The real estate market for Plymouth MN lines up with the trend throughout the Twin Cities metro. Sellers below the $500,000 price point have plenty of reason to be happy, but buyers not so much. When we look at data over the $500,000 benchmark, we see a real estate market balanced between buyers and sellers. However, above the magic million dollar price point, buyers have lots of choices making them dominant in this market segment.
Seeing new listings 39.1 percent higher than August of last year is pretty exciting stuff. We still have a way to go towards achieving balance in the lower end of the market. Right now demand for homes still outstrips supply by a lot. Plymouth home prices inched up 1.5 percent with a median sales price of $361,500. Time spent on the market declined 4.2 percent, which indicates that buyers were not hesitating to close deals.
The Real Estate Market and the Economy
The Minneapolis- St. Paul economy is robust. August job numbers set unemployment at 2.9 percent, making it the lowest we have seen since 1999. Meanwhile, GDP is 4.1 percent, a two year high. Consumers are spending money to demonstrate their confidence in the economy. But, wage growth is elusive. We had a small increase, but it was not enough to meet the rising cost of expenses.
Additionally, the cost of financing a home has gone up. The current mortgage interest rate sits at 4.875 thanks to the ¼ percent hike by the Fed last week. Both higher home prices and interest rates are bound to affect the real estate market moving into the end of the year. Whether it will be enough to change the dynamics is questionable.
Real Estate Market Summary
Looking forward at the autumn real estate market conditions, we find buyers still facing challenges at the lower price ranges. Full price offers are the expectation with bidding wars the norm for updated homes. With mortgage rates going up, it should not be a surprise to see more stabilizing of prices.
The bottom line is that we could be close to a market that will slow down. It’s all going to depend on if mortgage rates climb and the continued strength of the economy. The situation reminds us that we must pay attention to the Trump tariffs and unemployment figures to provide hints as to the future of the real estate market.
Plymouth Housing Market August 2018 compared to August 2017*
new listings up +39.1%
closed sales down -5.4%
Median home price $361,500 up +1.5%
Average sale price $394,651 up +0.6%
Percentage of list price received is 98.8% up +0.8%
days on the market until sale was 46 down -4.2%
inventory of homes down -3.2%
month’s supply of inventory down -3.6%
Plymouth Housing Market September 2017 through August 2018*
new listings up +2.0%
closed sales down -0.2%
Median home price $370,000 up +7.0%
Average sale price $406,575 up +5.6%
Percentage of list price received is 98.9% up +0.7%