The supply of homes available for sale in the Twin Cities is broken down by price range on the Minneapolis Realtors Association Monthly Housing Supply Outlook report. The report for May 2010 is shown above and breaks down the available listings by significant price breaks.
Analysis
A balanced supply of homes is considered 5-6 months. What that means is that if no other homes came on the market (new listings) it would take 5-6 months to sell all of the existing listings based on the projected sales. If the supply is more than 6 months it’s a buyers market, less than 5 months it’s a sellers market and 5-6 is a balanced market. Based on the above report we can see a number of important things -
- The supply of homes in each price range has been trending downward for every price range except $1M plus as compared to a year ago
- There is actually a shortage of homes in the least expensive price range. This is partially because fewer bank owned properties are coming on the market and partially because the Homebuyer Tax Credit helped push a lot of buyers into the buying inexpensive homes.
- In the middle price points ($150k – 250k) it’s really somewhat of a balanced market.
- In the $350k-$1M price ranges the average time on market starts to get quite long – even longer than the average listing period of 6 months
- Finally, if you have a $1M+ home, be ready for a very long time on market as there are way more homes than buyers in this price range.
Conclusion
One of the things a Realtor must do is set expectations for their clients regarding the state of the market and what to expect in the sale of their home. Having a house for sale is a stressful time. There’s the constant battle to have a home ready to show on short notice and the dreams of selling to fulfill the goal of moving on to the next place. Providing good information to clients around the state of the market is something can expect from bill.wallace@results.net
