Housing Supply Outlook

New construction listing inventory continues to drop as builders cut back on new projects and focus on selling existing units. The number of new construction units on the market has fallen by 17.5 percent when compared to this time last year and are being sold at 7.4 percent less per square foot.

Condominiums face a tough road ahead. Their sales have dropped the most of any property type, keeping their supply levels high despite a drop off in new listings.

The middle-upper price ranges found between $250,000 and $500,000 are more stable than others, seeing far less growth in inventory than other price ranges and a relatively smaller drop in buyer demand.

Massive inventory growth is taking place in the lowest price ranges, possible due to the role of sub prime foreclosure.

Foreclosures seem to be peaking in the state of Minnesota as the 2 year arms originated in 2005 are adjusting at this point causing a severe spike in payments for those folks.

Inventory is up slightly...

to end up at 20,009 active listings in the 7 county metro area this week - that's less than I thought it would be. That is a 1.0% increase. The inventory is still growing at a slower pace than last year so that's good news too!!!!!

New pendings were up nicely at 24.1% over lat week and that is a 14.3% increase over the same time last year. The total number of new pendings for the 7 day period ending on Wednesday the 31st was 737 that compares to 594 for the week before.

Market activity

The Twin Cities Realtors Association said there is some evidence that the local market is on an upswing. January has been especially good for market activity.The average sale price of a home in the Twin Cities in December was about $286,000, according to the Twin Cities Association of Realtors.That's up 2.2 percent over the previous December.

Existing-home sales for 2006 are expected to come in at 6.50 million, the third highest on record, with a total of 6.42 million seen in 2007. New-home sales in 2006 should tally 1.06 million, the fourth highest on record, with 957,000 projected this year. This backs up the National Association of Realtors theory of a soft landing for the real estate market.

The real estate market has really started to heat up this week. Inventory continues to drop, interest rates remain low and the spring market is right around the corner.