John Murphy’s MEDINA REAL ESTATE REPORT

Are we at the bottom of the housing downturn in the Twin Cities?  Based upon the stats published moments ago from the Minneapolis Area Association of Realtors, it may well be upon us.  (Disclaimer…I sell real estate and as a sales person, I am often too optimistic…glass is half full).

Here is what the association just reported:

Weekly Market Activity Report

If you’re looking for some insight into just how sluggish the second half of 2007’s home sales were, look no further then the year-over-year comparisons with the sales from this year. For the week ending August 16, 2008, there were a whopping 33.0 percent more pending sales than the same week last year—an increase of more than 200 units. This extremely strong showing is due to a combination of legitimately robust current demand and the uncharacteristically steep downward dive sales took last year after the credit markets began to constrict in August 2007. This week’s figures are more in line with the equivalent (pre-credit crunch) time period in 2006—just 2.5 percent off that pace.

As for housing supply, the number of new listings on the market receded by 18.4 percent for the same time period comparison, and the total number of active properties for sale is currently 7.1 percent lower than at the same point last year.

It’s my opinion we’ll need to see continued and consistent improvement in the pending sales activity before the market will have truly turned.  We’re in the early stages of consistent year over year improvement.  Please note that home prices will likely be a lagging indicator.  Sales activity will pick up for some time before prices rebound.