RISMEDIA, July 7, 2010—According to the recently released Twin Cities Seasonal Trend Report for Summer 2010, all signs point to the 13-county metro real estate market continuing to strengthen as the summer progresses.
The report, which surveys seven real estate brokers from the four corners of the metro market–Eagan, Chanhassen, Rogers and White Bear Lake–takes a look at the market from both buyers’ and sellers’ perspectives. And no matter the region, things are looking up after a fevered rush to beat the tax credit deadline, which has recently been extended until September 30, 2010.
Similar to the last tax credit expiration, the seven brokers noted that there was a week or two of slowed activity in late April, but as Mike Vanderheyden, agent with RE/MAX Specialists in White Bear Lake notes, “Our sales boards and numbers look really healthy for May.”
Bill Foster, RE/MAX Action West agent out of Chanhassen was less bullish about the early summer, but foresees a strong recovery in the later Summer months, adding that “the Twin Cities housing market needs a little time to normalize before picking up.”
Several factors point to a continued strong market for buyers, but suggest that the market might be shifting: the Twin Cities housing market is in recovery mode and making decent strides toward a balanced market with inventory just trickling on, media home prices eking up and interest rates staying level.
Mortgage rates have been very stable for the past few months, remaining at 5.4% since late winter, but none of the brokers feel confident that rates will remain this low for very long. As RE/MAX Action West agent Joe Welu says, “the general opinion is they’ll go up at some point in the future; it could be a month from now, it could be a year.”
While median sales prices continue to rise, they are still historically low. And with less foreclosure properties available today than a year ago, the 11% increase in median sales price can be somewhat misleading. Vanderheyden adds, “We’re still going to have some depression in the marketplace. In the past year, we’ve had some recovery—which is true and it’s all good, but what they don’t say is ‘here’s what’s coming.'”
What’s coming is more foreclosures, but exactly how many more, and in what form, is up for debate. In 2007 and 2008, when the subprime market bottomed out, there was a glut of foreclosures hitting the market, driving home prices way down. With ARMs resetting again this summer, we may be facing a similar situation.
Not so fast, says Brandon Hedges, RE/MAX Results agent from Eagan. “We thought there was going to be a massive influx of foreclosure listings this spring, but they’ve been trickling out, which helps our market, because it keeps inventory levels steadier.” With the market currently sitting at 6.7 months of inventory–suggesting a fairly balanced market–and foreclosures trickling rather than flooding in, the market figures to continue to stabilize and recover.
All this means buyers remain in the driver’s seat, but for how long isn’t exactly sure. And for sellers, good things should come to those who wait, as the market continues to stabilize and return to some sense of normalcy.
For more information, visit www.remax.com.