As I reported previously based on the June report, it’s still looking like the real estate market in the Twin Cities reached bottom earlier this year and is in a period of solid recovery, according to the July report from the Minneapolis Area Association of Realtors. Consider the following:
1. After falling pretty consistently during almost every month during the last two years, the median home price in the Twin Cities area has increased by almost 17% since February, and by almost $25,000 in dollar terms (see chart above, click to enlarge). Despite a small decrease in the median home price for July, there has been a definite positive trend this year since the bottom in February.
2. Pending sales in July are up by 16% from the same month last year, and by 23.1% from two years ago (see middle chart above).
3. Closed sales in July were almost 26% higher than July 2008, and almost 16% higher than July two years ago.
4. The average sales price in the Twin Cities area increased in each of the last three months.
5. The current 7.2 months supply of inventory is more than 3 months lower than last year at this time (10.5 months).
6. The current Supply-Demand Ratio (SDR) of 4.88 homes for sale per buyer is 35% lower than last year’s SDR of 7.48 homes per buyer (see bottom chart above). (Note: The SDR is calculated by comparing the number of homes for sale at the beginning of each month with the number of total pending sales for the month. The higher the SDR, the more supply there is relative to demand.)