Twin Cities Real Estate Market Update – Week of December 1, 2008
This week’s Twin Cities report from the Minneapolis Area Association of Realtors will not help those trying to stay in close contact with the trends given that Thanksgiving fell on different weeks last year vs. this year. You can see Jeff Allen’s note below with the explanation.
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Given that I did not publish the report from the previous week, I will put that in to this post as well. You can find last week’s information and data at the bottom of this blog post.
Comparing weekly activity for the next two weeks will be mostly worthless for one simple reason. Thanksgiving occurred a week earlier in 2007 than it did in 2008, and the expected downward swoon which takes place during the turkey holiday makes year-over-year comparisons difficult. For instance, our numbers this week state that new listings and pending sales for the week ending November 22, 2008 are up 36.5 percent and 74.5 percent over the same week last year, respectively.
Yowzers! This isn’t indicative of an actual huge upswing in activity but rather the vagaries of where Thanksgiving lies in any given year. Expect next week’s report to show a ludicrously massive downward decline relative to last year for the same reason.
For perspective, comparing the week before Thanksgiving in 2007 to the week before Thanksgiving this year shows a trend very similar to what we’ve been experiencing in recent weeks.
This week’s edition of the MAAR Weekly Market Activity features an updated Supply-Demand Ratio (SDR) for December 2008 of 12.06, which means there will be approximately 12.06 homes for sale for every buyer in December. This is down 16.1 percent from December 2007.
I’ve pulled out one of the important charts for sellers to be aware of that pricing still remains very difficult. Sellers are now only receiving 91.3% of their original asking price at sale. (Click on picture to enlarge)
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Below is the weekly report from last week – November 24, 2008.  Some of the key highlights were:
- Overall listing inventory remains down 9% compared to a year ago
- 41.7% of the new listings were lender mediated (distress sales)
- 53.5% of the pending sales activity involved lender mediated properties
For 19 weeks out of the past 20, pending sales have been higher than during the equivalent week in 2007. There were 649 pending sales for the week ending November 15, up a healthy 19.1 percent from the same week last year. Of these newly signed purchase agreements, 53.5 percent were for lender-mediated foreclosure or short sale properties and 41.9 percent were listed at $150,000 or below. Over the last three months, there have been more than 25 percent more pending sales than during the same time in 2007. A healthy portion of these sales have been in the lower price ranges.
On the supply side, the inventory of homes for sale currently sits at 29,365, which is 9.0 percent lower than this time last year. New listings for the most recent reporting week were 9.0 percent lower than a year ago, and only 41.7 of new listings were lender-mediated.
The fact that a much higher proportion of sales are lender-mediated (53.5 percent) compared to new listings (41.7 percent) is an indication that foreclosures and short sales are not languishing on the open market. Although we still have a ways to go, this is a hopeful sign. The sooner the lender-mediated inventory is absorbed, the sooner our market can return to a traditional recovery process.
