July 2013 was an interesting month for residential real estate. Anecdotally, it was a slow month. I heard many real estate agents lament the fact that July seemed slow, there were fewer new listings and buyers seemed less motivated. However, the numbers tell a different story. The numbers were very impressive at Roger Fazendin REALTORS and in the in greater Twin Cities real estate market.
New listings continue to outpace 2012, we saw a 24.6% increase over July 2012. This is a significant metric because listing supply has been low due to the high demand for housing purchases. We need significant listing increases just to keep pace with demand! In addition, homes are selling much quicker. In July 2012 it took an average of 105 days for a home to sell, while last month it took 72 days (that is a 31.4% decrease). As you might have guessed, prices are also on the rise, the average sale price in July 2013 was $208,757 or over 17% higher than July 2012.
All of these factors are starting to turn the dial in the seller’s favor and the public is taking notice. Proof of this is the continued decline of distressed property listings (foreclosures and short sales). New listings were up 24.6%, but traditional seller activity surged 55.7% over last July – the most in nearly 10 years!
I anticipate all of these trends to continue through summer and into fall. With prices on the rise, and less “deals” to be found, we are seeing less cash investors in the market and more traditional/owner occupant sales. It appears we have weathered the worst of the housing collapse and are headed toward a more “normal” market. Two items to keep an eye on the rest of the year are mortgage interest rates and employment numbers. Both are influenced by and have influence upon the residential real estate market. It has become evident that mortgage interest rates will continue to climb, but not at the torrid pace of a few months ago. The employment numbers are less predictable, but also have a huge impact on consumer spending and confidence in our national economy.