Strong Competition in the Housing Market - Weekly Market Report July 1st 2023

Strong Competition in the

 Housing Market:

A Ray of Hope for Middle-Income Buyers

In recent times, the real estate market has become increasingly competitive, leaving buyers feeling the crunch when searching for their dream homes. However, amidst this challenging landscape, there is a glimmer of hope for middle-income households, who have been experiencing the strongest competition. Despite a shortage of homes in their price range, buyers earning up to $75,000 per year are still finding opportunities to secure affordable homes. In this weekly market activity report, we'll delve into the latest statistics, shedding light on the evolving real estate landscape and providing insights into the Twin Cities region.

Shortage of Affordable Homes:

The National Association of REALTORS® has highlighted the pressing issue of a shortage of homes in the affordability range for middle-income buyers. Currently, there is a deficit of approximately 320,000 listings priced up to $256,000 nationwide. This shortage directly impacts the ability of middle-income buyers to find suitable homes within their budget. In comparison to five years ago, when this group could afford half of all homes on the market, they can now only afford to purchase 23% of all listings nationwide.

Weekly Market Activity in the Twin Cities Region:

For the week ending July 1, the Twin Cities region witnessed fluctuations in key market indicators. While the number of new listings decreased by 18.0% to 1,185, pending sales also experienced a slight decline of 6.8% to 1,187. These changes reflect the ongoing challenges faced by buyers in finding available properties. Additionally, inventory levels decreased by 12.0% to 7,670, indicating a tightening supply in the market.

Monthly Market Insights:

Examining the month of May, we uncover further insights into the Twin Cities real estate market. The median sales price decreased by 1.3% to $370,000 during this period, presenting an opportunity for potential buyers to find properties at slightly reduced prices. However, it is important to note that the market remains highly competitive, and buyers need to act swiftly to secure their desired homes.

Days on market increased by 65.2% to 38 days, indicating that homes are staying on the market for a longer duration. This trend provides buyers with additional time to thoroughly evaluate their options and make informed decisions. Moreover, the percent of original list price received decreased by 2.9% to 101.1%, suggesting that sellers may be more open to negotiations, potentially offering buyers the chance to strike favorable deals.

Lastly, the months' supply of homes for sale increased by 35.7% to 1.9 months. This metric reflects the number of months it would take to sell all existing inventory if no new listings were added. The rise in supply indicates a growing availability of homes, albeit modestly, providing buyers with a slightly broader selection.

While the real estate market remains highly competitive, especially for middle-income households, there are promising signs in the Twin Cities region. Although buyers face a shortage of affordable homes, recent data shows a decline in median sales prices and an increase in the months' supply of homes for sale. These positive trends offer middle-income buyers renewed hope, as they now have a better chance of finding their dream homes at reasonable prices.

As we move forward, it is important for buyers to stay proactive, work closely with real estate professionals, and leverage market insights to their advantage. By remaining resilient and adaptable, potential homeowners can navigate the challenges of the current housing market and turn their dreams of homeownership into a reality.

Remember, even in a competitive market, opportunities abound for those who approach their search with determination and optimism.

Buyers:

If you're a buyer and have questions about the home buying process, be sure to download my Ultimate Buyers Guide.

Looking For A LOAN OFFICER? Check out Jane & Zach Johanns with New American Funding by  CLICKING HERE. You can even apply for pre-qualification right on the site.

Want to crunch some numbers before you buy? Try out my Mortgage Calculator  by clicking here!

Ready to start your home search?  Click Here To Get Started!

Sellers:

If you’re a seller, now might be the right time for you to put your home on the market. Wondering What Your Home Is Worth? I would love to help. Let's connect and set up a time to talk about your goals and plans for selling!