Properties sitting longer as interest rates rise; bidding wars ease
MINNEAPOLIS (October 12, 2022) — In September, a cooling trend continued as closed sales were down 18.2% compared to a year ago. New listings also decreased, slipping 17% below last year with 8,384 properties coming on the market. The median sales price was up 4.8% to almost $325,000, although sellers were receiving slightly less than their asking price on average, down about 2% from September 2021. Homes were sitting on the market longer, up more than 18% to 32 days on average. Slower moving inventory nudged the number of homes for sale up 2.1% to nearly 14,000 properties across the state. Overall, there was two months’ supply of available housing inventory in September, up 17.6% over last year and also marks the highest level of inventory since 2020.“The slower market activity we’re seeing is the result of several factors,” said Chris Galler, CEO of Minnesota Realtors. “Interest rates on a 30-year fixed mortgage passed 7% in late September, making it more difficult for buyers to enter the market. This is especially true for first-time buyers. Inflationary pressures in the wider economy are also impacting buyers’ bank accounts. These factors are heightening the normal decline we see in the fall. However, it’s important to recognize that the market is still strong, and that sellers are getting offers with good terms when properties are priced accurately for local conditions. Bidding wars are over, and buyers are better positioned to negotiate for a home that might have been out of reach only a few months ago.”
MINNEAPOLIS (October 12, 2022) — In September, a cooling trend continued as closed sales were down 18.2% compared to a year ago. New listings also decreased, slipping 17% below last year with 8,384 properties coming on the market. The median sales price was up 4.8% to almost $325,000, although sellers were receiving slightly less than their asking price on average, down about 2% from September 2021. Homes were sitting on the market longer, up more than 18% to 32 days on average. Slower moving inventory nudged the number of homes for sale up 2.1% to nearly 14,000 properties across the state. Overall, there was two months’ supply of available housing inventory in September, up 17.6% over last year and also marks the highest level of inventory since 2020.“The slower market activity we’re seeing is the result of several factors,” said Chris Galler, CEO of Minnesota Realtors. “Interest rates on a 30-year fixed mortgage passed 7% in late September, making it more difficult for buyers to enter the market. This is especially true for first-time buyers. Inflationary pressures in the wider economy are also impacting buyers’ bank accounts. These factors are heightening the normal decline we see in the fall. However, it’s important to recognize that the market is still strong, and that sellers are getting offers with good terms when properties are priced accurately for local conditions. Bidding wars are over, and buyers are better positioned to negotiate for a home that might have been out of reach only a few months ago.”
September year-over-year summary of key market indicators:
- Closed sales decreased 18.2% to 7,501
- Median sales price increased 4.8% to $324,900
- Average sales price increased 6.8% to $378,231
- New listings decreased 17.0% to 8,384
- Pending sales decreased 26.9% to 5,969
- Days on the market increased 18.5% to 32 days
- Homes for sale increased 2.1% to 13,828
Closed Home Sales Across Minnesota by Region
In September, closed sales declined in 10 out of 13 regions compared to a year ago, bringing Minnesota’s average number of closed home sales down 18.2% year over year. Three regions reported increases: Upper MN Valley at 7.3%, Southwest at 6.1%, and Northwest at 2%. The smallest declines were seen in Southwest Central at 3.1%, North Central at 3.7%, and Arrowhead at 3.8%. The largest declines were reported in East Central at 17.3%, Central at 20.7%, and 7-County Twin Cities at 23.6%. See the chart below for more details comparing closed home sales for September 2022 to September 2021.
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, onwhich MAR & SPAAR local associations report.View full regional and county reports here.