Sunday, June 17, 2018

Minneapolis Housing Market Reverses Sharp Drop, Breakout Possible

(Click on the image to enlarge)
The Minneapolis housing market was almost parabolic in 2017, meaning the market rose sharply in first six months, followed by steady decline through the end of the year, erasing almost all of the prior 6-months' gains.  

The good news is, the market has temporarily bounced off the bottom. While both trendlines are rejecting the sharp drop in December (#12), they are also pointing to trend reversal. Moreover, the primary trendline (black) suggests a sideways movement within a tight range ($220K to $230K). 

The normalized SPSF (bottom chart) demonstrates a similar trend - sharp rise, big drop and V-shaped recovery on its way. While the 2-Mo MA confirms the big drop, they are however unconvinced of the V-shaped recovery, yet. The primary trendline shows a sideways movement between $170 and $180/SF.

Since charts fail to show formation of any support yet, they must stay above $220K and $170/SF, respectively, breaching which could reopen the old wound (retest the prior lows).

Note: This analysis covers the City of Minneapolis, not the entire Hennepin County. 

- Sid Som, MBA, MIM
President, Homequant, Inc.
homequant@gmail.com

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