A little breathing room!
If you are a buyer OR a seller, I think you’ll be happy with what is happening right now.
Today I just have a quick update on the Twin Cities real estate market for July 2021, including how the market has changed in the past month and what kinds of offers are being accepted by sellers right now. I LOVE this particular bit of data, it’s SO valuable to see in a higher level view of what types of offers are being accepted. This information started being sent out to us in early spring and while every transaction is different, the trends in offers are enlightening.
After a steady climb in home prices since the beginning of 2021, we are seeing the market flatten out a bit.
The median single family home price for the Twin Cities region stayed nearly level (it actually declined by a whopping $100) at $379,900.
The same can be said for townhouses which are at $259,900 down $100 from $260,000 last month.
Condos in the area that showed a legitimate dip in price, from $203,500 down to $200,000. $3000 isn’t a lot of money n the scheme of things but at that price point, that represents a decrease of 1.5%.
We are seeing an uptick in the number of months supply of single family homes, at one point early this year we were down to a couple of weeks worth available home which actually means that things were selling in a couple of days, usually taking offers on the first day and through the weekend and then being in some sort of contingent status for a period of time.
We are now up to 1.2 months supply. For context we consider it a balanced market at 5-6 months of supply, and the lower the number the more it favors SELLERS. So while we are coming out of that very painful time for buyers to some degree, it is still a seller’s market in the Twin Cities region.
For the macro view comparing todays market to a “normal” market (pre-Covid):
Showing activity, which is a measure of demand, dropped 8.0 percent overall, but not across the board! Some segments of the market have increased interest. For example, listings above $300K saw increased showing activity compared to the same time period in July of 2019.
Sellers haven’t been quite as active as they were – listings are down 21.8 percent overall.
This doesn’t hold true for every price range! Homes listed between $500-750K saw a 27.5 percent increase in supply of new listings compared to 2019 while listings priced above this category also saw increased supply on average.
Buyer activity, which was regularly skyrocketing in the first half of this year, has since calmed to follow a more stable pattern of demand, which is a big relief for buyers in general. Will there still be multiple offers? Quite possibly if the home is priced properly and in good condition. However, when sellers try to price at the top of the market it can backfire.
Overall pending sales are level with two years prior, but every price point has a distinct market of its own.
Listings below $250K saw decreased demand, down at least 29.7 percent. This could be due to the uneven job loss disproportionately hitting this with lower incomes.
Homes priced above $350K saw increased demand, up at least 44.8 percent or greater.
As of the end of July, the 30-Year Fixed Rate Mortgage Average in the United States remained at 2.8 percent – still super low!
Now lets take a look at the types of offers being accepted by sellers most recently.
I love looking at this over time because earlier this year it was like a bacchanalian feast for sellers and being sent to into the coliseum in Rome to fight for survival for buyers.
This data is provided to agents by the Minnesota Transaction Coordinators Company that helps agents across the metro process and manage transactions.
The current Offer Acceptance Rate is 55% – earlier this year we were hovering around the 30% mark and that was an exhausting place to be for buyers, especially those that had any contingencies at all.
The current Cancellation Rate on purchase agreements is 8% (mostly during the inspection timeframe).
Inspections are being Waived about 34% of the time. This is also a major improvement over earlier this year when we were seeing rates close to 50%.
I’ll reiterate something I’ve said in the past – I think an inspection is a really important thing for buyers and sellers AND their agents. It protects everyone.
Pre-market sales (private, off market) are UP to 6.60% after a steady couple of months in decline.
Average Purchase price to List Price: 102.5% – still a little low for where we’ve been this year. So you’re likely not going to get a big discount on a home, but it was OVER 105% earlier this year. This stat is still good for sellers and shows things getting a little better for buyers.
How are people financing their purchases?
Cash has increased to 14%, Conventional loans are down a little to 71%, FHA has increased to 8% (what a great thing to see for first time buyers!) VA is up slightly to 4%, USDA loans are at 2%, Other 1% (contract for deed?)
One of the most heartening pieces for buyers is that Seller Paid Closing Costs are included 26% of the time – the highest it’s been since March and it looks like these are genuinely being paid by the seller because the Average Purchase price to List price for SPCC included sales is 100% and only 17% of these waived the inspection.
Home Warranties included in the contract are at 8.12%
Purchases Contingent Upon the Sale of the Buyer’s Property: 10.15%
OK – I have been saying every month to avoid this if possible and I still maintain that is the best course of action but the trends don’t lie. Sellers are accepting this more and more.
Thanks for stopping by!