If you ask around with home buyers, Realtors, Loan officers and read real estate industry publications, you’ll hear the same, consistent concern; low housing inventory. Low inventory has been consistent in many markets throughout the country, however we know one thing that is even more consistent in real estate; ALL REAL ESTATE IS LOCAL. And on that note, our local Minneapolis/St. Paul housing market is also currently consistent with most national metropolitan real estate markets with regard to inventory; the amount of available homes for sale is not sufficient for the amount of active buyers.
This creates quite the conundrum for buyers, Realtors and lenders. Buyers are experiencing much frustration, both in having to wait exceptional amounts of time for the right home to come on the market, and yet when it does, most buyers are competing with multiple buyers and multiple offers. Oftentimes when the right home for you hits the market, it’s also the right home for many other buyers who’ve been experiencing the same difficulty you have been, and thus the multiple offer scenario (oftentimes as many as 25 – or more – offers per home) becomes overwhelming, and frustrating. Your exciting dream of buying the right home becomes almost like a game of chance, when your offer is submitted, in competition with others. This is also very difficult for the Realtor. And this is why we suggest teaming with a very good and hard-working professional. You’ll need every tool in your arsenal, to make your home purchase successful.
There are many, pre-approved buyers, ready to purchase. The issue is inventory. Certainly the lower levels of inventory put upward pressure on pricing. +5.9% is above average (in a balanced market, it should be @ 3.0%, +/-).
I also hear the same thing among friends of mine in the Realtor and Lending world; inventory is the issue. And this is not a new thing.
Lastly, this inventory problem is NOT predicted to change, anytime soon.
Follow this link to see the April 2016 Housing Update for the Minneapolis/St. Paul area, from MAAR (Minneapolis Area Association of Realtors) – called ‘The Skinny.’ https://www.wmtitle.com/blog/
Summarized; our local market remains strong, with inventory levels low, good buying activity, housing prices increasing, and mortgage rates remaining @ 3.6% on average.
The salient points;
– The number of homes for sale are @ 15%-20% lower than one year ago (April 2016 to April 2015).
– Pending sales (homes that have sold, but not yet closed) have risen by 1.6%, for a total of 6,373 when comparing April 2016 with April 2015.
– Closed sales are up by 6.1% (for a total of 5,128) when comparing April 2016 with April 2015.
– The median sales price increased by 7.7%, to $231,500.
– Our market has 2.6 months of inventory/supply, which is down 27.8% from this same time (April), last year.
– The percentage of list price received at sale is up 1%, to 98% – this is phenomenal.
– Mortgage rates remain @ 3.6% – which is historically low. This is causing lenders to be slightly backlogged with files.
Generally speaking, the local housing market outlook is very good.
Link to ‘The Skinny’ video: https://youtu.be/7CEaZ9aPMS0