Minneapolis Area Association of Realtor’s weekly real estate market update reports shows continued year over year increase in pending sales, decrease in new listings and lower inventory.
In the Twin Cities region, for the week ending March 17:
• New Listings decreased 1.3% to 1,406
• Pending Sales increased 23.1% to 1,029
• Inventory decreased 27.5% to 17,088
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Inventory of homes for sale is now all the way down to 17,088, a 27.5% drop year over year. These levels of inventory have not been seen since 2004. I am anticipating the spring build up of inventory, but it has not happened yet.
This is a huge step in market correction. This alone will not correct the market, the economy on a whole needs to kick it in gear. Jobs create housing demand. We saw lower unemployment rates in Minnesota, yet if you look at the number of jobs – we are at 2004 levels which ironically enough is where we are at for inventory of homes for sale. If the employment situation improves, this inventory will get lower and lower and will drive the need for new construction to add inventory to the market. We are at the point where adding more inventory makes sense again in strategic locations and price ranges.
So keep an eye on gas prices, employment figures and inflation. These will be a few of the leading indicators on housing demand.
The “shadow inventory” of foreclosures looming is very unlikely to hit this year. There are some good arguments on why this “shadow inventory” may not hit the market at all. I don’t believe this will hit this year, but I believe we will begin to see this inventory some time next year.
So if you have been wanting to sell, now is the time to put your home on the market.
- Twin Cities Weekly Real Estate Market Update: March 19, 2012 (craigkamman.com)