Category Archives: The Skinny

Prices dip for first time since 2012 but sellers still receive over asking price

  • The median sales price was down 0.7 percent to $367,500
  • The average market time was up 60.7 percent to 45 days
  • New listings down 27.9 percent; pending sales down 28.8 percent

(May 17, 2023) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, home prices dipped slightly from last April. Both buyer and seller activity were also lower compared to last year.

Sales & Prices

Prices were flat in March and down less than 1.0 percent in April. Despite a slight softening in prices, sellers were still getting offers above their list price, on average (100.1 percent) despite a 28.8 percent decline in sales. These two dynamics seem to portray conflicting pictures. While still present, bidding wars this year haven’t been as extreme as they have over the last couple years. Luxury market activity also cooled slightly more than the rest of the market—though it’s too early to label this a trend. Townhomes tend to sell for about 25.0 percent less than single family homes and made up the largest share of overall closed sales since 2006. This is mostly due to sales in other segments cooling faster than townhomes, but still impacts overall prices.

Home prices are up 28.1 percent since March 2020 but down 0.7 percent from April 2022. “Homeowners sometimes panic when prices soften while buyers often rejoice,” said Jerry Moscowitz, President of Minneapolis Area REALTORS®. “But it’s important to remember that it simply reflects the cross section of homes selling and doesn’t necessarily affect your home’s value. That’s why home buyers should have at least a 5-7 year timeframe.” Sellers are also still getting solid offers in a reasonable timeframe. Some buyers are choosing smaller homes with fewer bedrooms to contain their monthly mortgage payments. At a median of 17 days, homes are still selling as quickly as they did in April 2020. There are just fewer of those sales. But there are also fewer listings. Both supply and demand downshifting together means the balance between buyer and seller activity remains tight as the market remains undersupplied.

Listings and Inventory

In April, sellers brought 5,170 new listings online or 27.9 percent fewer than last year. Inventory levels trickled 4.5 percent lower. Some sellers are choosing to stay put and wait instead of selling for a lower price. Most sellers are also buyers and higher mortgage rates have harmed affordability significantly. “Make no mistake: multiple offers are still happening, and some properties are selling in a few days or less for well over asking,” said Brianne Lawrence, President of the Saint Paul Area Association of REALTORS®. “But this new environment means buyers are being more selective and budget minded.”

The Twin Cities metro is still a seller’s market, just not to the same degree as last year. April’s months supply of inventory was up an even 25.0 percent. That meant we had 1.5 months’ supply of inventory at month-end. Typically 4-6 months of supply are needed to reach a balanced, neutral market.

Location & Property Type

Market activity varies by area, price point and property type. New home sales rose 20.0 percent while existing home sales were down 32.9 percent. Single family sales fell 31.5 percent, condo sales declined 36.1 percent and townhome sales were down 14.4 percent. Sales in Minneapolis decreased 36.4 percent while Saint Paul sales fell 28.6 percent. Cities like North Branch, White Bear Township, Watertown and Mahtomedi saw the largest sales gains while Carver, New Brighton, North St. Paul, Hugo and Lake Elmo all had notably lower demand than last year.

April 2022 Housing Takeaways (compared to a year ago)

  • Sellers listed 5,170 properties on the market, a 27.9 percent decrease from last April
  • Buyers signed 4,029 purchase agreements, down 28.8 percent (3,263 closed sales, down 32.2 percent)
  • Inventory levels shrank 4.5 percent to 6,155 units
  • Month’s Supply of Inventory rose 25.0 percent to 1.5 months (4-6 months is balanced)
  • The Median Sales Price slipped 0.7 percent to $367,500
  • Days on Market rose 60.7 percent to 45 days, on average (median of 17 days, up 112.5 percent)
  • Changes in Sales activity varied by market segment
    • Single family sales decreased 31.5 percent; Condo sales were down 36.1 percent & townhouse sales fell 14.4 percent
    • Traditional sales declined 29.1 percent; foreclosure sales rose 5.9 percent; short sales increased 100.0 percent (3 to 6)
    • Previously owned sales decreased 32.9 percent; new construction sales rose 20.0 percent


From The Skinny Blog.

Home prices flat, buyer and seller activity still well below last year

  • The median sales price was unchanged at $355,000
  • The average market time was up 62.9 percent to 57 days
  • New listings down 23.9 percent; pending sales down 27.9 percent

(April 14, 2023) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, home prices flattened out and held steady from last March. The metro’s median sales price stands at $355,000. Buyer and seller activity are still down around 25.0 percent from year-ago levels.

Sales & Listings

In March, sellers brought 4,980 new listings online which amounted to 23.9 percent fewer than last year. Of those and other active listings that sold, half lasted fewer than 27 days on market. That may seem high compared to last year’s figure of 12 days on market, but it’s in line with 2018, 2019 and 2020 for this time of year. This is another sign that normalizing demand has had a stabilizing effect on the market.

