Twin Cities Real Estate Market Report October 2011
Do you think you know what's going on in the Twin Cities Real Estate Market right now? Think it's all bad news?
Guess again! There are some very interesting trends developing and I'm going to share a couple with you.
Now, before you start to think it, I admit it. I AM a Realtor. However my job is to interpret the market not paint a rosy picture and I've helped my clients with research since my days working in advertising so this is not new to me.
As of the end of October 2011, Twin Cities Real Estate sales continue to be way above 2010. Total sales were 26.4% higher than last year and that goes for Traditional Sales as well as Foreclosures and Short Sales (what we call distressed inventory). I should add that Traditional sales made up 60% of total sales, so distressed sales were 40%.
That's not the whole story though, New listings are down dramatically for the month of October 2011 (-16.3%) and for the past 12 months (14.2%). The Twin Cities Real Estate Market has only 21,080 homes for sale. Traditional listings make up 67% and distressed listings make up 33%. There's no data on how many short sales are under contract but I've seen that many are awaiting bank approval, which in essence removes them as an active listing so the actual number of active listings that are capable of being purchased is even smaller than 21,080.
For comparison, the last time we had this few listings was February 2005!
Of course supply only means something when you compare it to demand, right?! Those numbers roll into months supply of inventory and the overall Twin Cities Real Estate Market number is 6.2 months. Remember that 5 to 6 months supply is market parity; I.E. not a buyer or seller's market. When you split out the types of listings you get 7.5 months of Traditional, 2 months of Foreclosures, and 13 months of Short Sales. These are all double digit reductions from a year ago!
So what does this mean?
- We have what could be the beginnings of a trend here. Demand up, and supply down means buyers have a few more months to capitalize on the lowest home values and Traditional sellers can begin to feel more confident about selling with less competition.
- More distressed properties are being purchased than are being listed which means if that continues we'll have very few distressed properties to drag down prices.
Of course any recovery will be slow since there are still many homeowners who can't sell since there home is not worth what they owe. Those people will be out of the Twin Cities Real Estate Market for a long time unless they become a short sale or a foreclosure.
The bottom line is that things are getting better for sellers and still great for buyers. Maybe next month I'll feel comfortable enough to use the "R" word... recovery.
Have a great month and a Happy Thanksgiving!