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Slowdown in Showings Suggests Further Declines in Existing Home Sales in Coming Months
The following data is courtesy of David Arbit, Director of Research at the Minneapolis Area REALTORS® and NorthstarMLS (posted with permission). Here is a link to their data.
This graph shows the 7-day average showings for the Twin Cities area for 2019, 2020, 2021, and 2022. The 7-day average showings (red) are currently off 23% from 2019.
This slowdown in showings started in May and accelerated in June. The existing home sales for June will be released tomorrow, and that is for closings in June. Closings in June were mostly for contracts signed in April and May. This slowdown in showings suggests further declines in closed sales over the next few months.
There was a huge dip in showings in 2020 (black) at the start of the pandemic, and then showing were well above 2019 (blue) levels for the rest of the year. And showings in 2021 (gold) were very strong in the first half of the year, and then were closer to 2019 in the 2nd half.
Note that there were dips in showings during holidays (July 4th, Memorial Day, Thanksgiving and Christmas), and also dips related to protests and curfews related to the deaths of George Floyd and Daunte Wright.
2022 (red) started off solid but is now well below the previous three years.
The second graph shows the Twin Cities affordability index. The Twin Cities affordability index (like the NAR’s) went below 100 in April, for the first time since at least 2003 - and is now at 91 in June. This means a local family earning the median income can no longer afford the median priced home. This is a 30.0% decline in affordability year-over-year.
The third graph shows inventory since 2004. Even though inventory is up 9.8% year-over-year - it is still historically low in the Twin Cities (other cities like Phoenix are back to normal levels). At the end of June, inventory was at 8,0820 units, about two-thirds of normal for this time of year.
The slowdown in showings suggests further declines in closed sales over the next few months.
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