Good Times Bad Times

Posted in Twin Cities Market | Posted on 07-08-2014 | Written by Ryan Jones

ryan jFor those of you out there who are fans of Led Zeppelin…  “In the days of my youth, I was told what it means to be a man, now I’ve reached that age, I’ve tried to do all those things the best I can. No matter how I try, I find my way into the same old jam.”

Good times bad times; I’ve used this phrase many times over the past six months to characterize the housing market.  The lyrics above are from the opening track on Led Zeppelin’s 1969 debut album, introducing the world to the greatest rock band ever.  This also happened to be the song I first heard this morning while getting ready to write this article. So there is the true tie in, which is in addition to the obvious tie in from the title of the track, which characterizes the housing market today.  Which could also characterize quite a few things out there… (Economy, Weather, Minnesota Sports, Politics) Ok, politics might be a stretch.

But for this we focus on the housing market and why it’s perfectly normal, and quite frankly preferred, that we are experiencing good times and bad times.  This creates some balance in what has otherwise been an unbalanced market for much of the last 10 – 15 years.   Simply put, today’s housing market is healthier than it has been in over a decade.  Those who are surprised aren’t tracking the market. Those who are not surprised must be clients of Metrostudy!

Let us do a deeper dive into the numbers.

Twin Cities New Home Activity Showing Sales (2008-2014)

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At the heart of Metrostudy, and behind all the glitz and glamour that most folks think of when they hear Market Research, sits our proprietary lot by lot, quarter by quarter, market by market intensely accurate treasure chest of information. While there are and will continue to be imitators, we are the innovators.  The Innovators of Inventory! And that my friends will likely be the title of my next blog or possibly my pitch to Stan Lee at Marvel Comics for the next big superhero blockbuster.  Stay tuned or check your local listings…

Sales figures or closings figures, which you can see above, (blue circle) tell you one thing, but fail to tell you the most important thing.  If one were to look at the numbers above based solely off closings, one might be inclined to think that the market is strong and in need of more homes and more lots to build more homes.  In the 1st quarter of 2008 we closed almost 11,000 new homes but started just under 7,000. Let’s look at the inventory side of things, brought to you by The Innovators of Inventory!

Twin Cities New Home Activity Showing Inventory (2008-2014)

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With starts and closings figures removed and only inventory showing (yellow circles), the market looks a little different.   How might ones decisions on the market differ if you only looked at sales?  What will your decisions look like today if only based off closings?

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With the new home market experiencing both good times and bad times it’s important to know which one you’re in, as you don’t want to find your way into the same old jam…

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