Weekly Market Activity Report

The Twin Cities housing market is well into its annual winter holiday pause. New listings have been minimal, yet total inventory of homes for sale remains at record levels and the number of sellers continues to far outweigh the number of buyers. Conservative lending standards and decreased consumer confidence seem to be keeping home buyers away despite low mortgage rates, motivated sellers, improved housing affordability and great housing stock.

Over the last three months, newly signed purchase agreements have declined by 20.0 percent from the same period in 2006 and 34.3 percent since 2005. Meanwhile, new listings have declined by only 1.8 percent. The number of homes for sale has dropped 5,000 units in the last 12 weeks but remains 12.9 percent higher than this time last year.

The forecast calls for improved buyer activity, but it will likely take more than a year of gradual increases before comparisons to today's buying market are quantifiable. MAR is creating a 2007 summary and 2008 outlook of the Twin Cities housing market as part of our Residential Real Estate Summit to be held on Wednesday, January 16, from 8:00 a.m. to noon at the Earle Brown Heritage Center, 6155 Earle Brown Drive, Brooklyn Center.

Weekly Market Activity Report

Home sales perked up for the week ending December 1, as buyers returned following their annual football-and-turkey Thanksgiving holiday. While the number of newly signed purchase agreements (pending sales) grew to 533, it was still behind the same week last year by 10.6 percent. The total inventory of homes for sale continues its seasonal drop, with 4,000 fewer units on the market now compared to eight weeks ago.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for several key metrics:

Average Days on Market Until Sale increased slightly to 148, a growth of 12.4 percent from one year ago. This figure should continue to grow through December before dropping in the first part of 2008 as more buyers return to the market.
The Percent of Original List Price Received at Sale dipped to 92.4 percent, indicating that seller willingness to negotiate continues to grow.
Mortgage Rates for the Twin Cities region fell slightly again to 6.2, which is having dramatic and positive effects on affordability.
The Housing Affordability Index (HAI) increased to 141 due to falling mortgage rates and home prices. This is the highest HAI mark since February 2005 and, if sustained, bodes well for the long-term health of our market.
Months Supply of Inventory decreased to 9.3 months, as seasonal declines in the number of homes for sale temporarily restrict inventory choice during the holiday season.

Weekly Market Activity Report

As expected, we are continuing to see a decline in home sales in the Twin Cities housing market. For the week ending November 24, there were 329 newly signed purchase agreements (pending sales), a decline of 32.2 percent from the same week last year. The severity of this sudden decline is abnormal enough to imply a statistical fluke caused by a small sample size and the vagaries of a major holiday week. How the market performs next week will provide a good indicator of its true direction.

This week's edition of the Weekly Market Activity Report features an updated Supply-Demand Ratio (SDR) for 2007. The figure increased to 13.44, which means that there are 13.44 homes on the market for every buyer in the month of December, an increase of 34.1 percent from last December. The SDR rises each year in the final months due to the dramatic decline in holiday season home buyers. [where: 55405]