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December 2021 Housing Report

Competition for scarce stock pushes median price up
MINNEAPOLIS (January 12, 2022)
 — Marking a chilly end to a hot year in the Minnesota housing market, closed sales of residential homes were down 4.0% compared to December 2020. As new listings sank 14.3% over the previous year, buyers continued chasing diminishing inventory, driving up the median sales price by 8.0% to $300,000. The average home sold within just 36 days, that is six days faster than the 42-day average in December 2020. Sellers were still well positioned to benefit from buyer demand, receiving 98.7% of their asking price, a 0.2% increase over last December. As the year closed, there was barely a month’s supply of homes in the state’s housing stock—down nearly 25% from December 2020.“As 2021 ends, we see the return of a normal seasonal cycle. Gaps compared with the previous year reflect the remarkably high volume of sales in December 2020. Seen in the larger historical context, 2021 ended on a high and healthy note,” said Chris Galler, CEO of Minnesota Realtors. “The increasing median and average price for homes reflects the fact that buyers are still actively competing for properties. Limited inventory will continue for the foreseeable future due to escalating construction costs, labor and materials shortages, zoning requirements and regulatory burdens. As buyer demand increases, home prices will rise. Even if interest rates go up in the spring, these initial increases are unlikely to diminish Minnesotans’ appetite for buying homes in 2022.”

December year-over-year summary of key market indicators:

  • Closed sales decreased 4.0% to 7,137
  • Median sales price increased 8.0% to $300,000
  • Average sales price increased 9.4% to $351,135
  • New listings decreased 14.3% to 3,591
  • Pending sales decreased 12.4% to 4,595
  • Days on the market decreased 16.3% to 36 days
  • Homes for sale decreased 24.5% to 7,121

Closed Home Sales Across Minnesota by Region

In December, closed sales declined in nine regions compared to a year ago, bringing Minnesota’s average number of closed home sales down 4.0% year over year. Four regions reported increases, with three areas marking double-digit gains: South Central at 22.1%Northwest at 14.0% and West Central at 10.2%. By contrast, four regions marked double-digit closed home sale declines: Headwaters down 20.0%, Southwest down 19.4%, Southwest Central down 15.6%, and Arrowhead down 14.6%. See the chart below for more details comparing closed home sales for December 2021 to December 2020.

The seven-county Twin Cities region comprises Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington counties. The official Minneapolis-St. Paul-Bloomington metropolitan statistical area recognized by the Census Bureau consists of 16 counties, on
which MAR & SPAAR local associations report