“While we do still see some competition for the most desirable listings, buyers don’t feel quite as rushed as they did a year or so ago, and they are being more selective,” said Jerry Moscowitz, President of Minneapolis Area REALTORS®. “The challenge now is on the monthly payment side which has forced buyers to think more critically about their options and budget.” Buyer activity continued to decline in the wake of the Federal Reserve’s rate hiking campaign, which has increased the cost of borrowing notably. Last month, buyers signed 3,767 purchase agreements, 27.9 fewer than a year ago. It was a similar story for closings—the 3,156 closed deals in March were down 20.5 percent. Largely because of rising rates, home sales have now seen 10 consecutive months of double-digit year-over-year declines that started in June 2022.

This means that sellers have had to adjust their expectations. There’s at least two sides to every story, and what’s seen as a return to normal for some could also be viewed as a downturn from a seller’s perspective. Sellers accepted an average of 98.6 percent of their list price compared to 102.7 percent last year. Price negotiations have moved slightly in buyers’ favor. But overall, the balance of the market has remained relatively tight because both buyer and seller activity have downshifted in tandem.

Inventory & Home Prices

The increases in home prices have dissipated as buyer activity has come down from record highs. Bidding wars have eased but not disappeared. “Even as sales have slowed from record highs, motivated buyers are out there but not to the same degree as recently,” said Brianne Lawrence, President of the Saint Paul Area Association of REALTORS®. “That means prices aren’t being pushed up like they were. This is welcomed news for buyers, but sellers are still getting solid offers in a reasonable timeframe.”

The Twin Cities metro is still technically in a seller’s market, just not to the same degree as last year. There were 5,769 homes available for sale at the end of March, or 2.1 percent more than last year. Since buyer demand has waned and our inventory rose slightly, March’s month’s supply of inventory was up 27.3 percent. That meant we had 1.4 months’ supply of inventory at the end of the month. Typically 4-6 months of supply are needed to reach a balanced, neutral market.

Location & Property Type

Market activity varies by area, price point and property type. New home sales fell 6.7 percent while existing home sales were down 21.1 percent. Single family sales fell 22.0 percent, condo sales declined 28.9 percent and townhome sales were down 3.9 percent. Sales in Minneapolis decreased 26.0 percent while Saint Paul sales fell 21.9 percent. Cities like Watertown, Victoria, Mendota Heights, Blaine and Hudson saw the largest sales gains while Robbinsdale, Mound, Isanti and New Richmond all had notably lower demand than last year.

March 2022 Housing Takeaways (Compared To A Year Ago)

  • Sellers listed 4,980 properties on the market, a 23.9 percent decrease from last March
  • Buyers signed 3,767 purchase agreements, down 27.9 percent (3,207 closed sales, down 20.5 percent)
  • Inventory levels grew 2.1 percent to 5,769 units
  • Month’s Supply of Inventory rose 27.3 percent to 1.4 months (4-6 months is balanced)
  • The Median Sales Price was flat at $355,000
  • Days on Market rose 62.9 percent to 57 days, on average (median of 27 days, up 125.0 percent)
  • Changes in Sales activity varied by market segment
    • Single family sales decreased 22.0 percent; Condo sales were down 28.9 percent & townhouse sales fell 3.9 percent
    • Traditional sales declined 20.1 percent; foreclosure sales rose 11.1 percent; short sales increased 42.9 percent
    • Previously owned sales decreased 21.1 percent; new construction sales declined 6.7 percent

Twin Cities Home Prices Flattening Out with Latest Rate Spike

  • Median sales price of Twin Cities homes rose 0.6 percent to just under $342,000
  • Buyer activity down 23.6 percent with 2,932 pending sales
  • Sellers listed 24.3 percent fewer homes compared to last February

(March 15, 2022) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, the median sales price across the Twin Cities grew 0.6 percent to $342,000. Home price growth has flattened out in the face of higher mortgage rates and deteriorating affordability.

Inventory & Home Prices

Although home prices have flattened out, they were still up slightly year-over-year. It’s possible that home prices soften in the coming months if rates rise further or remain sticky. “People should understand that their home hasn’t necessarily lost value simply because the median price falls,” according to Jerry Moscowitz, President of Minneapolis Area REALTORS®. “The median reflects the mid-point where half the homes sell for more and half for less. If there are more luxury properties, new homes or condos selling, that all impacts prices. So does supply and demand.”

Home buyers have been able to purchase bigger, nicer homes when rates were low because the payment allowed them to. That’s changed. Buyers are more willing to look at other property types, smaller homes and in different areas. That doesn’t mean every home out there is worth any less, but likely means those that do sell may have to be flexible and make some concessions.

Given the pullback in sales, we had 7.1 percent more homes on the market at month-end. Before buyers celebrate more options, the metro only has 1.3 month’s supply of inventory. Typically 4-6 months of supply are needed to reach a balanced market. Since both sales and listings have come down in tandem, the market remains fairly thin. That said, sellers don’t quite have the leverage they’ve enjoyed of late.

Sales & Listings

The Federal Reserve’s rate hikes have taken a toll on home sales. As some buyers were sidelined by higher mortgage rates and increased monthly payments, resulting in 2,932 purchase agreements, 23.6 percent below last year. The decline in pending sales is the second smallest since July 2022—behind January of this year and hinting that perhaps the declines are easing. “We’re in a place where buyers have more leverage but lowball offers likely won’t be successful,” said Brianne Lawrence, President of the Saint Paul Area Association of REALTORS®. “That means buyers are writing offers at or slightly below list price and they can take more time to decide on what works best for them.”

