Despite the 14.2% rise in pending sales, homebuyers in the Twin Cities seem unphased by recent mortgage rate increases. The housing stock remains highly affordable historically speaking, even with mortgage rates around 4.5%.
In fact, 25 of the past 26 months have seen year-over-year gains in pending sales, and the metric is currently as its highest level since June 2006. Potential buyers are keeping an eye on seller activity for inklings of additional inventory.
New listings increased 20%, marking the second largest gain since March 2010. Buyers have 15,193 properties to choose from, a 17.2% drop from June 2012, but a 17.4% increase from January 2013.
The metro’s median sales price rose 17.5% to $210,000 — the highest median sales price since December 2007.
This type of activity is driven by a shift in sales. As recently as February 2011, foreclosures and short sales made up 61.5% of all sales activity. In June 2013, these two distressed segments totaled just 21.7% of all sales.
On the seller side, the percentage of all new listings that were distressed dropped to 16.8%, marking its lowest level since September 2007.
"As a result of fewer distressed properties and more, higher-priced traditional properties selling, home prices have been enjoying quite the rally," said Andy Fazendin, president of the Minneapolis Area Association of Realtors.
Overall, seller activity was up 20%, but traditional new listings jumped 44.4%. Foreclosure new listings dropped 24.6% and short sale new listings fell 51.7%.
With 16 straight months of year-over-year price gains, multiple-offer situations and just 3.5 months' supply of inventory, the same market that recently favored buyers is now tilting toward sellers.