Real Estate Market Overview for Minnetonka
The real estate market for Minnetonka reflects the bigger picture we see in the Minneapolis-St. Paul metro market. If you are selling the property under $500,000, as a seller you’re sitting pretty. Houses listed above that price are facing a balanced real estate market. Homes are listing above $1,000,000 put buyers in the driver’s seat.
Delight is our response to see an increase of 13.8 percent in the new listings compared to August 2018. While the uptick is good news, in contrast, inventory levels still fell -7 percent. Falling inventory means we still have lots of demand for homes that are not being met, most especially in the starter home segment of the real estate market.
Home prices continued ticked upward by 1.0 percent. The median sales price was $337,000 in Minnetonka for August. Days on the market fell 21.4 percent, showing buyers didn’t hesitate to make offers on desirable homes.
The Economic Effects on the Real Estate Market
The Twin Cities economy remains strong. The August numbers on unemployment reflected a low of 2.9 percent. We have not seen data like this since 1999. The national Gross Domestic Product or GDP was at 4.1 percent. This number reflects a two year high. Consumers are confidence and showing it by spending. However, with the good comes the bad. The fly in the ointment is real wage growth which continues to evade us. The small rise was canceled out by rising prices.
Another significant impact on the real estate market is interest rates. After the Federal Reserve upped the rate a quarter point, mortgage interest rates are currently at 4.875. The possibility they will go up one last time in December is also genuine.
Rising home prices along with interest rates may have a profound effect on the real estate market moving into the end of the year. There is no doubt that some buyers will be sidelined. Many hats can still afford to own a home will need to make adjustments to their expectations regarding affordability.
Real Estate Market Summary
As we head into fall buyers looking for homes in the lower price ranges, remain challenged. Bidding wars and full price offers are still the norms. As home values and interest rates go higher, we may begin to feel the effects reflected in pricing. It may finally see a market that has been running on rocket fuel slow down a bit. A lot will depend on how high mortgage rates climb and how strong the economy remains. We need to watch both the Trump tariffs and employment numbers to get a feel for the near future of the real estate market.
Golden Valley Housing Market August 2018 compared to August 2017*
- new listings up +13.8%
- closed sales down -6.9%
- Median home price $337,00 up +1.0%
- Average sale price $405,395 up +11.5%
- Percentage of list price received is 97.8% up +0.7%
- days on the market until sale was 44 down -21.4%
- inventory of homes down -7.0%
- month’s supply of inventory down -3.2%
Golden Valley Housing Market September 2017 through August 2018*
- new listings down -7.9%
- closed sales down -7.8%
- Median home price $352,500 up +2.3%
- Average sale price $415,030 up +7.0%
- Percentage of list price received is 98.4% up +0.5%
- days on the market until sale was 61 even with last year 0.0%
*Market data source Minneapolis Area Association of Realtors.
A complete review of real estate for the Twin Cities metro is available on the Minnesota Property Group blog.