Weekly Market Activity Report

Here's the latest from MAAR:

The Twin Cities housing market remains in a period of post-boom stasis, with buyer activity slowed compared to previous years. Newly signed purchase agreements (pending sales) for the week ending June 2 were 17.0 percent behind this time in 2006. New listings were 7.2 percent behind for the same time period.

Economists generally describe market corrections like the one we're experiencing as following three basic recovery patterns: a "V-shaped recovery" where a market experiences a sharp, fast decline but comes out strong once it hits bottom; a "U-shaped recovery” where prices decline gradually and recover slowly; and an "L-shaped recovery," a hard, fast fall with paltry price bounce-back following the market trough.

The Twin Cities market correction sits firmly in the "U-shaped" recovery category. Buyer activity declines have been significant but should be near a leveling point, home prices remain relatively flat, and our eventual recovery will be slow to start and gradual in effect. As the pause in buyer activity persists, it is becoming clear that our time in the bottom bowl of the "U" will carry on into the near future.

This week's edition of the MAAR Weekly Market Activity report features several updated figures. The Percent of Original List Price Received at Sale held steady from last month, posting a figure of 95.9 percent for sales closed in May. The Housing Affordability Index declined significantly to 134 due to increases in median home prices and area mortgage rates. Finally, the Housing Supply Outlook posted a figure of 9.2 months for June, which means it will take the current supply of homes for sale roughly 9.2 months to sell through completely