Sales up, price growth strong, market times fast, but new listings down and supply levels very low

(February 17, 2021) – According to new data from the Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, buyer activity in the 16-county Twin Cities metro continues to climb above 2020 levels. Closed sales rose 14.6 percent from last January and new signed purchase agreements were up 5.6 percent over last year. That marks the strongest January pending sales since 2005 and the highest closed sales figure since at least 2003.

Despite the unyielding commitment from buyers in 2020, there are not enough homes on the market—particularly in the affordable ranges—to satisfy the historic demand. Sellers listed 8.8 percent fewer homes than January 2020, further shrinking an already historically low inventory of available homes.

“Last year was incredibly strong and so far 2021 is keeping up the pace,” according to Todd Walker, President of Minneapolis Area REALTORS®. “Rates are as attractive as they’ve ever been and the demand is persistent, but the challenge is still the lack of supply.”

The number of homes for sale in January was down 42.6 percent compared to a year ago. That amounts to 0.9 months of supply, while a balanced market has 4-6 months of supply. This dynamic has given rise to four other trends: sellers are getting historically strong offers, homes are selling in record time, multiple offers and competitive bidding have become commonplace and home prices are rising quickly relative to incomes.

“There are many motivated buyers out there but not nearly enough homes for them on the market,” said Tracy Baglio, President of the Saint Paul Area Association of REALTORS®. “Proper pricing is still critical, but sellers are accepting offers that are at or very close to list price, occasionally above it in the first-time buyer segments.”

Pending sales were up 39.4 percent in Minneapolis and 14.0 percent in St. Paul, indicating buyer interest remains quite strong in the core cities. Perhaps surprisingly, condos saw the strongest sales growth followed by single family and then townhomes. New construction sales rose 12.2 percent compared to a 16.0 percent increase for previously owned homes. Sales of luxury properties ($1M+) have been rallying—up 75.0 percent from last January.

For more information on weekly and monthly housing numbers visit www.mplsrealtor.com or www.spaar.com

January 2021 by the numbers compared to a year ago

• Sellers listed 3,989 properties on the market, an 8.8 percent increase from last January
• Buyers signed 3,519 purchase agreements, up 5.6 percent (3,335 closed sales, up 14.6 percent)
• Inventory levels fell 42.6 percent to 4,823 units
• Months Supply of Inventory was down 47.1 percent to9 months (5-6 months is balanced)
• The Median Sales Price rose 11.5 percent to $301,000
• Days on Market decreased 37.3 percent to 42 days, on average (median of 22, down 50.0 percent)
• Changes in Sales activity varied by market segment
  • Single family sales were up 16.3 percent; condo sales rose 18.3 percent; townhome sales increased 7.8 percent
  • Traditional sales rose 16.2 percent; foreclosure sales were down 35.1 percent; short sales fell 44.4 percent
  • Previously owned sales were up 16.0 percent; new construction sales climbed 12.2 percent

From The Skinny Blog.

(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

From The Skinny Blog.

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

From The Skinny Blog.

New listings and sales up, price growth strong, but supply levels wearing thin

(October 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 both increased from 2019.

This summer and even early fall market continue to resemble more of a spring market. Although some activity from the 2nd quarter was shifted into the 3rd quarter, buyers more than made up for the lost time and continued to ink new records. Sales activity year-to-date is already above last year. Seller activity—while still lagging—made its largest gain since March.

Specifically, pending sales rose 27.7 percent compared to last September to 6,443, marking at least an 18-year record high for the month going back to 2003. At 7,771, new listings were up 9.8 percent, which was the highest September since 2008.

“The demand out there in the market at this time of year is truly remarkable—especially during a pandemic,” according to Linda Rogers, President of Minneapolis Area REALTORS®. “Even though seller activity is on the rise, inventory levels remain extremely low, particularly in the affordable ranges. Serious buyers should be prepared to write strong offers quickly.”

While nothing about 2020 could be called predictable, one predictable outcome of historically strong housing demand and tight supply is rising prices. The metro-wide median sales price rose 10.8 percent to $310,000, the largest year-over-year gain since February 2018. The median sales price for new homes, however, rose 2.7 percent to $417,000 while existing home prices rose 11.1 percent to $300,000.

Multiple offer situations remain common as a large pool of buyers compete over a thinning stock of properties. Sellers, on average, accepted offers of 100.5 percent of their original list price—marking a new high for any month going back to at least 2003. A balanced market typically has 5-6 months of supply. At 1.7 months, sellers are still in the driver’s seat in most areas.

With such an imbalance in market forces, properties sold 31.8 percent faster than last year. Half the sales occurred in less than 15 days, tying with August for a 14-year record pace. “Even though activity is strong overall,” said Patrick Ruble, President of the Saint Paul Area Association of REALTORS®. “Every city, neighborhood, price range and property type are unique.”

For example, sales rose 41.4 percent in Minneapolis and 33.8 percent in St. Paul while new listings were up 47.8 and 17.7 percent, respectively. Seller activity in Minneapolis reached its highest level since 2007, while seller activity in the metro overall reached its highest level since 2008. The region’s condo market, however, saw new listings rise 28.9 percent while sales fell 2.6 percent. The metro condo market has 4.0 months of supply while that figure is 6.0 months in Minneapolis. Perhaps driven by attractive jumbo rates, sales of homes priced over $1M are up over 60.0 percent from last September.

September 2020 by the numbers compared to a year ago

• Sellers listed 7,771 properties on the market, a 9.8 percent increase from last September
• Buyers signed 6,443 purchase agreements, up 27.7 percent (6,583 closed sales, up 21.1 percent)
• Inventory levels fell 32.0 percent to 8,936 units
• Months Supply of Inventory was down 37.0 percent to7 months (5-6 months is balanced)
• The Median Sales Price rose 10.8 percent to $310,000
• Cumulative Days on Market decreased 15.9 percent to 37 days, on average (median of 15, down 31.8 percent)
• Changes in Sales activity varied by market segment
  • Single family sales were up 34.0 percent; condo sales fell 2.6 percent; townhome sales increased 16.5 percent
  • Traditional sales rose 29.6 percent; foreclosure sales were down 47.1 percent; short sales were flat
  • Previously owned sales were up 26.7 percent; new construction sales climbed 53.1 percent

  From The Skinny Blog.