Today’s real estate market is kind of like my favorite pair of jeans.
You probably have a pair too. The kind you wear regularly; because they’re comfortable, easy. They always feel good.
But if you’re anything like me, there are times they aren’t. The waistband is suddenly tighter, somehow slightly uncomfortable. And I can’t remember where I overate, stopped exercising or fell off the healthy wagon, but I know, without question, things have changed.
The belt of the Twin Cities real estate market is getting a little tighter too. With active listings down 21.2 percent from last year, buyer’s are finding it harder to breathe. It’s not their imaginations. The supply of inventory has dropped from 10.5 months to 7.2 months. A balanced market, where everything’s even between buyer and seller, occurs at 5 months.
And that number may not be far off. The 1,012 signed purchase agreements for the week ending August 22, 2009, is a 23.7 percent gain over the same week last year. In fact, that week represents the 59th week of the last 60 with a year-over-year increase.
This duplex market seems to be packing on the pounds as well. There was a 26 percent increase in the number of pended sales from the same stretch last year, resulting in an average off-market price that was a whopping $20,012 higher than last year’s.
Of the 2009 properties that received offers, 26 percent were owned or negotiated by real people, as opposed to lending institutions. Last year for the same week, banks sat at the table on 96 percent of the transactions.
The amount of new inventory that came on the small multifamily market may result in us splitting our pants altogether in the not too distant future. The number of new listings for the week was down 43 percent over last year. Meanwhile, the percentage of those new listings that will be lender mediated held relatively steady; consisting of 66 percent of the new inventory as opposed to last year’s 69 percent.
While all of this is wonderful news for sellers, it should serve as a warning to buyers too. Start getting your excercise by running around looking for duplexes; before you can’t get your pants on at all.