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December 2020 Home Prices

Seven straight months of double-digit increases in pending sales

MINNEAPOLIS (Jan. 12, 2020) – Home sales in Minnesota continued to outpace normal trends through the end of 2020. Closed sales in December rose +21.9% versus December 2019 with a total of 7,300 transactions across the state. Pending sales were also riding high with 5,118 in the pipeline, up +19.2% over a year ago.

Although new listings increased in December 2020 by +14.9%, the number of homes for sale dropped -46.1% compared to December 2019. As buyers competed for scarce inventory, the median sales price increased +10.4%, and properties averaged 43 days on the market, down -21.8% or 12 days less than December 2019. The shortage of properties pushed the average sales price up +9.9% statewide to more than $320,000, with sellers receiving 98.5% of the original price, a +2.4% increase over last year.

“The strong finish to the year stands in stark contrast to the turbulent first quarter when the spread of COVID-19 disrupted the economy and greatly slowed the housing market. As the recovery got underway in May, many buyers were highly motivated to find more spacious homes after months of lockdown imposed by the pandemic,” said Chris Galler, CEO of Minnesota Realtors. “Historically low interest rates fueled frenzied competition for diminishing inventory, making multiple offers the new norm. This level of activity has not been seen in Minnesota for 15 years.”

Overall, total pending sales for the full year 2020 totaled 94,474, up +10.6% over 2019. Closed sales reached 92,576 for the year, marking a +8.4% rise. The number of homes available for sale, however, declined -46.1% from the year before. And while new listings expanded to 106,873 properties—a +2.7% increase—they could not match demand. By the end of 2020, there were 8,403 homes for sale, which was -46.1% or 8,403 fewer homes for sale than 2019.

As market activity increased, so did the price range of homes. More than 9,700 properties sold for $500,000 and above, a +33.4 increase above 2019. By contrast, the percentage of homes in the $150,000 to $200,000 range dropped by 14.1%, with only 6,810 homes sold.

“All the indicators strongly suggest that buyer demand will remain high well into the 2021 selling season. We anticipate that mortgage rates will remain low, and buyers highly motivated to find affordable homes,” said Galler. “The only thing holding the market back is consistently sluggish inventory. That is unlikely to change until we innovate an intelligent, market-driven response that meets consumer demand. It will be a win for everyone that drives our industry forward.”

December year-over-year summary:

  • Closed sales: +21.9% to 7,300
  • Median sales price: +10.4% to $277,00
  • Average sales price: +9.9% to $320,551
  • New listings: +14.9% to 4,086
  • Pending sales: +19.2% to 5,118
  • Days on the market: -21.8% to 43 days
  • Homes for sale: -46.1% to 8,403
  • Months supply of inventory: -50.0% to 1.1

2020 year-over-year summary:

  • Closed sales +8.4% to 92,576
  • Median sales price: +8.3% to $275,000
  • Average sales price: +8.3% to $315,348
  • New listings -2.5% to 106,873
  • Pending sales +10.6% to 94,474
  • Days on market -8.2% to 45 days


Closed Home Sales Across Minnesota by Region

With one exception, every region saw double-digit increases in year-over-year closed sales. Even the Upper Minnesota River Valley — where sales were down -11.8% in November —overcame the deficit and ended 2020 with a +2.7% increase. See chart below for more details comparing December 2020 to December 2019.

housing report graph

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, which is what MAR & SPAAR local associations report on.

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Budgeting For Home Remodeling In 2021

From budget and finance to dealing with any unforeseen issues, here are some of the key things to know about home renovations and maintenance as noted in Inman news 12/31/2020.

2020 was the year of renovations for many homeowners. There were many transformations including kitchen updates, converting a bedroom to an office, and updating indoor and outdoor entertaining spaces.

When creating a budget, base it off of a worst case scenario (where you may need extra materials, your choice of materials may be out of stock or delayed, or an additional contractor may be required to repair any unforeseen issues that came up during the renovation).

