This article originally appeared here on the Star Tribune website.
Are you living in a hot housing market?
To find out, the Star Tribune’s housing market index combines four key housing metrics for cities with more than 100 sales last year: Change in the average price per square foot; average days on market; percent of list price received by sellers and share of all sales that were foreclosures and short sales.
The Star Tribune ranked each community on the four metrics, then added the rankings together to get an index score. (More details are at the bottom of the page.)
The higher the index score, the more likely houses in those areas were likely to sell quickly and for nearly the full asking price. And because of big price gains, these were also communities that had few distressed sales.
Minneapolis and St. Paul neighborhoods, which had far fewer sales than their suburban counterparts, were compared with one another separately.
Use the map and list below to find your community and see deeper details about how it scored on the index and some key demographics. (Note it only includes communities with 100 or more sales in 2016.) Use the toggle button below the map to see index results for Minneapolis and St. Paul neighborhoods instead.
All data come from MAAR and RMLS of MN, Inc. Data deemed reliable but not guaranteed. Not to be reproduced without MAAR’s consent. Minneapolis Area Association of Realtors
About the index:
Numerical rankings were assigned to each community on four metrics, then those rankings were added together to create the final index score. We compared 103 cities against each other, and separately compared the 100 Minneapolis and St. Paul neighborhoods against each other. Here’s how the rankings worked for the four metrics:
1) We calculated the percentage change between the average price per square foot in 2016 and the average across the previous four years. The change between those two numbers was then ranked. A ranking of 1 represented the lowest change, while the highest score was 103 for the city analysis and 100 for the neighborhood analysis.
2) For 2016 average days on market, a score of 1 represented the longest days on market, while the city with the shortest days on market got the highest score (either 103 for cities or 100 for neighborhoods).
3) For the 2016 percent of original list price received, the community with the lowest percentage received a score of 1. The highest-scoring communities tended to have average percentage of list price received at or above 99 percent.
4) The index also factored in the percentage of distressed sales in 2016 (foreclosures and short sales). In this case, the community received a ranking of 1 if it had the highest percentage of distressed sales. Communities with low percentages of distressed sales got the highest rankings.
With homes still in limited supply and buyers’ demand not wavering, signs continue to point to a tighter Twin Cities housing market.
Median sale prices for homes are predicted to rise 5 percent this year, according to a forecast released Friday by the Shenehon Center for Real Estate at the University of St. Thomas’ Opus College of Business.
“The historically low supply of homes, which has been most acute since mid-2015, will continue to fuel the median sale price increase throughout the coming year,” said Herb Tousley, director of real estate programs at the university.
The analysis echoes other predictions. CoreLogic has estimated that, from November 2016 to November 2017, home prices in the Twin Cities will rise 5.8 percent. Nationally, home sales are expected to increase 2 percent this year, according to the National Association of Realtors.
Tousley said that in 2017 he expects about the same amount of homes to be sold as last year, when about 60,000 houses sold. More new homes will be built to help bring the amount of available housing to more normal levels, he said.
Before the housing market crash, more than 20,000 homes typically were available for sale at any given time in the Twin Cities, but the number has significantly dropped in recent years. In 2016, from 11,000 to 15,000 homes were available. This year, Tousley expects the range to be from 12,000 to 16,000.
Article By Jim Buchta at StarTribune.com
Foreclosure inventory in Minnesota was among the lowest in the nation, bolstering the notion that foreclosure prevention efforts and a strong economy have been a boon to the state’s homeowners, according toCoreLogic’s National Foreclosure Report.
The states with the lowest foreclosure inventory rate, which represents the number of homes at some stage in the foreclosure process, during February were Alaska (0.3 percent), Minnesota (0.4 percent), Arizona (0.4 percent), Colorado (0.4 percent) and Utah (0.4 percent).
Nationwide, the national foreclosure inventory included approximately 434,000, or 1.1 percent, compared with 571,000 homes, or 1.5 percent, in February 2015.
Completed foreclosures or the total number of homes lost to foreclosure, declined 10 percent compared with February 2015 to just 38,000 properties. Compared with a peak of 117,776 in September 2010, completed foreclosures fell 71.3 percent.
CoreLogic said that since the start of the financial crisis in September 2008, there have been about 6.2 million completed foreclosures across the country. Since homeownership rates peaked in the second quarter of 2004, there have been approximately 8.2 million homes lost to foreclosure.
Frank Nothaft, chief economist for CoreLogic attributed the trend to income growth and improved. “Job creation averaged 207,000 during the first two months of 2016, and incomes grew over the past year,” he said in a statement.
The states with the highest number of completed foreclosures for the 12 months ending in February 2016 were Florida (72,000), Michigan (49,000), Texas (29,000), California (25,000) and Ohio (23,000), all o which accounted for almost half of all completed foreclosures nationally.
Spring is here, and with it comes the annual springtime seller’s market! The national trend of low inventory and high demand have dropped the number of days for homes staying on the market and driven prices higher. Interest rates have remained low, which also provides further incentives for buyers to bid high to get the best deal as soon as possible.
The Following statistics have been sourced from MAAR: (View the full report here)
In the Twin Cities, for the week ending March 26th:
For the month of February: