The Twin Cities spring real estate market is officially in full bloom! The numbers are out for March and they confirm what most people in the industry already knew; March was a robust month for sales and the near future looks very promising. Here are a few eye popping year-to-date statistics:
• New listings up 17.7%
• Pending sales up 20.4%
• Closed sales up 6.8%
• Median sales price up 10.8%
New listings are what the market needs right now. There is a supply imbalance between buyers and sellers in many areas. Currently there is a 3.3 months supply of listings on the multiple listing service (MLS). As a reference, a 5-6 months supply is considered a balanced market. The current 3.3 months supply is indicative of a seller’s market. Therefore, an increase in new listings was welcome news in March.
While closed sales had a minor gain of 6.8%, pending sales increased a whopping 20.4%. Closed sales are equivalent to looking in the rearview mirror; they indicate the sales that were put together 20 – 60 days prior. It’s interesting, but the data is a little stale. When assessing the current and future market I focus much more on pending sales. Pending sales are purchase agreements that have been consummated, but not closed. Therefore, it is a better leading indicator than closed sales and a 20.4% increase is extraordinary.
The most publicized real estate stat is median sales price. The media and public seem to gravitate toward this statistic, and for good reason. This stat is firm, factual and concrete. However, I will argue that it is too general. I just did a quick search on MLS for closed sales thus far in April and the prices ranged from $30,250-$2,000,000. That’s a wide range! The fact is that residential real estate is hyper local; our MLS region is actually comprised of hundreds of submarkets. So, while the 10.8% increase is a good indication that prices are generally increasing, it doesn’t mean that your home’s value increased 10.8%. It may have appreciated more or less than the median. To determine your home’s value, contact your realtor and please refrain from putting too much faith in a zestiment.
In addition to all the good news above, mortgage interest rates remain near historical lows and the Twin Cities has one of the lowest unemployment rates in the country at 4%.
Taking into consideration what I’m seeing at Roger Fazendin REALTORS, what I’m hearing from my friendly competitors and the statistics above, I am downright bullish about the remainder of 2015.
I hope you are enjoying spring in the Twin Cities.