New listings drop as housing supply continues to shrink
MINNEAPOLIS (April 12, 2021) — In March, the shortage of affordable housing continued to squeeze a heated market driven by rising buyer demand, according to Minnesota Realtors® (MNR), the membership organization supporting all 22,000 Realtors in the state. Although closed sales increased +3.1% over last March, and pending sales were up +12.1%, activity was dampened by a -10.9% decline in new listings. Homes for sale were down -54.8% over last year, leaving only a one-month supply of inventory statewide. These factors made for an extremely competitive market where the median sales price rose +10.1% to $295,000, and homes went from listing to closing in only 42 days, down -26.3% from 2020. On average, properties received 100.7% of the original price received, up +2.8% from a year ago. In total, March marked a strong end to Q1, with closed sales up +8.5% year to date.
“There’s no doubt that we will be in a seller’s market well into the future,” said Chris Galler, CEO of Minnesota Realtors. “Factors that were in play even before the pandemic continue to shape the housing environment, including historically low interest rates and a stubbornly persistent shortage of homes. Supply is further depressed by homeowners who are reluctant to sell their properties for fear of being unable to purchase an affordable home in the area where they are relocating. Despite these challenges, pending sales indicate that we can anticipate another very active selling season right through the summer. We certainly have come a long way from the uncertainty following the governor’s Stay Home MN order in March of last year.”
Across Minnesota, there were only 7,738 homes for sale in March, compared to 17,124 in March 2020.
March year-over-year summary:
- Closed sales: +3.1% to 5,917
- Median sales price: +10.1% to $295,000
- Average sales price: +11.9% to $338,707
- New listings: -10.9% to 9,202
- Pending sales: +12.1% to 8,101
- Days on the market: -26.3% to 42 days
- Homes for sale: -54.8% to 7,738
Closed Home Sales Across Minnesota by Region
Eleven of Minnesota’s 13 regions saw increases in closed sales over March 2020. Five more regions marked single digit increases. Only two areas saw declines: Southeast with -6.4% and Southwest Central with -7.8%. See the chart below for more details comparing March 2021 to March 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.