According to the Minneapolis Area Association of REALTORS newest figures, the Housing Affordability Index is up 4.5% in November 2007 versus November 2005, from a value of 132 in 2005 to 138 today.
While this is an improvement from much of 2006 and 2007, it is still substantially lower than the index's record of 160, set in 2003. The index's low of 122 was set in 2006.
The Housing Affordability Index formula measures housing affordability for the Minneapolis/St. Paul market. An HAI of 138 means the median family income is 138% of the necessary income to qualify for the median priced home using a 20% down payment, 30-year fixed mortgage.
The October 2007 Median Sales Price for Twin Cities homes fell 3.5% from a year ago and 4.3% from two years ago, to $220,000. The Median Sales Price is the price at which 1/2 of the homes sold for more and 1/2 of the homes sold for less.
While this sounds like negative news, pricing is all relative. The only people who suffer in a falling real estate market are the downsizing & downpricing homeowners. For those who bought in the last few years that are trying to sell today will see red ink on the sell side but will see savings on the purchase of their new home. Most of all, first time buyers and move-up buyers are definitely winning in this market. The future of the Twin Cities real estate market is not certain, but most experts believe we will be in for at least another 18-24 months of a slow real estate market before we find returning strength and balance between buyer and seller demand.
Edina Realty agent Aaron Dickinson works with buyers, sellers, banks and investors in the Twin Cities, MN area and is the author of the Twin Cities Real Estate Blog and Minneapolis Real Estate Blog
Source: www.articletrader.com
