We Tell it Like It Is

After our meeting with Mark Allen, CEO of the Minneapolis Area Association of Realtors, I'd like to share further information regarding our current state in the housing market.

The answer is "yes", we have hit rock bottom and we are beginning to see signs of a plateau & gradual increase. The first sign: in 2006, the Twin Cities had a record 108,000 new listings on the market. This peak in new listings is what killed us. Way too much inventory for the amount of demand we had. This number HAS to go down in order for a correction to take place. In 2007, it decreased to 105,000 and its projected to be down to 80,000 by the end of this year. Today, there has been an average of 21.7% new listings and 27.6% closed sales. This is good. These numbers need to continue to grow apart!

In the world of foreclosures, 20% of homes that are newly listed for sale are either foreclosures or pre-foreclosures (short sales) and 30% of the purchases right now are also in that category.  Foreclosures and pre-foreclosures will continue to be prevalent for the next 2-3 years as many ARMs are still projected to readjust within the next year and home owners will find themselves in trouble.

How does 2009 look? Likely the same as 2008. It won't get any worse, but there will still be no reprieve for home sellers. Buyers will still likely have one more good year to buy.

How does the current national economy affect the housing market? If you are a solid buyer w/good credit and money for a downpayment, you will be fine, I am told.