Housing Market: Positive Signs?

I am cautious and weary of puffery in statements regarding the housing market, in order to protect my credibility from being seen as a "cloud 9" view, not in touch with reality. I am very happy to share with you some information today, in hopes to project my confidence in the impending rise of our gorgeous Stillwater real estate market.

We've all been searching for the silver lining of this cloud. For the past 5 years, home values have been plummeting at an unprecedented rate. Some home values have dropped 25%. Some have dropped up to 50%! And we've been stuck in this mess wondering when the signs were going to point towards a better or "balanced" market.

The mainstream media takes hits at the real estate market as if it were a pinata at a birthday party, spinning out of control never knowing when it would crack. Unfortunately, some of the claims were proven true. We were losing equity. We were underwater with our mortgages. Banks did have extreme amounts of foreclosed and short-saling properties. Many agents got out of the business simply because they couldn't handle the pressures in their communities as windows were boarded up, and neighborhood home values dropped. There is a silver lining, a light at the end of the tunnel. And the market is clearly telling us that it is ready for some appreciation. It is ready to be a "balanced" market.

In any economics class, you will learn about the basics with a supply and demand chart. Simply put, every market goes up and down proportionately with supply and demand. As the supply increases, demand decreases. As demand decreases, prices drop. The reciprocal is true. As supply decreases, demand increases. As demand increases, prices rise.

As a professional real estate agent with Edina Realty in Stillwater, it is not just a request, but a demand that I know and understand where our market is going. Here is what I'm seeing, and what it means:

Our Minnesota Metro area has a uniform MLS system that is only available to licensed professionals. We are able to view any home that is on the market, or was in the past. The MLS lets us see all of the statistics in correlation with the real estate market.

Over the last 3 months, our data shows an average of 14,474 new listings taken. One year previous, we had an average of 17,058. Since 1 year ago, our new listings have decreased by 15.1%(Supply). Our total inventory of homes for sale has also dropped 20.3% since last year. On the opposite hand, we have pending sales over the last 3 months at 10,269. One year ago the number was 7,847. That is an increase in sales of 30.9%. Taking those three numbers, we can see that our supply is decreasing, and decreasing fast. I can see it with my own clients. Where as a year ago, we could look at 25 homes, all similar and in the same area; now there is much less. It is harder to find more than 2 handfuls of properties that my buyers can bid on. Buyers are getting more frantic, and multiple offers have been prevalent in every range of home price in the market.

Prices are bottoming out, and the market has been showing a lot less depreciation than in the past. A double dip recession has passed, and the country is ready to start seeing some improvement. The President of Edina Realty, Inc. was asked recently in a sales meeting when he thought this market would turn around. With his professional analysis, Bob Peltier said, "I think we will see some actual appreciation in home prices in the last quarter of 2012."

Taking this information into consideration, I am proud to be a professional real estate agent in this community, and can't wait to serve your needs.

Cheers!