Twin Cities Housing Market: Big Picture and Little Details

The Big Picture and the Little Details Jeff Allen Director of Research Minneapolis Area Association of REALTORS® 10K Research & Marketing

Big Picture: Buyer Activity is Up

Little Details: Where is activity up?

Little Details: Where is activity up?
Activity Up (+)
Lender-mediated sales up 131.7 percent
Sales below $190,000 up 61.3 percent
Activity Down (-)
New construction sales down 5.8 percent
Condominium sales down 5.2 percent
Sales above $190,000 down 17.6 percent

Big Picture: Supply is Down

Little Details: Where is supply down?

Months Supply of Inventory (a balanced market has 5-6 months of supply)

Big Picture: Prices are Stabilizing

Little Details: Where are prices strongest?

Looking Ahead: What’s Next?
Two Drivers of Recent Market Growth
Federal First-Time Home Buyer Tax Credit (and the sequel)
Historically Low Mortgage Rates

Two Drivers of Recent Market Growth
Federal First-Time Home Buyer Tax Credit (and the sequel)
Historically Low Mortgage Rates
Gut Check: Will we still have those drivers in 6 months?

Looking Ahead: What’s Next? When we lose these market boosters, what will happen? Expect a second (smaller) dip in sales and prices. The “Double Dip.”

Two biggest challenges in next 3-5 years:
Short Sales
“ Stuck Sellers”
Both are born from lost equity that will take some time to rebuild.

Taking Stock of the Last 12 Months
Foreclosure inventory cut in half
Prices dramatically slow their free-fall
Thousands of new homeowners created
Affordability at a record high
More bumps in the road are ahead, but we’ve made a lot of progress.

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Twin Cities Housing Market: Big Picture and Little Details

by JeffAllen on Feb 12, 2010

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