By all accounts we continue to enjoy a robust real estate market, one that is borderline balanced for buyers and sellers. I have recently seen headlines that indicate a slowing market because of the increasing housing inventory and decrease in closed sales compared to 2013. Before we compare 2014 stats with 2013 we need to take into account that last year was an extraordinary year for real estate in the Twin Cities. The truth is, as a residential real estate broker I can’t be happier about the way this year has evolved.
First off, new listings are up 3.6% overall. More importantly, traditional listings are up 19.7% while lender-mediated listings are down 40.2%. This illustrates how much more healthy our local real estate market is even compared to a year ago. It was not long ago that sellers were waiting (for the market to improve) before listing their home for fear of selling at a discount. It appears that the waiting is over.
Recently the media has tended to focus on the decline in pending sales (-7.9%) and closed sales (-8.4%). This myopic view fails to consider the dramatic decrease in lender-mediated sales. Of course there were fewer sales than 2013. Bargain hunters and investors were out in force last year capitalizing on the final phase of the price declines. Because prices are up, less bargains available for purchase, which has resulted in fewer sales. I prefer quality over quantity.
Traditional sales generally tend to be of higher quality and price, which brings us to my final point. The 7.9% increase in median sale price is not too high and not too low, it is just right. If only I had a magic wand, I would lock in an annual 7.9% price increase for a lifetime! I can only wish though. We will inevitably experience the ups and downs of an open market. Which is why you should stay informed about your local residential real estate conditions.