Twin Cities Real Estate Market Update for Week of February 23

February 24, 2009

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Each week week I look at the market statistics to determine overall market trends.  Lately we have been breaking this down into two comparisons: year to year and week to week.  Year-to-year compares the numbers from last week to the same week in 2008.  This number gives us a sense of where the market has moved on a larger scale. Week-to-week is a comparison from last week to the previous week, and simply gives us potential early indicators for a shifting market.  Here are the numbers:

Year to Year Comparison

Down: The number of new listings coming on the market was 1,682 last week, a 9.5% decrease compared to 1,859 in 2008

Up: Pending sales are up from last year by 17% from from 624 last year to 731 last week.

Down: The total number of active listings currently sits at 25,432 which is down 13.8% from last year’s 29,509.

Once again we have the desired Down-Up-Down (DUD) pattern.  This pattern reduces the overall inventory faster than any other.  The faster it drops, the quicker home prices can stabilize as the market balance would move it from being advantageous to buyers to more neutral between buyers and sellers.

Week to Week Comparison

Down: New listings coming on the market slowed by almost 100 units compared to last week (1,682 vs 1,780 last week)

Down: the number of pending sales decreased slightly from last week, dropping to 731 from 745 the previous week.

Down: total active listings on the market dropped 105 from last week (25,432 vs. 25,537).

This is the exact opposite of what I expected to see.  As we transition from the holiday market to the winter market to the spring market I would expect these three numbers to show Up-Up-Up.  But, this is probably more an example of why week-to-week trends can only be looked at as an indicator of the market.  A cold snap of several days, school vacations or even holidays can create these fluctuations.  For example, are these numbers all down because banks were closed on Monday for President’s Day and their staffs were not there to get new properties listed for sale or to accept offers coming in on their current listings?  No way to know for sure, but given that bank owned sales are about 60% of the market, I think this is as likely as anything else.

Speaking of bank owned properties, I will be putting on a seminar along with Alec Grebis of Cornerstone Mortgage on Thursday, March 5th about how to buy these homes.  You can sign up for the seminar here.

Posted in Market Update