The number of homes entering the market in Saint Paul peaked in 2006 and remained high till about Spring 2008 has been trailing down ever since.
With fewer homes entering the market there will be less competition among homeowners in St. Paul resulting in a shortage of Homes for Sale and rising Home Prices.
Home Sales & Housing Inventory
The number of homes for sale in Saint Paul (Housing Inventory) increased pretty quickly till about the first half of 2008 and started to trail off over the next few years. The Homebuyer Tax Credit may have leveled off Housing Inventory for a time when it was in place, but resumed it’s decline several months after the Tax Credit Expiation. Housing Inventory has been falling pretty quickly since 2011. Fewer homes entering the market is one contributor to fewer homes for sale
If Housing Inventory continues to fall this may result in fewer Home Sales, which isn’t necessarily a bad thing since fewer homes for sale will push Home Prices up.
Pending Home Sales and Closed Home Sales follow each other pretty closely in most cases. Closed Sales are usually a month or two behind Pending Home Sales. In this case they’re neck and neck. Home Sales have been rising steadily since Spring 2011 and may appear to be leveling off as of late.
As I mentioned earlier, fewer Homes Sales isn’t necessarily a bad thing since it’s also an indication of Fewer Homes for Sale if Home Prices are increasing.
Homes for Sale
Our next chart clues us in to what Market Conditions are in Saint Paul
In any given month a market can favor Buyer’s, Balanced or Seller’s. However, to get a good feel for a market we want to take a look at the trend line.
In this case we can see that the Months of Inventory jumps quite a bit when we look at monthly numbers, which really don’t help us determine what the Market Conditions are, but if we look at the trend line we see that Saint Paul has been transitioning from a Buyer’s Market to a Seller’s Market.
The Absorption Rate is trending down at 5.0 Months of Inventory, which is considered a Balanced Market.
- Buyer’s Market = More than 7 Months of Inventory
- Balanced Market = 5 – 7 Months of Inventory
- Seller’s Market = Less than 5 Months of Inventory
Expectations indicate this trend line is starting to level off some and a Seller’s Market may occur in the coming months.
Median List Price and Median Sale Price follow similar patterns, so there isn’t much that it can tell us other than how close to List Price homes are selling for. In this case Home Sellers are receiving close to 86% of their List Price. With Home Prices rising the Percentage of List Price may start to rise as well.
So far the Median Sale Price in Saint Paul has depreciated 33% since 2002, 47% since 2006 and appreciated 4% since 2011.
With fewer Homes for Sale in Saint Paul the Median Sale Price should continue to increase as Housing Inventory becomes a premium.