A doctor who wants to determine a patient’s health checks out their vital signs: their heart rate, blood pressure, lungs, etc.
What’s the equivalent for the housing market?
Trends in the following three things:
One. Inventory.
Falling inventory — also called “supply” — augurs well for future housing prices; increasing inventory, the opposite.
Right now, housing inventory in the Twin Cities is about 19,000 units — and falling.
Two. Sales price as a percentage of list price.
In a hot market, homes sell at or close to list price — or even above.
In a cold market, Buyers demand — and get — deep discounts.
In the Twin Cities currently, sales price as a percentage of asking is around 92% — and falling.
Three. Cumulative days on the market (“CDOM”).
In a Seller’s market, homes move quickly; in a Buyer’s market, they languish.
So, what’s happening currently?
It depends on the price bracket — higher always takes longer than lower — but over all, market time is increasing.
Mix all of the above together, and what kind of picture do these vital signs yield?
A soft market generally, punctuated by pockets of strength — especially in in-demand, moderately-priced neighborhoods close to the Lakes (think, Linden Hills in Southwest Minneapolis, Edina’s Morningside neighborhood, and Fern Hill in St. Louis Park).