Twin Cities pending home sales up 18%

Twin Cities pending home sales up 18%

By: Brian Johnson December 11, 2015 1:07 pm

Pending home sales in the Twin Cities jumped more than 18 percent last month compared with year-ago levels, the largest increase since June, according to the Minneapolis Area Association of Realtors.

MAAR, which tracks residential sales in the 13-county metro area, said Friday that the Twin Cities saw 3,497 signed contracts for pending home sales, up 18.1 percent, and 3,785 new listings, up 11.5 percent.

Closed sales were up 1.3 percent to 3,343.

In other market indicators, the median sales price ticked up 7.3 percent to $219,900 and the median list price rose 4.6 percent to $229,995. Housing inventory fell 18.5 percent to 12,984 active units, MAAR reported.

MAAR attributed the sales increases in part to unseasonably warm temperatures, solid job and wage growth, favorable interest rates and strong demand.

MAAR President Mike Hoffman said the November numbers are consistent with the trends throughout the fall.

“There is a comfort in consistency,” Hoffman said.

Among property types, single-family houses represented the biggest gains, followed by townhomes and condos, MAAR said. Existing homes sales increased at nearly twice the rate as new construction.

Sales of homes priced at $400,000 or more increased 15.9 percent, but those in the $150,000-or-less category declined 19.3 percent.

Declining sales of lower-priced homes stems from a decrease in distressed homes on the market, said David Arbit, MAAR’s director of Research, Economics & Policy. The share of total sales classified as foreclosures or “short sales” fell to 11 percent.

Prices in specific locations – including St. Louis Park, Edina and southwest Minneapolis – have reached “record highs,” MAAR said. Half the homes in Edina sell for more than $400,000, while the median price in St. Paul is $168,000, Arbit said.

Sellers received 95.8 percent of their original list price, and homes sold more quickly in November. A typical home was on the market for 73 days, a 7.6 percent decline.

Meanwhile, strong market fundamentals bode well for home sales.

The unemployment rate in the Minneapolis-St. Paul-Bloomington metro area is 3.1 percent, according to the Bureau of Labor Statistics. That’s the lowest rate of any major metro area and well below the national level of 5 percent, MAAR noted.

Mortgage rates remain low at about 4 percent. Though a rate hike by the Federal Reserve is expected in December, changes in mortgage rates will be “slow and incremental,” MAAR said.

“With all but one month of 2015 in the books, we’re really starting to see how the year will stack up,” MAAR president-elect Judy Shields said in a statement. “Since consumer demand for housing has fully recovered, the seller component is still the missing puzzle piece.”

Permits for new housing units were up in November.

As previously reported, builders pulled 450 permits for 1,555 new housing units in the 13-county metro area and Rochester during the month, according to the Keystone Report. Permits were up 11 percent and units were up 80 percent from November 2014.

That total includes 414 permits for single-family houses, up 7 percent, and 1,141 planned multifamily units, up 139 percent.

Nov. 2015 % change from Nov. 2014 Year-to-date % change from 2014
Median sales price $219,900 7.3 $220,000 6.8
Closed sales 3,343 1.3 52,377 13.6
Pending sales 3,497 18.1 54,132 16.2
Days on market 73 -7.6 75 -3.8
% of original price received 95.8 1.2 96.7 0.9
Inventory of homes for sale 12,984 -18.5 N/A N/A

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