Is it possible that we're FINALLY stablizing? The most recent market update would point that direction...
Below is taken from Edina Realty's monthly market update:
This month’s Market Update will be composed in haiku:
Fewer homes for sale
Sales activity rises
Balanced market looms
Okay, so maybe it’s not quite that simple, but sometimes it does help to break things down to their most basic elements. Now let’s do a more thorough analysis of July’s numbers and the impact the recent credit rating downgrade could have on housing.
According to the Minneapolis Area Association of Realtors (MAAR), new listings in the Twin Cities were down by 16.1 percent (a trend true for six of the past seven months), and pending sales were up 42.7 percent. Overall, the inventory of homes for sale has decreased 18.8 percent, which is great news for balancing the market. On that note, absorption rates improved as the months’ supply of inventory came down to 7.6 months, meaning it would take 7.6 months for all of the properties currently on the market to sell at the current rate of sales. A supply of around five to six months is considered a balanced market.
But what does that mean? Well, in real estate, we are always operating in one of three market types: a buyer’s market, a seller’s market, or a balanced market. The buyer’s market favors the buyer and is what we’ve been in for the past six years (sellers tend to make more concessions, cut prices, etc. in a buyer’s market). However, we finally appear to be trending toward a more balanced market where buyers and sellers will find themselves on a more level playing field.
So what about the recent credit rating downgrade’s effect on housing? It remains to be seen. While we don’t expect much of an increase in interest rates in the near future, job growth is still in the driver’s seat when it comes to a full recovery. Since July’s labor market posted strong gains, we’re hopeful it will continue to have a positive impact on our local housing market.
-Reprinted from Edina Realty's Market update...
