There has been a lot of talk lately of a shifting real estate market, and while there isn’t a significant shift to a buyer’s market yet there are signs the strong seller’s market we have been experiencing for the last few years is starting to soften.
I consider the months supply of inventory one of the biggest indicators because it factors in both the number of homes for sale and the rate at which they are being sold. September 2018 had a 2.5 month supply of inventory, similar to this year’s summer months. But when you compare September 2018 months supply to other years you can see that while there is still a year-over-year drop, that drop has been getting smaller. Except for the anomalies of 2010 and 2014, months supply has dropped every year for the last 10 years with this year’s drop the smallest.
New listings were ahead of last year for the third month in a row in September 2018… will be interesting to see if the trend continues.
Closed sales were down 5.8% compared to last September, about the same percentage that new listings were up. Pending sales, the predictor of of closed sales to come, were down only 1.8% compared to last year.
Median sales price continued to rise, with September prices 6.1% over last year. Average percent of list price received was only 0.3% over last year… no longer over 100% as it was this summer. Days on market before sale was only about 6 weeks.
Inventory continued to drop, but September 2018 was only 4.4% below September 2017. You can see from the humps in the supply chart above how the change is slowing down.
Looking at months supply of homes by price range, prices below $250k still show a strong seller’s market with supplies under 2 months. Price ranges $350k-$500k show a moderate seller’s market and prices $500k-$1M are showing a balanced market with a 6-month supply. Prices over $1M remain a buyer’s market.
Overall, townhomes continue to be in shortest supply.
While we are still in a seller’s market, there continue to be indicators we are moving towards a more balanced market and rising interest rates won’t help. That could be considered a good move to more sustainability.
The figures above are based on statistics for the combined 13-county Twin Cities metropolitan area released by the Minneapolis Area Association of Realtors.
Never forget that all real estate is local and what is happening in your neighborhood may be very different from the overall metro area.
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