Each week members of the Minneapolis Area Association of Realtors are given up-to-date market stats on the local real estate market. We all know the market has been sluggish this year and many are concerned and want to know when it plans on waking up. Too bad we can't give it a shot of espresso.
Buyers are just not buying right now and homes are taking a long time to be absorbed. The Minneapolis market is flooded with homes and has approached the supersaturation mark. There are currently over 35,000 residential properties for sale in the 13-county metropolitan region, up 12.0% from this time in 2006 and 56.7% from this time in 2005, according to MAAR.
Seller activity remains flat, and buyer activity is even slower, with the number of newly signed purchase agreements declining by 10.2% from this time last year. With buyers so few when compared to the amount of homes available, sellers have to price their home competitively and make sure it is "showroom" ready.
I honestly have to say that I don't see this trend changing any time soon. I saw the same thing happen in Florida in 2005, at least a year and a half before the disease hit Minnesota. Like an illness, it will take time to recover, but don't expect it to happen overnight. Hopefully once Spring hits again, the market will be reinvigorated, but sellers should not hope for prices to reach 2005 levels for many years to come. Maybe some orange juice would help instead?