Create an initial budget, but be prepared to potentially set aside 3 times that amount just in case for those unexpected issues that may arise.

Kitchens are the most popular renovation project with the average cost right around $25,424. The price can vary depending on the size of the project, but can range from $4,000 – $60,000. A quarter of the budget would cover labor, with cabinetry & fixtures ranging about $6,000 or more,  appliances $3,200 or more, and countertops $2,300 or more.

Bathrooms are the 2nd most popular remodel with a price tag averaging around $10,718. For a smaller bathroom the price could be as low as $3,500, but a larger grand master suite bath could be as high as $25,000 or more. Half of the budget would go to labor, $300 – $3,800 for a vanity, $300 – $3,000 for a shower/bath, $200 – $1,800 for fixtures, $200 – $1,350 for flooring.

Home offices were another popular remodel during 2020, while offering a possible tax benefit (see your personal accountant on how to calculate any tax benefit there may be for you). The cost range for this was $5,000 – $22,000, and was based on whether there was need to build an addition, or renovate an existing room. Desks, cabinets, and built-ins ran $1,200 – $3,900, connectivity & hardware $100 -$3,000, and soundproofing $1,000 – $2,4000.

Backyard entertaining also saw an uptick. This included: pools, pool houses, decks, porches, sunrooms, and outdoor kitchens. For a full backyard entertainment oasis having a majority of those features, home owners were looking at a price tag starting in the 6 figures.

When homeowners properly budget for a renovation, consider the cost of materials and labor, while also adding on for any unforeseen maintenances issue that may come up during any home renovation project.

 

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November 2020 Home Sale Report

Despite pandemic, this year is on-track for record-breaking sales

 Tags: Market DataPress Releases

New Listings Flat, Sales Up, Price Growth Strong, Market Times Fast, But Supply Levels Extremely Low

(December 17, 2020) – According to new data from the Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, the growth in buyer and seller activity in the 16-county Twin Cities metro continues to climb above 2019 levels. Seller activity rose 1.3 percent from last November while new purchase agreements were up 13.4 percent over last year. That marks the strongest November pending sales figure since 2004 and the highest closed sales since at least 2003.

This year, the fall and winter markets are behaving more like a spring market since activity was delayed from the spring and summer months. While sellers only listed slightly more units than last November, pending and closed sales were up significantly. Pending sales often act as a leading indicator of future demand while closings lag.

“The Twin Cities housing market continues to exceed expectations,” according to Patrick Ruble, President of the Saint Paul Area Association of REALTORS®. “Despite record sales figures, the lack of adequate supply—particularly affordable units—continues to frustrate buyers.”

Historically low mortgage rates, shifting work and learning patterns, health concerns and other factors are driving this sellers’ market. While all areas and price points are unique, sellers are getting strong offers early on. On average, sellers obtained 100.2 percent of their original list price—the highest November figure since at least 2003. At a median of 15 days, homes went under contract in record time, and 48.3 percent faster than last November.

“It’s truly impressive that sales would reach new highs during a pandemic and an otherwise challenging year,” said Linda Rogers, President of Minneapolis Area REALTORS®. “That’s of course meant rising home prices, but luckily, ultra-low interest rates have been able to partly offset that.”

Sales were up 21.5 percent in Minneapolis and 30.8 percent in St. Paul, suggesting buyers are eager to quickly snap up any new listings. And the competitive landscape means those buyers are often going above list price. With prices slightly lower, market times higher and offers weaker, the condo market continues to lag other segments. However, sales of luxury properties ($1M+) have been soaring higher—up nearly 20.0 percent YTD. One thing is clear: the housing market continues to outperform, despite the many economic headwinds.