Sellers brought 3,423 homes on the market in February, 24.3 percent fewer listings than last year. Half of all sellers sold their listings for over 98.2 percent of list price compared to 100.0 percent last year. And they accepted those offers after an average of 62 days on market compared to 44 last year.

Location & Property Type

Market activity varies by area, price point and property type. New home sales fell 9.2 percent while existing home sales were down 25.7 percent. Single family sales fell 26.2 percent, condo sales declined 36.0 percent and townhome sales were down 6.4 percent. Sales in Minneapolis decreased 35.0 percent while Saint Paul sales fell 33.7 percent. Cities like Corcoran, Buffalo, Watertown and St. Francis saw the largest sales gains while Hudson, Forest Lake and Carver all had notably lower demand than last year.

February 2022 Housing Takeaways (compared to a year ago)

  • Sellers listed 3,423 properties on the market, a 24.3 percent decrease from last February
  • Buyers signed 2,932 purchase agreements, down 23.6 percent (2,295 closed sales, down 20.3 percent)
  • Inventory levels grew 7.1 percent to 5,327 units
  • Month’s Supply of Inventory rose 44.4 percent to 1.3 months (4-6 months is balanced)
  • The Median Sales Price rose 0.6 percent to $342,000
  • Days on Market rose 40.9 percent to 62 days, on average (median of 44 days, up 131.6 percent)
  • Changes in Sales activity varied by market segment
    • Single family sales decreased 26.2 percent; Condo sales were down 36.0 percent & townhouse sales fell 6.4 percent
    • Traditional sales declined 23.9 percent; foreclosure sales rose 10.3 percent; short sales increased by 8 units
    • Previously owned sales decreased 25.7 percent; new construction sales declined 9.2 percent


    From The Skinny Blog.

Twin Cities Price Growth Stabilizes to Match Historic Norms

  • Median sales price of Twin Cities homes rose 2.7 percent to just under $342,000
  • Buyer activity down 19.3 percent with 2,560 pending sales
  • Sellers listed 10.6 percent fewer homes compared to last January

(February 15, 2022) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, the median sales price across the Twin Cities grew 2.7 percent to $341,995. The metro is returning to historic trends for median home price growth.

Inventory & Home Prices

The Twin Cities’ median home price grew 2.7 percent despite 19.3 percent fewer signed contracts. After about three straight years of roughly 10.0 percent year-over-year price growth, this modest increase is more aligned with the historical average of 3.2 percent across the region. While price growth is slowing, it remained positive throughout 2022 and this year is expected to continue that trend of moderating growth, barring any unforeseen circumstances.

“Anyone concerned about runaway home prices should be comforted by the more typical price growth we’re seeing, which gives buyers a chance to catch their breath and incomes a chance to catch up,” said Brianne Lawrence, President of the Saint Paul Area Association of REALTORS®. “While the Twin Cities remains a seller’s market, homes are taking longer to sell and sellers are accepting less than their list price.”

Softening buyer activity led to 14.5 percent more homes on the market at month-end, closing out January with 5,588 units in inventory. Yet we remain undersupplied—especially if interest rates moderate in response to inflation subsiding and demand once again soars. The metro only has 1.3 month’s supply of inventory. Typically 4-6 months of supply are needed to reach a balanced market.

Sales & Listings

As the market reacts to a series of aggressive rate hikes by the Federal Reserve in an effort to slow borrowing and cool an overheated economy, home buyer activity has also cooled. Facing higher mortgage rates and monthly payments than they would have in 2022, buyers signed 2,560 purchase agreements, 19.3 percent fewer than last year. Meanwhile 2,083 homes closed, down 32.2 percent from last year and the lowest figure since 2010. But that reflects contracts signed 30 to 60 days earlier.

“Sellers need to be priced right and may not see a dozen plus offers immediately, but most sellers are getting deals done with terms they’re comfortable with, and still more quickly than in the past,” according to Jerry Moscowitz, President of Minneapolis Area REALTORS®. “The truth is, what feels like a slow-down from light speed is actually close to how the market used to and probably should feel. You know, there’s actually a chance that listing you’ve been eyeing will be there later tonight or even tomorrow!”

There were 3,285 homes listed in January, 10.6 percent fewer listings than January 2022. Last month, half of all sellers sold homes for at or below 97.3 percent of their list price compared to 100.0 percent last year. Additionally, they accepted those offers after an average of 60 days on market compared to 41. Today’s sellers should be patient, flexible and ensure their expectations are in-line with market realities.

Location & Property Type

Market activity varies by area, price point and property type. New home sales fell 30.8 percent while existing home sales were down 31.3 percent. Single family sales fell 33.3 percent, condo sales declined 5.7 percent and townhome sales were down 32.3 percent. Sales in Minneapolis decreased 25.8 percent while Saint Paul sales fell 40.2 percent. Cities like St. Michael, Andover, and Minnetonka saw the largest sales gains while Savage, Eagan, and Brooklyn Park all had notably lower demand than last year.

January 2022 Housing Takeaways (compared to a year ago)

  • Sellers listed 3,285 properties on the market, a 10.6 percent decrease from last January
  • Buyers signed 2,560 purchase agreements, down 19.3 percent (2,083 closed sales, down 32.2 percent)
  • Inventory levels grew 14.5 percent to 5,588 units
  • Month’s Supply of Inventory rose 44.4 percent to 1.3 months (4-6 months is balanced)
  • The Median Sales Price rose 2.7 percent to $341,995
  • Days on Market rose 46.3 percent to 60 days, on average (median of 43 days, up 95.5 percent)
  • Changes in Sales activity varied by market segment
    • Single family sales decreased 33.4 percent; Condo sales were down 5.7 percent & townhouse sales fell 32.7 percent
    • Traditional sales declined 31.7 percent; foreclosure sales fell 22.6 percent; short sales fell 25.0 percent
    • Previously owned sales decreased 31.3 percent; new construction sales declined 30.8 percent


    From The Skinny Blog.

Rising rates pushed sales down for every month in 2022 compared to 2021

Higher mortgage rates and rising prices increased monthly housing costs for buyers

Minneapolis–Saint Paul, Minnesota (January 18, 2023) – The first and second half of 2022 couldn’t have looked more different, according to an annual report issued by Minneapolis Area REALTORS® and the St. Paul Area Association of REALTORS®®. After sales reached a 20-year high in 2021 while the number of homes for sale hit a 20-year low, sales in 2022 retreated to their lowest level since 2014 while housing inventory started to rise. That dynamic reflects higher mortgage rates—more than doubling from 3.25 percent to over 7.0 percent—seen in the back half of the year, and it’s rippled throughout virtually every other housing indicator. For sellers, the year still brought record sales prices despite slower increases as the year went on. But multiple offers over asking price in the first half gave way to rising market times and weaker offers in the second half.

“It felt like the housing frenzy was continuing into spring and summer, but the Fed [Federal Reserve] poured cold water on that in a hurry as inflation rose dramatically,” said Brianne Lawrence, President of the Saint Paul Area Association of REALTORS®. “In some ways that was a necessary evil, as that price and sales growth wasn’t sustainable long term. Real estate can be boom and bust like that. But over time, we’ll get back on track like we always do.”

Because 2020 and 2021 were such unique years, it’s worth comparing 2022 to a pre-COVID year. When compared to 2019, home sales in 2022 were down 10.3 percent. While market times are up compared to 2021, homes are still selling more quickly than in 2019 and 2020. One area where the cool-down is notable is in the strength of offers that sellers accept on a monthly basis. Although sellers received on average 100.9 percent of their list price for the year, they accepted 96.3 percent in December. That’s the lowest figure since December 2016.

“I went from sifting through more than 10 offers with my sellers to counseling them about being patient while on the market all within one year’s time,” said Jerry Moscowitz, President of Minneapolis Area REALTORS®. “Inflation may be turning a corner and rates could moderate by summer. If that happens, pent-up demand will surface and we’ll go right back to a competitive market with bidding wars where demand far exceeds supply.”

The ongoing supply-demand imbalance combined with rising rates and rising prices has truly exacerbated affordability concerns pricing too many out of the marketplace. The Housing Affordability Index reached its lowest level since at least 2004. But the Twin Cities is still better than most comparable metros. Currently, the regional median income is 95.0 percent of the necessary income needed to qualify for the median-priced home at today’s interest rates while avoiding becoming cost-burdened, which is typically defined as spending 30.0 percent or less of one’s pre-tax income on housing costs.

Overall, since both buyer and seller activity came down in tandem, the balance of market activity has remained relatively tight. Rising supply combined with falling demand can sometimes result in prices softening. But at $362,500, the median home price is still rising, albeit at a slower pace. New homes tended to outperform along with the over $1M luxury segment which even saw an increase in sales compared to last year. Although condo sales declined with the rest of the market, market times were flat while sellers accepted stronger offers.

While it was a year of fluctuations, tens of thousands of Minnesotans were able to get their housing goals met. As inflation cools the rate environment could ease. That could incentivize more demand that would still be faced with a shortage of supply. Housing supply is structural; housing demand is cyclical.
For other year-end residential real estate information and for stand-alone December 2022 data, please visit www.mplsrealtor.com and www.spaar.com.

2022 BY THE NUMBERS | COMPARED TO 2021

  • Sellers listed 68,006 properties on the market, a 10.0 percent decrease from 2021
  • Buyers closed on 53,714 properties, down 19.1 percent
  • The Median Sales Price rose 6.6 percent to $362,500
  • Inventory levels rose 16.2 percent to 5,914 units as of year-end
  • Months Supply of Inventory was up 47.1 percent to 1.4 months of supply (5-6 months is balanced)
  • Days on Market increased 10.7 percent to 31 days, on average (median of 14, up 27.3 percent)
  • Changes in Sales activity varied by market segment
    • Single family sales were down 19.2 percent; condo sales fell 20.3 percent; townhome sales decreased 17.8 percent
    • Traditional sales fell 19.2 percent; foreclosure sales rose 1.5 percent; short sales were up 6.7 percent
    • Previously owned sales decreased 20.1 percent; new construction sales fell 8.3 percent
    • $1M+ luxury sales grew 7.5 percent to a record high

From The Skinny Blog.

Sales down and inventory up amid slowing price growth

  • Buyer activity down 40.5 percent with 2,841 pending sales
  • Median sales price of Twin Cities homes rose 4.1 percent to $354,000
  • Sellers continued to hesitate, with 17.0 percent fewer new listings in November

(December 15, 2022) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, the metro saw its largest drop in year over year home sales this November, largely due to increased mortgage interest rates combined with unprecedented buyer activity in the fourth quarter of 2021.

SALES & LISTINGS

Real estate activity has cooled across the United States after a series of significant rate hikes by the Federal Reserve designed to slow borrowing in an effort to combat rising inflation. For residential real estate, that’s meant higher mortgage rates and monthly payments, which can push homeownership further out of reach for some buyers. Last month, buyers signed 2,841 purchase agreements, a staggering 40.5 percent fewer than last year and the lowest November figure in over a decade. Only 3,430 transactions closed, down 38.8 percent, which meant sellers had to be more flexible.

“Sellers are hesitant to put their home on the market because their payments would be very different,” according to Denise Mazone, President of Minneapolis Area REALTORS®. “In most cases, sellers are also then buyers, and many have chosen to stay put for now until things settle down, instead of trading up to a higher payment on a more expensive home.”

There were 3,453 homes listed in November, 17.0 percent fewer listings than November 2021. Sellers should understand that—unlike last year—they may not receive dozens of offers above asking price within hours or days of listing. Last month, half of all sellers sold homes for no more than 98.4 percent of their original listing price compared to 99.8 percent last year. Additionally, they accepted those offers after an average of 40 days on market. It’s not just the higher costs on the next home that’s concerning today’s sellers; they will need to be more patient, be willing to accept a bit less than asking price, and be prepared to sweeten the deal and/or possibly help cover some closings costs—very different dynamics than a year ago.

INVENTORY & HOME PRICES

The median home price in the Twin Cities increased by 4.1 percent to $354,000. Compared to a couple months with 10.0 percent year-over-year price growth in 2022, this moderate increase is more aligned with the historic average in the Twin Cities. While price growth is slowing, the overall direction of home prices has been positive throughout the year.

“One factor that’s kept home prices rising modestly is that seller activity has come down in tandem with sales,” said Mark Mason, President of the Saint Paul Area Association of REALTORS®. “Moderating price growth should be seen as a sign of a more sustainable market in line with longer-term trends.”

The softening in buyer activity meant 12.6 percent more homes remained on the market at month-end, closing out November with 7,629 units in inventory. Yet more supply is still needed. The metro only has 1.7 month’s supply of inventory. Typically 4-6 months of supply are needed to reach a balanced market.

LOCATION & PROPERTY TYPE

Market activity varies by area, price point and property type. New home sales fell 18.7 percent while existing home sales were down 40.2 percent. Single family sales fell 39.2 percent, condo sales declined 30.9 percent and townhome sales were down 35.3 percent. Sales in Minneapolis decreased 34.4 percent while Saint Paul sales fell 37.9 percent. Cities like Hutchinson, Medina, and Little Canada saw the largest sales gains while Savage, Monticello and Roseville all had notably lower demand than last year.

NOVEMBER 2022 HOUSING TAKEAWAYS (COMPARED TO A YEAR AGO)

  • Sellers listed 3,453 properties on the market, a 17.0 percent decrease from last November
  • Buyers signed 2,841 purchase agreements, down 40.5 percent (3,430 closed sales, down 38.8 percent)
  • Inventory levels grew 12.6 percent to 7,629 units
  • Month’s Supply of Inventory rose 41.7 percent to 1.7 months (4-6 months is balanced)
  • The Median Sales Price rose 4.1 percent to $354,000
  • Days on Market rose 33.3 percent to 40 days, on average (median of 24 days, up 50.0 percent)
  • Changes in Sales activity varied by market segment
    • Single family sales decreased 39.2 percent; Condo sales were down 30.9 percent & townhouse sales fell 35.3 percent
    • Traditional sales declined 38.5 percent; foreclosure sales rose 40.0 percent; short sales rose 150.0 percent (2 to 5 units)
    • Previously owned sales decreased 40.2 percent; new construction sales declined 18.7 percent


    From The Skinny Blog.

Higher rates continue to cool sales while prices continue their ascent

  • Buyer activity dropped 37.7 percent with 3,611 pending sales
  • Median sales price of Twin Cities homes rose 4.7 percent to $356,002
  • 30-Year mortgage rates are averaging around 7.0 percent, the highest since 2002

(November 15, 2022) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, pending sales were down by over a third in October compared to last year. The decline in buyer activity is largely a response to increased mortgage interest rates and many completing purchases in the last couple years. Meanwhile, home prices continue their ascent.

SALES & LISTINGS

Several rate hikes by the Federal Reserve have had their desired effect: to slow borrowing activity and slow the demand for capital. This has significantly cooled home sales activity across the nation, including in the Twin Cities. In October, buyers saw their mortgage interest rates increase to 7.1 percent, a 20-year record. Facing higher monthly payments (about 35.0 percent higher), buyers were reluctant to sign contracts. Pending sales fell 37.7 percent to 3,611 purchase agreements and 4,035 transactions closed, down 33.5 percent. The Twin Cities has not seen a year-over-year decline in demand this substantial since the summer of 2010.

