provides better buying options for most buyers, it indicates that the residential real estate market is in full recovery mode.
All that being said, we still have a shortage of listings. Buyer demand remains massive, being driven by low mortgage interest rates and lower prices. I anticipate this imbalance of supply and demand to extend through the summer and into the fall. Because of this I also anticipate home prices will continue to increase. The road to housing recovery is, and will continue to be, bumpy but the market is headed in the right direction.