 

 

November 2020 by the numbers compared to a year ago

  • Sellers listed 4,035 properties on the market, a 1.3 percent increase from last November
  • Buyers signed 4,640 purchase agreements, up 13.4 percent (5,624 closed sales, up 18.6 percent)
  • Inventory levels fell 37.9 percent to 6,642 units
  • Months Supply of Inventory was down 42.9 percent to2 months (5-6 months is balanced)
  • The Median Sales Price rose 10.7 percent to $310,000
  • Days on Market decreased 33.3 percent to 34 days, on average (median of 15, down 48.3 percent)
  • Changes in Sales activity varied by market segment
    • Single family sales were up 21.3 percent; condo sales fell 2.6 percent; townhome sales increased 20.6 percent
    • Traditional sales rose 19.7 percent; foreclosure sales were down 22.9 percent; short sales fell 18.8 percent
    • Previously owned sales were up 21.7 percent; new construction sales climbed 4.8 percent
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Happy Holidays!!

On behalf of all of us at Cushman Realty, we wish you a joyful holiday season!!

May your celebrations be filled with peace, love, and joy!!

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Fall Market 2020 Heading Into Winter 2020

Sales outpacing supply, prices accelerate, core cities remain strong

New Listings And Sales Up, Price Growth Accelerating, But Supply Levels Extremely Low

(November 19, 2020) – According to new data from the Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, buyer and seller activity in the 16-county Twin Cities metro continue to outpace 2019. Seller activity rose 8.4 percent compared to last October while buyer activity was up 21.8 percent, marking the strongest October sales figure since at least 2003.

Buyers are motivated by expectations of working and spending more time at home and are also buoyed by historically low interest rates. That has resulted in a highly competitive marketplace where sellers get strong offers—sometimes above asking price—in record time and often with multiple offers. It has also caused inventory levels to plummet, frustrating many buyers.

“Buyers are still out in force, which is fairly unusual for this time of year when things typically quiet down,” according to Patrick Ruble, President of the Saint Paul Area Association of REALTORS®. “But the shortage of inventory and fast pace of the market are still keeping some waiting in the wings.”

Record-low mortgage rates, a desire for more space, a shortage of listings and Millennials aging into homeownership have all led to record-setting demand and rising prices among other changes. This is unusual during a recession, which impacts people differently. The mid-market move-up ranges and luxury segments have been performing better as salaried professionals have been spared much of the hardship. Conversely, many would-be buyers in the most affordable price points have been sidelined as they’re more likely to be impacted by job or income loss.

Still firmly in the driver’s seat, sellers, on average, accepted offers at 100.5 percent of their original list price—matching a high for any month going back to at least 2003. At 35 days on average, homes across the metro sold 23.9 percent quicker than last October.

“Despite some earlier challenges, Minneapolis and St. Paul are still seeing strong sales growth,” said Linda Rogers, President of Minneapolis Area REALTORS®. “They’re still quite competitive.”

For example, new listings rose 35.5 percent in Minneapolis and 22.8 percent in St. Paul while sales were up 47.4 and 28.9 percent, respectively. Demand in the core cities is once again outpacing supply. Downtown condos are still an area of weakness, but metro-wide sales of homes priced over $1M are up over 98.0 percent from last October.

October 2020 by the numbers compared to a year ago

  • Sellers listed 6,816 properties on the market, an 8.4 percent increase from last October
  • Buyers signed 6,249 purchase agreements, up 21.8 percent (6,674 closed sales, up 22.3 percent)
  • Inventory levels fell 34.5 percent to 8,080 units
  • Months Supply of Inventory was down 40.0 percent to5 months (5-6 months is balanced)
  • The Median Sales Price rose 12.5 percent to $315,000
  • Days on Market decreased 23.9 percent to 35 days, on average (median of 14, down 44.0 percent)
  • Changes in Sales activity varied by market segment
    • Single family sales were up 24.07percent; condo sales rose 8.6 percent; townhome sales increased 17.6 percent
    • Traditional sales rose 22.3 percent; foreclosure sales were down 20.4 percent; short sales fell 6.7 percent
    • Previously owned sales were up 20.1 percent; new construction sales climbed 43.4 percent

All information is according to the Minneapolis Area REALTORS® and Saint Paul Area Association of REALTORS based on data from NorthstarMLS. We serve the Twin Cities 16-county metro area and western Wisconsin.