As we charge ahead in 2013, I’d like to share some insight into the 2012 real estate statistics. By almost any measure, 2012 was a fantastic year for residential real estate in the Twin Cities and particularly Roger Fazendin REALTORS. We experienced the makings of a real market recovery and this was not anticipated!
Here are the highlights from 2012 (as compared to 2011):
- Median sales price rose to $167,900, an 11.9% increase
- Buyers purchased 48,641 homes, the second highest figure since 2006
- Sellers listed 65,914 propertied which was a 10 year low, and triggered:
- Listing inventory dropped 31.8% to 11,875, another 10 year low
- Month’s supply of listing decreased 42.2% to 2.9 months
- Days on market was down 20.6% to 117 days
- Lender mediated propertied (short sales/foreclosures) made up a smaller market share:
- 34.6 % of all new listings were lender mediated, down 41.9%
- 37.3% of all inventory was lender mediated down 44.4%
- 39.7% of all closed sales were lender mediated down 50%
After 6 long years of a descending market, the market turned the corner in February of 2012. Why was this you ask? There were several factors that contributed to this rebound. First off, you can see from the stats that there was a shortage of listings because banks slowed the supply of foreclosures and many potential sellers decided to wait to list their homes. As a result, there was more competition among buyers for listings resulting in price increases.
A few reasons some sellers chose not to list:
- Fear of not realizing a return on investment
- Fear of job security
- Political uncertainty during an election year
Buyers, on the other hand, came out in droves and the pent up demand was unleashed.
Some reasons for increased buyer activity:
- Amazingly low interest rates (2012 average for a 30-year fixed mortgage was 3.66%!)
- Suppressed home prices
- General confidence in the jobs market (US unemployment was 7.7% in November, MN was 5.7% and Twin Cities was 5%)
- Confidence in US economy and real estate market
Banks did their part. Many lenders revised their refinancing standards which allowed many home owners to avoid foreclosure. Some lenders realized the value of approving short sales, versus foreclosing, and streamlined their processes. With so much foreclosure activity from 2008-2011 much of that inventory moved through the market.
Today, we find our real estate market close to a “balanced market”. I believe it is neither a buyer’s nor a seller’s market, but conditions are favorable for both. Buyers will say there are not enough listings to choose from, while sellers will say prices are not as high as they would like. This makes for a complex market. To help navigate this market I strongly recommend that you connect with your REALTOR, and I hope that is a Roger Fazendin REALTOR!