The University of St. Thomas Minneapolis St. Paul Residential Real Estate Index for February was recently released. Herb Tousely, director of real estate programs at the University, expects home prices to increase in the coming months because of normal seasonal fluctuations and because of the tight inventory on the market.
*The inventory of homes for sale remains at a historically low level. In February there were 12,232 homes for sale (in the Twin Cities Metro area) compared with 17,850 in February of 2012. One measure of market health is to examine the ratio of homes on the market for sale and the number of homes sold. In February there were only 4.44 homes for sale for every homes sold. This is a very low level when compared to historical data. In February 2012 there were 6 homes available for sale for every home sold and in February of 2011 the ratio was 10:2. Generally, in a balanced market, the ratio typically falls between 6 and 10 homes available for sale for every one sold. This continues to be good news for sellers. As we move into the spring market, more potential buyers will find a limited number of homes for sale putting upward pressure on prices.
*University of St. Thomas Minneapolis Residential Real Estate Index