“We quickly forget how the last two years were extraordinary and historic years for housing. There will always be a lull after that. But these rates are exacerbating this,” according to Denise Mazone, President of Minneapolis Area REALTORS®. “The reality is that this is a more typical market but doesn’t feel that way compared to the last few years. Sellers getting 104.0% of their list price in 4 hours with 40 offers is neither normal nor sustainable.”

Seller activity was also down as many hesitated to become buyers and trade in their favorable rates for higher payments. Softer demand has meant homes spend more time on the market—36 days on average or nine days longer than last October but one day longer than 2020. Sellers listed 5,019 properties on the market, 19.7 percent fewer than this time in 2021. Those that did list tended to accept a smaller share of their asking price, averaging 98.2 percent of list price.

INVENTORY & HOME PRICES

The median home price in the Twin Cities increased by 4.7 percent to $356,002. While up, the increase is down from some double-digit price gains in 2020 and 2021. In fact, it’s the smallest increase since the onset of the pandemic. Although the rate of price growth is slowing, prices continue rising as both the homes and buyers in the market skew toward higher price points. Inventory levels remain tight despite the recent shifts toward a more balanced market. The softening in demand has been met with a similar decline in new listings, keeping the balance relatively tight.

“Between changing rates, inflation, an election and a possible recession, there’s a lot of uncertainty in the air right now,” said Mark Mason, President of the Saint Paul Area Association of REALTORS®. “Despite all that, our region still has thousands of eager buyers every month searching for their next home.” October ended with 8,756 homes for sale, 5.1 percent more than last year. Weaker buyer activity has shifted our industry back towards a more balanced marketplace (4-6 months of supply), but buyers should understand we are still in a seller’s market. Month’s supply of inventory rose 26.7 percent to 1.9 months.

LOCATION & PROPERTY TYPE

Market activity varies by area, price point and property type. New home sales fell 18.3 percent while existing home sales were down 33.8 percent. Single family sales fell 32.2 percent, condo sales declined 36.4 percent and townhome sales were down 33.1 percent. Sales in Minneapolis decreased 30.0 percent while Saint Paul sales fell 33.4 percent. Cities like Corcoran, Elko New Market, St. Paul Park and Belle Plaine saw the largest sales gains while Princeton, Centerville, East Bethel and North St. Paul all had notably lower demand than last year.

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

OCTOBER 2022 HOUSING TAKEAWAYS (COMPARED TO A YEAR AGO)

  • Sellers listed 5,019 properties on the market, a 19.7 percent decrease from last October
  • Buyers signed 3,611 purchase agreements, down 37.7 percent (4,035 closed sales, down 33.5 percent)
  • Inventory levels grew 5.1 percent to 8,756 units
  • Month’s Supply of Inventory rose 26.7 percent to 1.9 months (4-6 months is balanced)
  • The Median Sales Price rose 4.7 percent to $356,002
  • Days on Market rose 33.3 percent to 36 days, on average (median of 22 days, up 57.1 percent)
  • Changes in Sales activity varied by market segment
    • Single family sales decreased 32.2 percent; Condo sales were down 36.4 percent & townhouse sales fell 33.1 percent
    • Traditional sales declined 33.1 percent; foreclosure sales rose 45.0 percent; short sales were unchanged from last year
    • Previously owned sales decreased 33.8 percent; new construction sales declined 18.3 percent


From The Skinny Blog.

Rates push sales down further as home prices continue to grow

  • Buyer activity dropped 29.7 percent for pending sales and 23.9 percent for closings
  • Median sales price of Twin Cities homes rose 6.3 percent to $362,000
  • Sellers received 98.9 percent of their original list price, on average

(September 16, 2022) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, pending sales were down by over a quarter in September compared to last year. Sellers also accepted a smaller share of their asking price as their listings took longer to sell. Despite this, the homes that are selling are transacting at higher price points than last year.

Sales & Listings

Higher mortgage rates and historically strong demand in 2021 have pushed closed home sales down by double digits for four straight months. Last month had 3,969 signed purchase agreements, 29.6 percent short of 2021 levels and the lowest September figure since 2014. As the hyper-demand from the buying frenzy of the past two years wanes, those who remain in the market have regained some leverage.

“Our buyers can pause and breathe a bit— they no longer feel compelled to skip inspection or go way over list price,” according to Denise Mazone, President of Minneapolis Area REALTORS®. “But some sellers think they’re in the same position they were in a year ago, while some buyers think they’re going to get deals like it’s 2010. As usual, the truth is somewhere in the middle.”

Seller activity was down as many sellers remain apprehensive about also becoming buyers. Softening demand has meant homes linger on the market a bit longer—31 days on average or 34.8 percent longer than last September. Fewer homeowners are willing to relinquish their interest rates and list their homes. Sellers listed 6,002 properties on the market, 17.8 percent fewer than this time in 2021. Those that did list their homes tended to accept a smaller share of their asking price. But, they get to purchase in a less frenzied market.

