December 2015 Twin Cities Real Estate Market Update
It was quite a year for residential real estate. Housing demand surged to a 10-year high while listing activity only reached a 5-year high. Buyers were inspired by low interest rates and an improving labor market. More sellers listed property for sale than any year since 2010, but not enough to replenish inventories in any meaningful way. Twin Cities home prices are within 5.0 percent of their prior peak. Sellers are yielding the greatest share of their list price since 2006 as the affordability picture has remained stable.
New Listings in the Twin Cities region increased 1.2 percent to 2,601. Pending Sales were up 12.3 percent to 3,218. Inventory levels fell 21.8 percent to 10,166 units.
Free 2015 Annual Market Report (click here)
Prices continued to gain traction. The Median Sales Price increased 9.9 percent to $219,900. Days on Market was down 12.4 percent to 78 days. Sellers were encouraged as Months Supply of Homes for Sale was down 34.4 percent to 2.1 months.
There are plenty of reasons to be optimistic in 2016. The U.S. economy remains a somewhat lonely shining star on the global stage. Job and wage growth are both accelerating. The Twin Cities has the lowest unemployment rate of any major metropolitan area. Low energy costs have also translated into an effective pay increase for millions of Minnesotans. Residential real estate is once again leading the charge toward full recovery. In addition to an election cycle, the pace of interest rate hikes, inventory improvements, new construction activity and the financial health of the consumer will be key indicators to watch this year.