Video courtesy of Minneapolis Area Association of REALTORS®
What is in store for the Minneapolis housing market? Who knows? Common sense will tell us that Minneapolis real estate pending sales and prices on closed homes won’t see a huge uptick until the overall economy improves. Bernanke’s prognostications about the economy aren’t very clear, so if Bernanke doesn’t know, who does? I certainly don’t think anyone at the Minneapolis Area Association of REALTORS is better qualified than the chairman of the Federal Reserve to make any predictions about the economy. I certainly am not. Since we don’t know much about where the economy is going, we can’t say much about what is going to happen with the Minneapolis housing market, although many will try. Any forecasts that you happen to hear should all be taken with a huge grain of salt.
One thing is certain; market conditions strongly favor Minneapolis real estate buyers.
If you want to play it safe, we can just stick with MLS statistics and perhaps make a few observations about observable trends. The above video highlights some recent statistics that were gathered by the Minneapolis Area Association of REALTORS®:
- August 2010 was a rough month. Reported pending home sales came in at 3394, a substantial drop from the 3,834 that were reported in August 2010. Although this decline may seem alarming, this is actually the smallest decline observed in the Minneapolis housing market since June 2010, and the rate of decline is steadily decreasing. However, if we are seeing this trend over a period of just three months, does this really mean anything?
- Buyer activity is up slightly, but high inventory levels still means that the Minneapolis real estate market is sharply tilted in the home buyers favor. Not as many new listings are arriving on the market as before, but the fact that not very many listings are leaving the market means that Minneapolis housing inventory has piled up. Current housing supply will determine future pricing changes, and the data suggests that this might be a boon to home buyers, and a challenge to home sellers.
- After 7 months of year to year price gains, the accumulation of inventory was responsible for a small price drop of 1.6%
Housing supply is at 7.8 months, at an increase of 8.3% since this time last year. (A normal or “balanced” supply is considered to be five or six months.)