If you are on the hunt for local housing market updates for the Twin Cities region, but are sick to death of everyone either trying to buy you or scare you, you are in the right place. This blog will recap the final month of 2022 using real data that is honest and to the point.
No sales pitch, no fear, just info.
In this blog, I cover:
- Inventory trends
- Sales prices
- Buyer demand
- Market Balance (Seller vs Buyer's Market)
One of the first impacts of the off-season can be seen here in the total inventory for the Twin Cities Region. If you look at the 10 year trend line, we bottom out in total options every December/ January. So it is no surprise that we are down roughly 25% in total homes for sale compared to the month of November. However, if you zoom in on just the years of 2021 and 2022, inventory has increased slightly since last December. This is good news for buyers because there are more homes to choose from.
So now if we take a look at new listings added into the market, you will see that December is the lowest point of every single year since 2012. This is an expected trend line due to the holiday season.
Home Sales Prices
The other part of the market that is impacted by the off-season is home sales prices. Here you can see that over the last 10 years homes are at their lowest prices in the months of December and January.
The median sales price in the Twin Cities region in December was $348,000, up $16,500 from December 2021.
% of Closing Price vs original asking price
Now lets take a look at the percentage of the closing price compared to the original asking price of homes in December. We saw a dip down to 97.6% of the asking price in December. This is the lowest below asking we have seen since February of 2017. And there is a reason for it...
Several sellers are hoping to sell their homes for what their neighbors home sold for in July of 2021, and that is just not the strategy you can use during an off season. So we are seeing higher levels of homes listed for more than what buyers are willing to pay for them. This percentage will climb closer to 100% and possibly even greater than 100% as we enter into the spring market and demand increases.
Speaking of demand, the average number of showings per listing in the Twin Cities region is down, which is a seasonal expected change. In December of 2022, we saw an average of 3.9 showings per home.
We also saw the median days on market increase to 34 days on market in December. This may seem dramatic because it is the longest timeline that we have seen since early 2020, but it is on par with pre pandemic trends. So it is a signifier that we are headed back to a more balanced market.
We are still seeing a delicate balance here in the Twin Cities with supply and demand meeting each other a little better than last spring. This final graph shows the months supply of homes. We determine this statistic by calculating the number of active buyers to the total number of homes to sell. if we pretend that no new buyers entered the market and no new homes were added, this statistic shows us just how long it would take for all of the inventory to be sold. in December we were at 1.4 months supply. A healthy balanced market is between 3 and 5 months. so we are still definitely in a seller's market but with limited inventory and limited buyers in the off-season we are still seeing more negotiation power in the hands of buyers.
Mortgage Interest Rates
Most of this is seasonal change, but there was also a forced low down with increased interest rates as the fed battled with inflation. Rates hovered right around 6.35% for a 30 year fixed rate loan in the month of December and they are expected to remain in the low to mid sixes until this spring.
so there is your recap of december 2022...
Check out my next blog to see predictions for the real estate market for 2023 or watch the video here. I have a feeling that its going to be a wild ride, so be prepared to buckle in.