Tara O'Brien's Minneapolis Real Estate Update: March 2011

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MinneapolisCondosTaraOBrien

The week ending March 19 showed a 16.6 percent decline in Pending Sales from the same week last year and a 36.9 percent decline in New Listings.
With a little imagination, spring is in the air. Buyer activity has been gradually on the rise for most of 2011 as prospective buyers seem to prefer sporadic puddles to insurmountable snowbanks. Compared to last year's incentive market, however, the year-over-year declines in purchase activity have been growing as well.
The number of Active Listings for Sale has remained remarkably stable thus far in 2011. In 2010, inventory levels had fluctuated by more than 6,000 units from the first of the year. That volatility has been tamped down below 1,000 units so far this year. With no additional purchase incentive in the pipeline, this should bring supply-side improvements and price stability as demand returns to historically reasonable levels.
-maar

MinneapolisCondosTaraOBrien

For the week ending March 5, there were 717 signed purchase agreements, a decline of 11.4 percent from a year ago when the market was stimulated by the federal home-buyer tax credit. Over the last three months, there have been almost 900 fewer signed purchase agreements than during the same period a year prior.
On the supply side, sellers brought 1,845 new homes onto the market, or 19.0 percent fewer than the same week last year. The three-month average pace of listing activity was 16.6 percent slower than it was a year ago.
Despite the decline in supply, there are a few other metrics that indicate challenging conditions remain for sellers. The Average Days on Market Until Sale currently sits at 157, up 16.1 percent from a year ago. Similarly, the Percent of Original List Price Received is down to 88.2 from last year's mark of 93.2.
In essence, in an environment where it takes homes longer to sell, sellers should be focused on proper pricing and preparation if they want a faster sale. Although there are fewer new listings, smart pricing and marketing are more important than ever.
-mplsrealtor.com

MinneapolisCondosTaraOBrien

The gap between current and year-ago listing activity continues to widen, as anticipated. Expect the supply-side numbers to show sizable year-over-year declines due to the high baseline set during the spring 2010 tax credit. It should be noted that we are now approaching a period where we’ll be comparing the 2011 non-tax credit market to the 2010 tax credit market at its peak level.
For the week ending February 19, there were 690 signed purchase agreements, which made for a 12.1 percent decline from the same week last year. There were 1,367 New Listings for the week, representing a 25.4 percent decline from a year ago. Active Listings, at 21,642, have been holding steady since the beginning of the year due to subdued seller activity coupled with fairly reliable sales volumes. That marked a 3.3 percent decline from year-ago inventory levels.
A more meaningful comparison is to look back at 2009 and 2008 and avoid tax credit stimulated activity. This week's 690 Pending Sales fall right in between 2008 and 2009 numbers. While that is less buyer activity than we would like, it does provide hope for the future.
-maar