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Homes for sale down. Pending sales flat for first time since May 2020

MINNEAPOLIS (March 10, 2021) — Demand remained high in the Minnesota housing market in February as homebuyers competed with multiple offers for diminishing housing stock. Closed sales were up +5.8% over last year, but new listings sank -14.8%.  Since last May, pending sales fell flat for the first time and were down -0.8% from February 2020. Adding to the pressure, homes for sale fell 51.6%, the largest decrease in a year. Shrinking inventory defined this seller’s market, pushing the median sales price up +10.6% to $282,000. Days on the market retracted by -25.47% over last year, down to just 47 days. Correspondingly, homes received 99.0% of the original price received, a +2.3% increase over last year.

“In a heated market where there isn’t even a month of supply available, many sellers are in the enviable position of sometimes getting offers that exceed the list price,” said Chris Galler, CEO of Minnesota Realtors. “As we come into the spring selling season, more inventory will come online. But as long as interest rates remain favorable, buyers will come out in even greater numbers. A year into the pandemic, changes in work and lifestyle continue to fuel the desire for more space. The dropping rate of COVID infections in Minnesota and the increasing number of vaccinated individuals also will likely impact consumer behavior. So, although we’re anticipating another record-breaking sales season, it is likely that supply will run short of the overwhelming demand.”

Across the state, there were only 7,460 homes available for sale compared to 15,417 in February 2020.

February year-over-year summary:

• Closed sales: +5.8% to 4,424
• Median sales price: +10.6% to $282,00
• Average sales price: +10.5% to $319,813
• New listings: -14.8% to 6,184
• Pending sales: -0.8% to 5,762
• Days on the market: -25.4% to 47 days
• Homes for sale: -51.6% to 7,460

Closed Home Sales Across Minnesota by Region

Closed sales were up by double digits in eight of the 13 Minnesota regions, with the Upper MN Valley hitting a 100% increase over February 2020. South Central and the seven-County Twin Cities saw more modest gains, while the Arrowhead was flat to last year. Southwest Central and Southeast both marked single-digit declines. See the chart below for more details comparing February 2021 to February 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.

Source: MNR news

Pending sales remain up but soften to single digits. New listings decline.

The Minnesota housing market remained strong in January, with year-over-year closed sales up +16.2% and pending home sales up +5.2%, according to Minnesota Realtors^® (MNR), the membership organization supporting all 21,000 Realtors in the state. Market demand for homes remained high, with average days on market at 46 days, which is two fewer weeks or a 25.8% reduction when compared to January 2020.

With only one month’s supply of inventory available — and new listings down by -12.1% — competition among buyers for scarce housing stock is intense. By the end of January, there were only 7,860 homes for sale in the state, a -48.3% decline from January 2020. On average, sellers were getting +98.3% of their asking price, which is a +2.6% increase compared to last year at this time.

“January was still very much a seller’s market. Heightened demand was met with a decline in new listings, exacerbating the impact of historically low inventory in a market where consumers are primed to buy,” said Chris Galler, CEO of Minnesota Realtors. “With the shifts in lifestyle and working habits brought on by the pandemic, people are hungry for space. As long as interest rates remain low, this trend is likely to continue. As spring approaches, we are likely to see another very hot selling season.”

Statewide, the median sales price jumped +10.9% over January 2020 to $272,000, and the average sales price hit $310,785, up +8.4%.

January year-over-year summary:

• Closed sales: +16.2% to 4,788
• Median sales price: +10.9% to $272,00
• Average sales price: +8.4% to $310,785
• New listings: -12.1% to 5,274
• Pending sales: +5.2% to 4,905
• Days on the market: -25.8% to 46 days
• Homes for sale: -48.3% to 7,860

Closed Home Sales Across Minnesota by Region

January saw double-digit increases in year-over-year closed sales in 11 out of the 13 Minnesota regions, with the Northwest region topping the chart with a more than 40%hike. Only two regions, Southeast and West Central, showed more modest increases of+6.4% and +3.5% respectively. See chart below for more details comparing January 2021 to January 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, which is what MAR & SPAAR local associations report on.

Source: MNR News

Despite the headwinds, 2020 was a record-breaking year for housing

January 26, 2021 Tags: Market DataPress Releases

(January 26, 2021) – According to the 2020 annual report from the Minneapolis Area REALTORS^® and the Saint Paul Area Association of REALTORS^®, both buyer and seller activity in the 16-county Twin Cities metro last year outpaced 2019 levels. After a brief pullback following the onset of the pandemic—and aided by remote work, distance learning, historically low rates and a desire for more space—market activity recovered quickly and ended the year posting several new records across various metrics.

Seller activity rose a modest 0.1 percent from 2019 while closed sales were up 7.7 percent. That marks the highest sales figure since at least 2003 and the highest new listings count since 2016. Listing activity was constrained due to health concerns, remodeling activity, a lack of options and homeowners staying in their homes longer.

“Predictably, the result of record sales combined with ultra-low inventory meant rising prices and sellers accepting stronger offers in less time,” according to Tracy Baglio, President of the Saint Paul Area Association of REALTORS®.

Governor Walz’s shelter-in-place order paused market activity in April and May, which created pent-up demand that pushed the spring market into summer and the summer market into fall. Buyers were still more eager to purchase than sellers were to list, meaning multiple offers remained commonplace—particularly at the more affordable price points where the inventory shortage is even more pronounced.

“Despite several challenges, the Twin Cities housing market exceeded all expectations,” said Todd Walker, President of Minneapolis Area REALTORS®. “Inventory remained a hurdle, but homeowners have never had so much equity in their homes and buyers haven’t seen rates this low in 50 years, offsetting rising prices.”

The median sales price rose 8.9 percent to $305,000, a record high. On average, sellers obtained 99.8 percent of their list price—the highest since at least 2003. Homes sold quickly. Half the sales had accepted offers in under 18 days. Importantly, all areas, price points and property types are unique.

Signed contracts rose 10.0 percent in Minneapolis and 16.4 percent in St. Paul, suggesting core cities remain attractive. With prices slightly lower, market times higher and offers weaker, the condo market continues to lag other segments. Aided by favorable jumbo rates and a recovered stock market, sales of luxury properties ($1M+) have been soaring higher—up 25.4 percent from 2019.

One thing is clear: the housing market continues to outperform, despite several headwinds.

2020 BY THE NUMBERS (COMPARED TO 2019)

• Sellers listed 76,348 properties on the market, a 0.1 percent increase from 2019
• Buyers closed on 64,479 properties, up 7.7 percent (65,770 pending sales, up 9.7 percent)
• The Median Sales Price rose 8.9 percent to $305,000
• Inventory levels fell 39.3 percent to 5,080 units
• Months Supply of Inventory was down 47.1 percent to 0.9 months (5-6 months is balanced)
• Days on Market decreased 12.2 percent to 43 days, on average (median of 18, down 21.7 percent)
• Changes in Sales activity varied by market segment
  • Single family sales were up 10.8 percent; condo sales fell 10.6 percent; townhome sales increased 3.4 percent
  • Traditional sales rose 8.4 percent; foreclosure sales were down 20.9 percent; short sales fell 25.9 percent
  • Previously owned sales were up 7.3 percent; new construction sales climbed 14.1 percent