The Shenehon Center for Real Estate at the University of St. Thomas recently released their Minnesota Housing report for the third quarter of 2005. Download it here. Here’s my quick summary and views.

Affordability

Although the home prices have risen rapidly over the past few years, housing remains affordable. Based on data collected in this report, a typical family in Minnesota earns enough to pay approximately 124.5% of the cost of a median-priced house ($225,260, according to the report). Housing is even more affordable in the Twin Cities area, where the prices are higher, but the wages more than make up for it, and a typical family can pay for 131% of the cost of a median-priced home.

Interest Rates

Its interesting to see how the interest rates continue to stay low, even with the Fed raising interest rates to prevent inflation. Take a look at those two graphs, and see how far we’ve gone (down) since the bad old days of the late 80′s!

Financing

Not much going on here, but the chart in this section is interesting, as it seems to show a little uptick in the “percent of listing price received”. See for yourself, I would have thought that this would go down in a “buyer’s market”, but you of course need to factor in how long the average house is on the market, and other statistics…

Unemployment

Its good to see slow, steady job growth, which would seem to indicate that the state of Minnesota has stabilized at a high employment rate. From what I’ve read, the major factor in rapidly decreasing home values (a housing “bubble” bursting) is a major increase in unemployment.

Average sale price

Put simply, the average sales price of a residential home rose by 8.9% from the 1^st to the 3^rd Quarter of 2005. Not factoring in the 4^th quarter of 2005, we are below the appreciation (average sales price increase) rate of 2002 (10% increase), but above 2003 appreciation rate (6%).

Marketing time

The metro’s average time on market remains at less than two months, and actually decreased from the first quarter of 2005. Its not as low as its been in recent years, but with an average marketing time of 51 days, it is still historically low.