Inventory & Home Prices

The median home price in the Twin Cities increased by 6.3 percent to $362,000. While still up, the growth is down from double-digit price gains seen in 2020 and 2021 and is the second smallest increase in two years. Although the rate of price growth is slowing, prices remain firm and resilient in the face of declining buyer activity. Housing supply levels remain tight, despite the recent market shifts. And, the softening in demand has been accompanied by a decline in new listings, so both sides have downshifted in tandem without creating the sort of asymmetry or imbalance that could abruptly shake up prices.

“Some might see a disconnect between lower demand and strong pricing right now.” said Mark Mason, President of the Saint Paul Area Association of REALTORS®. “While prices remain firm and resilient, the rebalancing we’ve seen means sellers shouldn’t expect dozens of offers at 10 percent or more above list price on the same day they list. Buyers may feel like they have a greater likelihood of success.”

September ended with 9,002 homes for sale, only 3 more units than last year. The momentum has been shifting back towards a more balanced marketplace (4-6 months of supply), but buyers should understand we are still in a seller’s market. Month’s supply of inventory rose 18.8 percent to 1.9 months.

Location & Property Type

Market activity varies by area, price point and property type. New home sales fell 0.2 percent while existing home sales were down 24.4 percent. Single family sales fell 22.1 percent, condo sales declined 19.8 percent and townhome sales were down 26.3 percent. Sales in Minneapolis decreased 14.7 percent while Saint Paul sales fell only 10.1 percent. Cities like Pine City, Corcoran, Rush City and Delano saw the largest sales gains while Clear Lake, Centerville, St. Anthony and River Falls all had lower demand than last year.

September 2022 Housing Takeaways (compared to a year ago)

  • Sellers listed 6,002 properties on the market, a 17.8 percent decrease from last September
  • Buyers signed 3,964 purchase agreements, down 29.7 percent (4,860 closed sales, down 23.9 percent)
  • Inventory levels were flat at 9,002 units
  • Month’s Supply of Inventory rose 18.8 percent to 1.9 months (4-6 months is balanced)
  • The Median Sales Price rose 6.3 percent to $362,000
  • Days on Market rose 34.8 percent to 31 days, on average (median of 19 days, up 58.3 percent)
  • Changes in Sales activity varied by market segment
    • Single family sales decreased 22.1 percent; Condo sales were down 19.8 percent & townhouse sales fell 26.3 percent
    • Traditional sales declined 23.1 percent; foreclosure sales rose 60.9 percent; short sales were up 50.0 percent (from 2 to 3)
    • Previously owned sales decreased 24.4 percent; new construction sales declined 0.2 percent


From The Skinny Blog.

Home price growth slows as market times rise and demand cools

  • Median sales price was up just 5.6 percent to $369,750, the smallest gain since June 2020
  • Buyer activity pulled back as pending sales fell 23.8 percent
  • Homes took 26 days to sell, 18.2 percent longer than the 22 days last August

(September 16, 2022) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, both sales and listing activity were down in August while home price growth has slowed to its lowest level in two years but remains positive. Sellers also accepted lower offers as market times rose.

Inventory & Home Prices

The median home price in the Twin Cities reached $369,750 but the year-over-year growth rate is slowing. While prices are not falling, they’re not rising as quickly as they were. The 5.6 percent price growth in August is below the roughly 8.0 to 16.0 percent gains seen over the last two years. The deceleration in price growth likely reflects the pullback in demand caused by higher interest rates and economic uncertainty. Closed sales were down 20.3 percent in August compared to last year. Buyers also still face low inventory and limited options, although there’s evidence that’s changing.

“We’re seeing a less competitive landscape as the market has slowed given current interest rates,” said Denise Mazone, President of Minneapolis Area REALTORS®. “But the silver lining is that a less frenzied market could spell more inventory and opportunity for persistent buyers.”

August ended with 8,552 homes for sale, nearly flat compared to last year. Although the region is still a seller’s market, the momentum has been shifting back towards a more balanced marketplace. Month’s supply of inventory rose 13.3 percent to 1.7 months.

Sales & Listings

Buyer activity has softened compared to recent years. This is partly caused by higher mortgage rates, but it also reflects demand being pulled forward (i.e. sales that would’ve occurred in 2022/23 instead took place in 2020/21). August showed 4,981 signed purchase agreements, 23.8 percent short of 2021 levels and the lowest August figure since 2014. But seller activity reached its lowest level since August 2012. The easing of demand has impacted how quickly homes sell. Homes remained on market for an average of 26 days, 18.2 percent longer than last August.

“Sellers may notice that their homes are taking an extra few days to go under contract,” according to Mark Mason, President of the Saint Paul Area Association of REALTORS®. “But nobody talks about the fact that even this slower pace is still fast historically. A cooling of red-hot demand and a less intense landscape means a more sustainable and accessible marketplace.”

Sellers listed 6,186 properties on the market, 19.9 percent fewer than last August. Many Baby Boomers are choosing to age in place and aren’t listing their homes. Some homeowners are reluctant to trade into a higher mortgage rate on a higher priced home given economic uncertainty. And, some sellers are choosing to wait given their lack of options once their home sells. The industry has also underbuilt housing for about 15 years, and it will take time to rise out of that deficit.

