The Star Tribune reported this week that the number of homes for sale in the Twin Cities declined for the third consecutive months.  Compared to one year ago, there are now only 21% more homes for sale.  For much of the year, we have been running with inventories between 40-45% higher than the year previous.

While that is encouraging news regarding the inventory, the number of buyers in the market is also lower now than it was one year ago.  Pending sales are down 15% and closed houses are off 21% from one year ago.

Given the disparity between homes for sale and pending sales,  there are approximately 11 homes for sale for each home that will receive a contract.

A market is considered in balance when there is a 5-6 months supply – not 11.