Minneapolis, Minnesota Real Estate Market: Bottom in Sight!

Signs of the Bottom

They say you don't know the bottom until you reached it. Real Estate markets move slowly, however, and the bottom of this market won't come up and slap us across the face, rather it will slowly emerge and turn into recovery over a 2-3 months time.

I see the bottom, and feel it as well. It's clearly visible in the current market stats, and I hear it at open houses, in the calls I receive and in the activity on my listings.

The market stats for the past few weeks have been really nice. New listings are down and pending sales are up. The Twin Cities real estate market has fit bottom and is poised for recovery!

Point 1: Fewer New Listings = Reduction in Supply

The number of new listings in 2008 has been dramatically less than last year. We are still over supplied with more homes for sale than there are buyers for, however, the single most important factor for a recovery in the Minneapolis real estate market is a reduction in the number of homes for sale.

The graph above shows the decline the number of new listings each week, compared to last year.

Point 2: Sales Active Decent

I'd love to say, "sales are great, everyone's buying, get going!" but the reality is sale are just OK. The number of sales this year has been slightly less than last year each week. I predict that in coming weeks we will see sales activity rise higher than the same week last year.

With sales in a stable, while slightly depressed, pattern and the number new listing dropping, the overall number of homes on the market is falling.

Inventory has been higher every week (compared to the same week in the prior year) every year, for as long as I can remember. We may be on the verge of a historic change, however, for the first time in years, the total number of homes for sale in the Twin Cities, Minneapolis and St. Paul real estate market may, in the next few weeks, drop below the number from the same time last year!!!

If that is right, we will have fewer homes on the market that last year! (Do you smell the recovery coming?)

Stay tuned to see if these predictions are accurate. Happy House Hunting!