Well, the numbers are showing that since the tax credit expiration, that buyer activity has slowed down some. In the last week, there were 600 purchase agreements signed which is 34% less than the same week last year. That means last weeks decline in pending sales was the 4th week in a row it declined when you compare it to year-over-year sales.
New listings being added to the market was also on the decline though. That measurement was 6% less than the same week last year. The nice part about that is that the average time on market is shrinking with the current inventory. It sits at 118 days between time listed for sale and the time a purchase agreement is produced. This is certainly better than the 159 day average of 2 years ago for the same time period.
Supply-Demand changed some as well. For every buyer looking for a home right now, there are 5.05 homes on the market. Last year during the same time frame, there were 4.55 homes per every buyer. The current supply is at 6.7 months. What that means is that if no new listings came on the market, it would take 6.7 months for all the current inventory to be purchased. Last year that ratio was at 7.7 months, so we have shaved an entire month of the inventory supply figure. For comparison, a balanced market will have between 5 and 6 months supply.
The Skinny provided by Minneapolis Area Association of Realtors may have said it best when they forecasted “Mostly stable with a chance of recovery” for the Minneapolis real estate market. Due to the “would be buyers” looking to buy over the summer being nudged to purchase early, chances are good that this summer will be pretty quiet in real estate sales.
It appears we are in the middle of a cruel game of ping-pong with Mortgage Insurers as one of the Nation’s largest insurers announced that “UG has just been notified that on June 14th, 2010, the following areas in Minnesota will be put back on the Moderately Declining Markets list: Twin Cities, Rochester, St. Cloud and Duluth.” What that means that if you need to purchase MI as their LTV is higher than 80%, they will have to pay anywhere from .02 to .05% more for that MI. Contact me if you have questions on this.
Mortgage rates are still great and amazing – please contact me for any specific quotes you need. Rates finished last week a bit lower than where they had started, due to a disappointing jobs report last Friday (you likely heard about it). Investors had expected stronger results from private sector job growth, and the stock market fell after the news. Weak labor market figures generally lead to lower inflation and are favorable for mortgage markets (investors generally move their money into the safe haven of bonds, which in turn helps mortgage rates).
So, where does that leave us? With some mighty fine mortgage rates for Minnesota real estate! We’ll take these great rates as long as they last! If you still need to refinance, or know someone who could benefit from a refinance, now is the time to check it out! We’d be delighted to run some numbers for you. If you are looking to take advantage of the low sales prices on Minnesota real estate, click here to get started on your mortgage prequalification.
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