Although the weather isn’t heating up in the Twin Cities, the housing market certainly is! So what's fueling the ongoing market recovery? First, tightened inventory levels combined with strong demand are fueling price gains in many areas. Second, consumer demand is shifting from distressed properties to conventional homes. Third, record-low mortgage rates and rising rents are supporting housing recovery. Locally, new Listings in the Twin Cities region decreased 5%, pending sales were up 6.6% and inventory levels shrank 31%. Prices also moved higher. The Median Sales Price increased 17.4% to $176,000. Days on market was down 24% to 109 days. Absorption rates improved as the months supply of Inventory was down 40% to 3 months.
This is all good news for the Spring selling season but how long will this last? In my opinion, as long as interest rates stay low, distressed housing inventory stays low and consumer confidence remains strong then we should see this strong market continue for another 12 to 18 months.