Thursday, April 12, 2012

Metro Market gaining momentum!

Minneapolis, MN – Urgency Picks up Steam as
Inventory Continues to Fall
(3,750 single-family permits in 2011, 20th largest market in the country)
Traffic improves further, better economy and urgency push levels higher. Traffic
increased and again exceeded agents’ expectations in March, as our buyer traffic index
improved to 72 from 63 in February, with readings above 50 pointing to better than
expected traffic. This marks the fourth consecutive month of improvement and the region’s
highest reading since ‘05. Agents attributed the higher traffic in March to better confidence,
favorable affordability, increased urgency from lower inventories, and the still warmer than
usual winter weather. One agent mentioned, “The economy is doing better and buyers
think the market is on its way up, if at least not falling anymore.” Another agent noted,
“Consumers think it is a good time to buy right now. Interest rates and prices are great.”
On urgency, several agents noted that decreasing supply has caused buyers to take a
more vested in the market as the number of opportunities in the market declines. One
agent noted, “Quality inventory is down and that has led to a long awaited sense of
urgency in the market.” Another agent highlighted, “Buyers want to get in before prices go
Prices stabilize in March. Agents indicated that prices were stable in March, as our home
price index improved to 45 from 36, in-line with a neutral reading of 50, pointing to
unchanged prices over the past month. Meanwhile, inventories continued to fall, declining
for the now tenth consecutive month, as our home listings index came in at 80 (from 86 in
February), with readings above 50 pointing to lower inventories. Agents also pointed to still
better urgency trends, as our time to sell index came in at 72 (from 66 in February), with
readings above 50 pointing to a reduced time to sell.
Comments from real estate agents:
■ “The super deals are almost gone and everyone is scrambling to get one.”
■ “Interest rates moved a little higher and that helped buyers get off the fence and
buy now before they missed out.”
Ryland, Lennar and Pulte have the greatest exposure. Ryland has the greatest
exposure to Minneapolis, which generates approximately 5% of its sales, followed by
Lennar at 3% and Pulte at 2%.

No comments:

Post a Comment