Trendsetters in economic analysis have lately been choosing comparative figures between the present and 2007 as the must-have items of the season. Comparing recent data on unemployment, spending habits and housing starts to the vintage days of 2007 are opening up the conversation of the economy’s future. Recovery is in style and may even continue as we dive headlong into the heart of the winter months.
In the Twin Cities region, for the week ending December 6:
- New Listings decreased 4.4% to 849
- Pending Sales increased 5.7% to 815
- Inventory decreased 0.9% to 14,806
For the month of November:
- Median Sales Price increased 5.1% to $205,000
- Days on Market increased 5.3% to 79
- Percent of Original List Price Received decreased 0.7% to 94.7%
- Months Supply of Inventory increased 8.8% to 3.7
All comparisons are to 2013
The median sales price rose 5.1 percent to $205,000, marking 33 consecutive months of year-over-year median price gains. Price per square foot rose 3.4 percent to $120 while months supply of inventory increased 5.9 percent to 3.6. Days on market until sale rose 5.3 percent to 79.
As has reliably been the case for years, pending purchase activity of traditional homes rose even while the overall pending sales indicator declined, signaling the ongoing shift from distressed properties back to the once-again dominant traditional sector. That changing mix of sales activity has helped catalyze the nearly three straight years of price gains seen in the region.
Another factor boosting prices is newly constructed condominiums, particularly in downtown Minneapolis. There’s a building boom happening downtown, even after factoring out the construction and surrounding redevelopment of the new stadium for the Minnesota Vikings.
The median price of new construction condominium sales rose 65.2 percent in November to a new high of $366,242. Although that’s for the entire Twin Cities area, downtown new construction condos comprised about 30.0 percent of all similar units in the Twin Cities in November 2006 but made up about 60.0 percent of that segment in November 2014.
Despite the shiny marvel of new downtown development, the overall housing stock in the Twin Cities region remains quite affordable historically. The Twin Cities housing affordability index of 191 means that the median household income was 91 percent higher than the necessary income needed to qualify for the median-priced home under current interest rates.
In October, the Bureau of Labor Statistics stated that the Twin Cities had the lowest rate of unemployment among major metros in the nation at 3.2 percent. The national rate, at 5.8 percent, is the lowest since July 2008. With national private job creation reaching above 300,000 new payrolls in November, the overall jobs picture is bright.