As we enjoy the final glimpses of summer, it is a good time to assess what the market has done in the first 3 quarters and prepare for the upcoming fall and winter months. Thus far, the Twin Cities has enjoyed a healthy market in 2014. We did not experience the buying craze that we experienced in 2013 because much of that was driven by distressed listings and investor activity. Both are interconnected and have taken a back seat to traditional buyers and sellers in 2014.
Here are a few stats to take into account:
• 18,227 – Current Inventory (number of properties for sale) , which is a 9% increase over 2013
• 4.4 – Month’s supply of homes for sale, up 15.8% from July 2013
• 8015 – New listings, up 9.8% from July 2013 (+4.1% year-to-date)
• 28,013 – Closed sales year-to-date, that is a 9% decrease from 2013
• $234,900 – Median sale price for homes sold in 2014, up 6.8% year-to-date over 2013
While these are not the eye popping stats of 2013, I am relieved that the market has cooled a bit. It is clear that we are transitioning from a recovering market to a more balanced market. That is a good thing. Buyers now have more options and sellers can take comfort in the steadily increasing prices. A key to the recovery and to the current stability are mortgage rates, which are hovering around 4% for a 30-year fixed loan.
We are in a good place right now. I have learned to be cautious about using the term “normal market” when it comes to residential real estate. If that’s where we are now, don’t blink because the market could tilt in favor of the buyer or seller rapidly. With 4.4 month supply of inventor we are technically in a “seller’s market”, but it’s closing in on a balanced market (6 month of inventory) and beats the heck out of the beginning of the year when we were around 3 months of inventory.
Moving forward into the fall months I anticipate much of the same. Inventory should continue modest growth, but buyer demand should remain strong making it another active fall. With mortgage rates anticipated to remain low, one can expect a strong market through Thanksgiving.
After that, we head into the Holiday slide. Historically the time between Thanksgiving and the Super Bowl (go figure) bookend the slowest times for residential real estate sales in the Twin Cities. However, if this season is similar to the past two we will experience a more active “slow season”. But I don’t want to get too far ahead of myself.
For now we are enjoying a healthy, well balanced market. The market does not dramatically favor the buyer or seller. This is something we have not experienced in many years. I hope this will last, but stay tuned, it never does!