Twin Cities Real Estate Update for June 2019
This update for the Twin Cities real estate market is from the Minneapolis Association of Realtors. The data is for the 16 county metro area, and for all price ranges and all property types (single family, condominiums, town homes, new construction and existing homes).
As expected, the Federal Reserve did not change their target range for the federal funds rate at their June meeting. Although the economy is still shuffling ahead with low unemployment and solid retail sales, uncertainty remains regarding trade tensions, slowed manufacturing and job growth, weak business investments and a flattening yield curve. New Listings in the Twin Cities region decreased 3.1 percent to 8,473. Pending Sales were down 2.9 percent to 6,305. Inventory levels fell 1.3 percent to 12,063 units. Prices continued to gain traction. The Median Sales Price increased 7.2 percent to $290,000. Days on Market remained flat at 40 days. Absorption rates were even with last year as Months Supply of Homes for Sale remained flat at 2.5 months. Real estate markets across the country are performing well in an economic expansion that will become the longest in U.S. history in July. However, there are signs that expansion is slowing in the Twin Cities real estate market. The Federal Reserve considers 2.0 percent a healthy inflation rate, but the U.S. is expected to remain below that this year. The Fed has received pressure from the White House to cut rates in order to spur further economic activity, and the possibility of a rate reduction in 2019 is in play following a string of increases over the last several years. Even so, mortgage rates remain remarkably attractive. Inventory, however, remains a sticking point.
Housing Supply Overview
After several years of declining inventory and supply, more and more housing markets are beginning to find their way toward a state of balance in terms of available listings. There is still work to be done, but the situation is not as dire as it once was. For the 12-month period spanning July 2018 through June 2019, Pending Sales in the Twin Cities real estate market were down 1.8 percent overall. The price range with the largest gain in sales was the $1,000,001 and Above range, where they increased 13.8 percent. The overall Median Sales Price was up 6.7 percent to $272,000. The property type with the largest price gain was the Condo segment, where prices increased 11.5 percent to $182,900. The price range that tended to sell the quickest was the $190,001 to $250,000 range at 35 days; the price range that tended to sell the slowest was the $1,000,001 and Above range at 166 days. Market-wide, inventory levels were down 1.3 percent. The property type that lost the least inventory was the Single-Family segment, where it decreased 1.1 percent. That amounts to 2.7 months supply for Single Family homes, 1.7 months supply for Townhomes and 2.1 months supply for Condos.
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