It was a very busy spring and summer in the Twin Cities 2018 real estate market. As many of you may have heard or experienced yourself, most homes would sell within days with multiple offers. The St Paul Area Association of Realtors provides this perspective; “Seven years ago, FICO conducted a survey of bankers that concluded that home prices would not recover until 2020. While roughly one million people are still considered underwater in terms of home value, many people would consider the housing industry to not only be fully recovered but flying forward toward unprecedented price points. While high prices may soon begin to turn buyers off, it will be interesting to see if there is a measurable slowdown in real estate activity versus a natural shift to balanced prices.”
In my research, I found the median sales price in 2012, at the bottom of the market, was $149,900. Now the median sales price is $260,000. That’s a 58% increase over 7 years or an average of 8.28% increase per year. We know that rate is not going to be sustainable for the long term.
History has shown that the real estate market shifts, shifts that is from a seller’s market, to a balanced market and then to a buyer’s market on average about every 7 years. Are we going to see a shift in the market away from a seller’s market? The real estate economists seem to think so. What do the numbers say?
The inventory of homes for sale is down from a year ago.
New listings were on a downward swing up until early this year and we can see it starting to go back up over the last few months. Is this the start of a market shift? Time will tell.
Closed sales down from one year ago. Low inventory could have an effect on the number of closed sales. Does this decrease signal a shift?
If you are wondering how the market for your area is impacting the value of your home, I would be happy to have a phone conversation or meet with you to review relevant statistics.
Rochelle Allison, REALTOR