Written by Glenn Necklen
It's simple! We have a trifecta of positive figures for the three key indicators that make for a great seller market:
1. Lower unemployment figures.
Our jobs market has been gradually improving over the past several years. The current unemployment rate statewide in Minnesota is 3.8%, down from a great recession high of 8.1% back in June of 2009. That means more than half of the previously unemployed during the recent economic crash are now working again. More jobs means more home buyers in the market.
- The Bureau of Labor Statistics (www.bls.gov)
2. Steadily declining mortgage interest rates.
Mortgage interest rates have been low since the housing crash- that's no secret. However, since 2013 we've seen a steady decline from an average of 4.49% in 2013 to a current average of 3.6%. With more people working and lower cost loans, good things happen in the Real Estate world.
- MortgageNewsDaily.com May 2016
3. A low supply - high demand ratio.
The "Month's Supply of Homes for Sale" or supply demand ratio is the inventory of homes for sale at the end of a given month, divided by the average monthly pending sales for the last 12 months. In a balanced market, this indicator is typically in the range of "5". As of April 30th, 2016, this figure was at 2.6 - down 20.5% for the previous 12 month average. This, coupled with listing inventories shrinking by 12% averaged over the previous 12 month period, makes for a significant increase in demand. Thus, the Twin Cities year-to-date average sale price has increased 4.6% over the calendar year 2015, to a current average of $262,742.
- The Minneapolis Area Association of REALTORS Monthly Market Report April 2016.
This all stacks up to a great seller market - making things challenging for home buyers. The numbers tell the story!
Glenn Necklen is Broker / Owner / Realtor at Necklen & Oakland- Professional Real Estate services in Maple Grove, MN.