What's in Store for the Twin Cities Market in 2017?
Today we wanted to bring you a quick recap of what we saw in the Twin Cities market in 2016 and also give some predictions for the market going forward in 2017.
Last year ended up being a great one in our market, going from an average of having around 15,000 homes on the market at any given time in 2015 to about 13,000 in 2016. That's a 16% drop in the amount of homes for sale in our market. This low inventory led to a big decline in the average days on market for a home, from 41 in 2015 down to 33 days in 2016.
Homes are simply selling much faster, and that's fantastic.
As you might expect, both of these factors have led to an increase in median sales price. It's up just over 5% to about $232,000 for the median sales price in our market. When we think back to that 12-month period around 2011 when our market was at its lowest point, there were about 36,000 home sales. Over 50% of those were lender-mediated, meaning they resulted in a foreclosure or short sale or something similar. Last year, there were 59,000 sales with about 93% of sales being traditional sales. We're definitely seeing a return to a more traditional real estate market.
This is what we expected when we talked about it a year ago, and we expect it to continue. We think home prices will continue to increase at a moderate rate, possibly similar to the 5% we saw last year. Interest rates are up slightly, so we might see some slowing in that low amount of inventory, but we think rates will remain low. A balanced market is somewhere around 22,000 to 24,000 homes for sale, and having an average of 12,000 is pretty low.
All in all, we think 2017 will be a great year in the Twin Cities market and we're looking forward to it. If you have any questions about our market or you're thinking about buying or selling a home, give us a call or send us an email. We'd love to help you!