So… The median sales price in the Twin Cities is up 7.2% since last year and the days on market are down 17.9% to an astounding median of 23 days across the Twin Cities… Yet, we are noticing lots of price adjustments and concerned sellers in many areas around our metro area. What is going on?
Well, a couple of thoughts exist in these types of shifting markets. We could be experiencing a slight shift due to the time of year; we always see a little slow down in the fall market which makes it a slightly less stressful time to make a move. The other option? Perhaps we have hit the top and we require a correction. Now, I don’t have the crystal ball; however, a careful look at history as well as current statistics can shed a little light on what we are looking at into the future of our real estate market.
New listings in the Twin Cities hit a low point this April that we have not seen since April of 2014. Although we appear to be going in the right direction (up) where inventory is concerned currently, the builders are building at price points that first-time home buyers cannot generally afford.
So, where are the first-time home buyer homes? Well, the number of new listings priced lower than $190K are down 26.2% this year! The law of supply and demand says that with low inventory, prices go up, right? One factor that we need to remember, however, is affordability. If prices hit a point where it no longer makes sense for first-time homebuyers to buy, we will see a decline. Is it now or is it next year? I cannot say for certain. Looking back in time, we can see the numbers to support any hypothesis, and yet it sure looks like we are getting to the point where affordability will be an issue in our market.
For a deeper analysis on how YOUR home is affected by a shifting market, give us a call! Every property and every micro market is unique and we can help you understand what the best plan will be for your move. Happy to help!