Location & Property Type

Market activity varies by area, price point and property type. New home sales fell 11.0 percent while existing home sales were down 20.3 percent. Single family sales fell 19.7 percent, condo sales declined 26.7 percent and townhome sales were down 17.4 percent. Sales in Minneapolis decreased 23.3 percent while Saint Paul sales fell 18.9 percent. Cities like Monticello, Golden Valley, and Orono saw the largest sales gains while Stillwater, Chanhassen, and Fridley had lower demand than last year.

August 2022 Housing Takeaways (compared to a year ago)

  • Sellers listed 6,186 properties on the market, a 19.9 percent decrease from last August
  • Buyers signed 4,981 purchase agreements, down 23.8 percent (5,568 closed sales, down 20.3 percent)
  • Inventory levels dropped 1.3 percent to 8,552 units
  • Month’s Supply of Inventory rose 13.3 percent to 1.7 months (4-6 months is balanced)
  • The Median Sales Pricerose 5.6 percent to $369,750
  • Days on Market rose 18.2 percent to 26 days, on average (median of 15 days, up 50.0 percent)
  • Changes in Sales activity varied by market segment
    • Single family sales decreased 19.7 percent; Condo sales were down 26.7 percent & townhouse sales fell 17.4 percent
    • Traditional sales declined 20.0 percent; foreclosure sales fell 20.8 percent; short sales were up 40.0 percent (from 5 to 7)
    • Previously owned sales decreased 20.3 percent; new construction sales declined 11.0 percent


From The Skinny Blog.

Higher rates continue to cool demand, home prices still on the rise

  • Median sales price was up 7.1 percent to $375,000, the slowest increase since June 2020
  • Buyer activity was down, pending sales fell 23.3 percent
  • Homes took 22 days to sell, 15.8 percent longer than the 19 days last July

(August 15, 2022) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, buyers in the Twin Cities have struggled to keep pace with the highs of 2021. Pending sales were down 23.3 percent in July compared to last year as buyers signed 4,807 purchase agreements. Buyers have been hampered by increased mortgage rates, still-low inventory, strong home prices and some economic uncertainty.

Sales & Listings

Buyer activity has been softening for 11 of the last 12 months as most acknowledge the frenzied demand of 2020 and 2021couldn’t last. July’s pending sales volume was 12.8 percent lower than July of 2019, reflecting affordability and supply challenges but also hinting at how demand was expedited from 2022/3 into 2020/1. “Many Twin Citizens eager to take advantage of historically low rates and purchase a home leapt at the chance,” said Denise Mazone, President of Minneapolis Area REALTORS®. “Combined with rising rates, that’s left a hole in our buyer pool this year, but there is still plenty of pent-up demand for homes. Plus there’s evidence rates are easing somewhat.” There has not been an influx of supply onto the market. Home sellers listed 6,845 homes last month, down 17.0 percent from last July. Selling activity has been fairly stable overall since 2020, but continuously lagging behind the supply needed to fuel the market demand, until the recent slowdown in sales.

Inventory & Home Prices

Homes in the metro sold for a median of $375,000 last month, 7.1 percent more than last July. That was the slowest growth rate in two years and amounts to $205 per square foot. The recent downshift in buyer activity has offered a small reprieve for persistent buyers thirsty for inventory and less competition. The metro ended July with 8,694 homes for sale, 4.5 percent more than last July. In a welcome development for buyers, inventory levels have grown for three consecutive months and months supply rose to 1.7. That suggests the supply squeeze is loosening but it’s important to recognize we’re still in a strong seller’s market. “Aspiring home buyers still face competition and multiple offers, just slightly less so than the last couple years, “according to Mark Mason, President of the Saint Paul Area Association of REALTORS®. “So while the market has rebalanced slightly, it still favors sellers.”

Location & Property Type

Market activity varies by area, price point and property type. New home sales fell 18.8 percent while existing home sales were down 16.4 percent. Single family sales fell 18.1 percent, condo sales declined 24.5 percent and townhome sales were down 20.8 percent. Sales in Minneapolis decreased 17.5 percent while Saint Paul sales fell 25.0 percent. Cities like Monticello, Golden Valley, and Orono saw the largest sales gains while Stillwater, Chanhassen, and Fridley had lower demand than last year.

July 2022 Housing Takeaways (compared to a year ago)

  • Sellers listed 6,845 properties on the market, a 17.0 percent decrease from last July
  • Sellers signed 4,807 purchase agreements, down 23.3 percent (5,442 closed sales, down 20.2 percent)
  • Sellers levels grew 4.5 percent to 8,694 units
  • Month’s Supply of Inventory rose 13.3 percent to 1.7 months (4-6 months is balanced)
  • The Median Sales Price rose 7.1 percent to $375,000
  • Days on Market rose 15.8 percent to 22 days, on average (median of 11 days, up 57.1 percent)
  • Changes in Sales activity varied by market segment
    • Single family sales decreased 18.1 percent; Condo sales were down 24.5 percent & townhouse sales fell 20.8 percent
    • Traditional sales declined 18.9 percent; foreclosure sales fell 12.5 percent; short sales were down 14.3 percent
    • Previously owned sales decreased 16.2 percent; new construction sales declined 18.8 percent


From The Skinny Blog.