Local Real Estate News
It’s been almost 3 months since the expiration of the federal home buyer tax credit and the market appears to have settled into something of a rhythm. With the dust settling, pending sales have become mostly fixed in the 500-to-600 per week range for the past 9 weeks.
While the dramatic drop from a year ago is certainly not positive, demand is at least holding relatively steady for the time being. The 626 purchase agreements signed for the week ending July 17 were 39.7 percent behind a year ago.For the same reporting week there were 1,618 new listings in the Twin Cities, down 10.0 percent from a year ago.
Inventory is rising due to slower demand. The 27,350 homes currently available for sale represent an increase of 4.8 percent from last year.
For the week ending July 10, the number of pending sales held steady with the week before but remained well behind last year's pace. The 545 signed agreements during the week represent a drop of 45.9 percent from last year at this time. That's the tenth consecutive week of year-over-year declines in buyer demand, a period that coincides with the loss of the federal tax credit for first-time home buyers.
The 1,542 new listings for the most recent reporting week are also down compared to last year but not to the extent of pendings, posting a decline of 17.4 percent from a year ago.
Inventory is up 4.4 percent from a year ago. Because the growing inventory is being greeted with slim buyer demand, the balance of buyers and sellers is shifting the market back in the buyer's favor. The July Supply-Demand Ratio of 7.44 means that there are 7.44 houses for each buyer this month, up 46.9 percent from the mark of 5.06 seen a year ago.
The post-tax credit malaise continues as the Twin Cities housing market comes to grips with the new normal. Pending Sales for the week ending June 26 were down 47.6 percent versus 2009 numbers from 1,121 a year ago to 587 now. New Listings are also down from a year ago, though not to the same extreme as Pending Sales, only dropping 6.5 percent from a year ago.
With demand weakening faster than new supply, the inventory of available homes is starting to grow. The current count of 27,526 homes is 3.2 percent higher than at this time last year.
The slight growth in total inventory is happening in the face of dropping demand, which means that the balance between buyers and sellers is shifting back in the buyer's favor. This is reflected in July's Supply Demand Ratio of 7.44, which was a ginormous 46.9 percent over last July and means that there are 7.44 homes available for each buyer during the month of July.
Pending sales in the Twin Cities housing market trended up for the first time in four weeks but remain substantially below 2009. For the week ending June 12 there were 674 signed purchase agreements, up from the mark of 527 the prior week but down dramatically from the mark of 1,210 seen during the same week a year ago.
This may be a sign that the drastic drops in sales seen in May and early June were simply temporary aftershock reactions to the tax-credit build up and that demand will slowly return over the course of the summer, but it’s far too early to say that with any certainty. We’ll be keeping a close eye on the numbers each week.
New listings moved upward for the same reporting week to 1,729, but remain 12.2 percent behind last year at this time. However, inventory has slowly climbed due to the decline in pending sales, currently sitting at 26,990 active listings, an increase of 1.1 percent from a year ago.
Remember how we've been saying that the Twin Cities housing market has been getting successively slower in home sales every week since the tax credit ended? Umm, yeah, well that's still happening.
Pending sales for the week ending June 5 were 57.0 percent behind the pace seen a year ago, dropping from 1,226 in 2009 to 527 today. This is the fifth consecutive week-to-week drop in signed contracts. While activity is down across the board, lender-mediated foreclosures and short sales are slowly increasing their market share of sales because traditional home sales have declined sharply. During this week last year, 37.8 percent of pending sales were lender-mediated; this year the share is 43.3 percent.
Thankfully, new supply is not growing in lock-step. The 1,521 new homes placed on the market for the most recent reporting week were 29.6 percent less than last year at this time. This has helped keep the Months Supply of Inventory metric at 6.9 months, down 9.3 percent from May 2009.
As the weeks following the tax credit expiration unfold, buyer demand continues to slow. The 600 purchase agreements signed for the week ending May 29 were 34.6 percent below the previous year—the fourth consecutive week of year-over-year decline in Pending Sales.
Refreshed supply is also in decline, as New Listings posted a fifth consecutive week of year-over-year decline, landing at 1,474 for the most recent reporting week—a 5.9 percent decrease from a year ago.
Two other metrics for this week:
Days on Market – This stat continues its year-over-year downward trend, resting at 118 days for May 2010.
Percentage of Original List Price Received – This continues to grow, up 2.8 percent above last year at this time to 94.1 percent of the list price.
As expected, pending sales continued their post-tax credit deadline swoon in the Twin Cities housing market for the week ending May 15. There were 830 purchase agreements signed for the week, a large drop from the mark of 1,469 seen two weeks ago during the final week of the credit. The most recent week represents a 32.8 percent decrease from the same mark last year.
New Listings are also in decline, with the 1,582 posted for the week coming in at 19.3 percent behind a year ago. The decline in new supply is helping to offset some of the decline in sales, which is serving to hold inventory relatively steady for the time being.
It remains to be seen whether the large drop in activity is a temporary post-credit blip or a harbinger of a longer-term demand cool down. We'll continue to keep a hawk's eye on the numbers in the weeks ahead.
The expiration of the tax credit clearly motivated buyers to take action by April 30. Last week, there was a significant 31.2 percent jump in Pending Sales versus last year, bringing the total number of contracts written to 1,469. But for the first time this year the number of New Listings was down. A total of 1,803 of them entered the market, 11.5 percent lower than a year ago.
Some encouraging figures include a Days on Market count of 127, down 15.3 percent compared to last year, and Percent of Original List Price Received at Sale of 93.6 percent, up 4.0 percent over last year.
We expect buyer activity to continue over the coming weeks, although not with the same level of urgency due to the expired tax credits and a slight seasonal lull before we get into the heart of summer.
