It’s getting pretty close to the end of the year so it’s about time I try to figure out what happened in 2011 and what’s gonna happen in 2012. At least in real estate, I have no idea about anything else, just ask my wife.
Let’s start with the big picture, the Greater Twin Cities Area. The trend all year has been toward fewer new listings entering the market and more closed sales. Generally speaking, this should cause prices to rise, but just the opposite is happening.
There are 16% fewer listings active listings on the market right now than a year ago. And there are 7% more sales in the same period of time yet the average price is down nearly 8% and the median down 9.9%. Go figure.
But here is the interesting part of the story. Foreclosures and short sales are making up a smaller percentage of sales. Yes, they are still affecting prices, but not like they had been in the past. Eighteen months ago S&F sales accounted for 35% of sales at my company, Independent Brokers Realty. This year they constitute about 28%.
The last few months are really showing some dramatic improvement along the same lines. Sales are up 32% from a year ago at this time and there are 16% fewer listings. Inventory has dropped from 8.7 months to 6.2 months. Sooner or later this will affect prices in an upward direction.
That’s why I tell my buyers to buy now. Prices are stabilizing, especially in traditional sales. Rates are historically phenomenol and there are still deals to be had.
Sellers need to hold off until the Spring market or longer before they list. These improvements are slight and will take time to take hold. Real growth isn’t on the horizon yet and sellers still won’t get what their house used to be worth.
But I think the Chanhassen real estate market is poised for a better year than other markets. There were 24% more sales in 2011 than the previous year and the month’s supply of inventory dropped 27% in November. The days on market before a sale dropped 33% so we are ahead of many other markets and I expect this trend to continue.
Sorry for the lengthy, dry post, but it makes a good point. Buyers need to buy now and sellers need to wait until Spring before they list their homes with me.
Possibly related:
