• Signed purchase agreements statewide were up 8.5%, and new listings were down 0.9%
• The statewide median sales price increased 4.4% to $340,000
• Market times across the state rose 12.5% to 45 days, and inventory was up 3.9% to 14,398

(Dec. 17, 2024) – According to new residential market data from the Minnesota state and Twin Cities metro REALTOR® associations, sales, prices and inventory all rose in November while seller activity was down slightly.

Sellers, Buyers and Housing Supply

With 11 months in the books so far, we’re getting a clear picture of how the 2024 housing market performed relative to past years. For November, pending sales statewide rose for a second month in a row while new listings showed their first decline in three months. Five out of 14 regions across the state saw year-over-year gains in new listings while 8 of 14 regions saw year-over-year increases in pending sales. All 14 regions saw rising home prices compared to last November. Twelve of 14 regions showed inventory growth from last year. The biggest gain in new listings was in the Alexandria region; the largest increase in pending sales was in the Detroit Lakes region; the largest jump in home prices was in the Grand Rapids area. St. Cloud was the tightest and most undersupplied market. The Twin Cities metro is the highest priced area and accounts for 66.3% of statewide sales activity and 60.2% of statewide inventory.

Buyers remain rate-sensitive, though perhaps less than in the recent past. In November, the 30-year mortgage rate averaged its highest level since July of this year. Despite that, statewide pending sales rose 8.5%, their second largest increase in eight months. This could signify a growing acceptance of the current rate environment. There’s also a high degree of pent-up demand to make a move. But listings declined 0.9% in November, which was essentially flat. The Federal Reserve is likely to cut its benchmark rate this month, but the Fed could be slower to cut rates in 2025. That means mortgage rates are still likely to come down, but at a slower pace than anticipated. While that should help with affordability, there are concerns about whether rising insurance rates and property taxes could negate any progress. It’s still worth noting that wage growth has been exceeding the rate of inflation. Slower growth in home prices combined with strong wage growth could also help improve affordability without home prices falling.

“We’re at a time of year when buyers can take advantage of a slower pace and a calmer, less competitive environment,” said Geri Theis, President of Minnesota Realtors®. “My buyers in beautiful southeastern Minnesota are enjoying the fact that we have the most inventory since 2019.”

On the active supply side, inventory levels rose 3.9% compared to last November. That indeed puts the current inventory figure at its highest level for any November since 2019—yet still 26.7% below that level. While buyers can take some comfort in that, it’s still important to recognize the ongoing supply shortage, despite recent inventory growth across the state and metro. The residential marketplace continues to rebalance and normalize. Every month this year has had a higher month’s supply of inventory compared to 2023. But the triple punch of higher prices, higher interest rates and low supply is still hindering would-be buyers.

Prices, Market Times and Negotiations

Every location and market segment is unique. Some listings fetch multiple offers and close for over list price while other sellers are accepting offers below asking price. Overall, sellers accepted 96.7% of their original list price statewide and 97.6% in the metro—both more or less flat from last year. And those offers were accepted after an average of 45 days on market statewide and 50 days in the metro—both figures up from a year ago.

“I see buyers showing more interest yet also being more cautious,” said Jamar Hardy, President of Minneapolis Area REALTORS®. “And part of that is that they’re slowly but surely seeing more options hit the marketplace. Minneapolis and the surrounding suburbs in particular offer a wide array of housing options across the entire price spectrum.”

The statewide median home price was up 4.4% to $340,000 while the Twin Cities price was up 3.4% to $375,000. Aside from more choices for buyers, improved housing supply should also translate to less upward price pressure and thus more modest price growth. All real estate markets are local. A few hours north of Minneapolis, the median home price in Grand Rapids rose nearly 30.0% but stood at $270,000. Just 40 minutes east of there—in the heart of the Iron Range—the median price was $160,000 in the Hibbing and Virginia area. And homes two hours west of Minneapolis in the Willmar area are selling for around $215,000. In Rochester, just over an hour southeast of the Twin Cities, home prices are closer to $285,000. These November figures are always lower than their summer highs but are all higher than a year ago.

“Many buyers and sellers are feeling renewed optimism about making a move and are returning to the market,” said Amy Peterson, President of the Saint Paul Area Association of REALTORS®. “Realtors are engaging in meaningful conversations about the full scope of homeownership costs, and buyers are growing more comfortable with current interest rates. By understanding the unique goals and options of each buyer and seller, we can provide thoughtful guidance and tailor solutions to help them navigate today’s challenging market conditions.”

Locational Differences | Minnesota statewide

Market activity always varies by area, price point and property type. Regions such as Alexandria, Mankato and Brainerd saw the largest gains in seller activity. St. Cloud, Willmar and Rochester had the largest gains in pending sales. Homes sold the fastest in the Duluth/North Shore region along with St. Cloud and Rochester. Prices were highest in the Twin Cities followed by Detroit Lakes and Brainerd. The most affordable regions of the state were Hibbing/Virginia and Willmar. Every region is undersupplied except Bemidji, which is relatively well balanced.

Locational Differences | Twin Cities Metro

For cities with at least five sales, Maple Lake, Hanover and Chisago had the largest sales gains. The highest priced areas were North Oaks, Medina and Orono while the most affordable areas were Little Canada, Pine City and Lonsdale. Homes sold the quickest in Ham Lake, Lonsdale and Spring Lake Park but took the longest to sell in Columbus, Hanover and North Oaks. The most undersupplied markets were St. Bonifacius, Richfield and North St. Paul while the most oversupplied markets were Hanover, Cologne and Scandia.

From The Skinny Blog.

• Signed purchase agreements were up 10.4% statewide, and new listings were up 9.1%
• The median sales price increased 5.3% to $347,500
• Market times rose 10.5% to 42 days, and inventory was up 8.2% to 16,281

(Nov. 14, 2024) – According to new data from the Minnesota state and Twin Cities metro REALTOR® Associations, listings, sales, prices and inventory all rose in October.

Sellers, Buyers and Housing Supply

Mortgage rates hovered between 6.0–7.0% all month long, but buyers seem to be adjusting to the current rate environment as pending sales rose a strong 10.4% statewide and 14.3% in the metro. The average 30-year mortgage rate was 6.18% in September and 6.43% in October. With the exception of September, rates haven’t been that low since May of 2023. The pent-up activity is on the supply side, too. Most sellers are also buyers, and those who chose to delay their move are getting restless. While they’ll be met with more inventory, they may not see the most ideal interest rate. Still, new listings were up 9.1% statewide and 8.7% in the metro compared to last October.

Despite recent gains, supply levels remain low due to a lack of new home construction. Existing sellers who would ordinarily move up the housing ladder and free up their first-time home feel “locked in” to their favorable mortgage rates. Those rates are often between 3.0–4.0% or lower compared to nearly 7.0% today. The Federal Housing Finance Agency (FHFA) has found that about 70% of all outstanding mortgages are financed below 4.0%. There are signs of change, but housing demand has fallen due to the affordability crisis. The persistent housing shortage kept home prices rising, just as the Federal Reserve hiked interest rates to combat inflation. Prospective home buyers are still feeling the triple punch of higher prices, higher mortgage rates, and limited inventory. While home prices are still rising, wage growth has been exceeding the rate of inflation. In fact, the U.S. Bureau of Labor Statistics reports that wages are rising at 4.6% while inflation is rising at 2.4%.

“We see buyers adjusting to today’s mortgage rates, but experienced Realtors know there are many ways to get deals done,” said Geri Theis, President of Minnesota Realtors®. “Having a strong Realtor negotiating on your behalf, directing you to down payment resources and offering suggestions on timelines and contingencies will help you stand out against your competition and ultimately help you close the deal.”

Prices, Market Times and Negotiations

Every area and market segment is unique. Some listings are getting multiple offers and closing for over list price. But overall, sellers accepted offers at 97.1% of list price statewide and 97.8% in the metro—both down from last year. And those offers were accepted after an average of 42 days on market statewide and 45 days in the metro—both figures up from a year ago. “We’re seeing different activity in different price points, areas and segments such as condos or new construction,” said Jamar Hardy, President of Minneapolis Area REALTORS®. “What’s impacting $1M+ buyers isn’t necessarily on the mind of a $300,000 buyer, and condos and new construction are better supplied and more accessible than the existing single-family market, for example.”

The state median home price was up 5.3% to $347,500, and the metro median price was up 4.1% to $380,000. A slowdown in price growth would give incomes a chance to catch up, helping address affordability concerns. And additional inventory will mean less upward price pressure from a persistent supply shortage. It would also allow buyers to have more options from which to choose. “Sales numbers confirm some of the renewed optimism I’m seeing in today’s housing market given better rates and more inventory,” said Amy Peterson, President of the Saint Paul Area Association of REALTORS®. “While many sellers and buyers feel now is the right time to make a move, it’s still important to consider their goals in taking that next step and negotiating offers.”

Locational Differences | Minnesota statewide

Market activity always varies by area, price point and property type. Regions such as Duluth and the North Shore and Hibbing/Virginia saw the largest gains in seller activity. Alexandria, St. Cloud and the Twin Cities had the largest gains in pending sales. Homes sold the fastest in the Duluth/North Shore region along with St. Cloud. Prices were highest in the metro followed by Detroit Lakes and Rochester. The most affordable regions of the state were Hibbing/Virginia and Willmar. Every region is undersupplied except Hibbing/Virginia, Detroit Lakes and Bemidji, which are relatively well balanced.

Locational Differences | Twin Cities Metro

For cities with at least five sales, Afton, Columbus and Arden Hills had the largest sales gains. The highest priced areas were Orono, Afton and North Oaks while the most affordable areas were South St. Paul, Brooklyn Center and Isanti. But the largest increases in sales price were in Afton, Orono and Hopkins. The most oversupplied markets were Clear Lake, Centerville and Cokato while the most undersupplied markets were Oak Park Heights, North St. Paul and Mound. Homes took the longest to sell in Mayer, Columbus and Centerville and sold the fastest in Norwood, Greenfield and New Brighton.

From The Skinny Blog.

• Statewide, signed purchase agreements were down 0.5% and new listings were up 4.4%
• The median sales price increased 6.1% to $350,000
• Market times rose 18.2% to 39 days and inventory was up 10.0% to 16,736

(Oct. 15, 2024) – According to new data from the Minnesota state and Twin Cities metro REALTOR® Associations, listings rose compared to last year while sales were flat. Inventory and prices are both up.

Sellers, Buyers and Housing Supply
It’s no secret that buyers have been facing a triple punch lately: higher prices, higher mortgage rates and tight inventory. That’s shown up in slower sales activity, lower affordability and slim pickings when it comes to the number of homes for sale on the market. In fact, statewide, sales hit their lowest level since 2011, but now signed purchase agreements are rising. Sellers are caught in between—either they stay put in a home they might have outgrown or trade up to a higher price, higher mortgage rate and higher monthly payment. But there’s evidence that’s changing.
For example, the state and metro saw 4.4% and 4.2% more new listings, respectively, when compared to September 2023. For sales, statewide activity was relatively flat (down 0.5%) while metro-area activity rose a modest 1.5%. The fact that listing activity has been stronger than sales means inventory levels are up—most recently rising an even 10%. But we’re still in a sellers’ market. Lower inflation, stronger-than-expected hiring and the Federal Reserve’s mid-September rate cut are all reassuring signs for home buyers. That’s not to say there are no concerns about housing or the economy. For now, however, this marginally better confidence is helping to stabilize home sales and slightly improve affordability.
When it comes to mortgage rates, be careful what you wish for. Rates back below 5% could mean recession. The fact that so many homeowners enjoy rates below 4% creates the “lock-in effect” where would-be sellers choose to stay put instead of trading up to a higher price and higher rate. “There is still plenty of pent-up activity both buyers and sellers—who are being patient,” according to Geri Theis, President of Minnesota Realtors®. “That sounds like a good idea until you realize everyone else is waiting for the same thing. And as rates come down, some may find themselves in another competitive environment where listings are selling for over asking price,” she added.

Prices, Market Times and Negotiations
All situations and transactions are unique. First-time buyers without equity have an uphill battle while move-up buyers with equity from their first home are able to roll that into the next property. The more affordable price points have seen the largest declines in demand as those buyers are more rate sensitive. Luxury market activity continues to outperform as those buyers are less rate sensitive. Sales at or above $1M have risen 16.8% over the last 12 months, more than any other price point. Those relocating here with equity from higher-priced coastal markets should face fewer headwinds. And each market segment is unique as well. Some listings are still getting multiple offers and selling for over list price. Overall, however, sellers accepted offers at 97.7% of list price statewide and 98.5% in the metro. Both figures were down from last year. And those offers came in after an average of 39 days on market both statewide and in the metro—both figures up from a year ago. “There are significant differences from price point to price point and area to area,” said Jamar Hardy, President of Minneapolis Area REALTORS®. “Buyers were excited as rates hit the low sixes even though they’ve trickled higher since, and I believe we’ll see a real boost if and when we go below 6%.”
The state’s median home price was up 6.1% to $350,000; the metro median price was up 2.4% to $380,000. Since 2021, the typical mortgage payment on the median-priced Twin Cities home has risen from around $1,750 to $2,750 per month. Most economists agree that the path for rates should be lower, but it will be bumpy on the way down. What’s also true is that incomes are and have been rising faster than home prices. That should give households a chance for earnings to catch up to home prices. In the meantime, more supply will mean less competition and more choices, which should translate into better affordability and more manageable price growth. “I have buyers who are pleased to see more options to choose from,” said Amy Peterson, President of the Saint Paul Area Association of REALTORS®. “But for the most part sellers still hold the reigns even with the extra inventory we’ve seen.”

Location Differences | Minnesota Statewide
Market activity always varies by area, price point and property type. Regions such as Hibbing/Virginia and Bemidji saw the largest gains in new listings. Bemidji also saw the largest gain in pending sales and now has 6.2 months of supply—the most of any region. St. Cloud and Grand Rapids also had notable increases in sales. Homes sold the fastest in the Duluth/North Shore region along with St. Cloud and the core Twin Cities. Prices were highest in the metro followed by Detroit Lakes, Alexandria and Brainerd. The most affordable regions of the state are Hibbing/Virginia, Bemidji and Willmar.

Location Differences | Twin Cities Metro
For cities with at least five sales, Deephaven, Maple Plain and Mayer had the largest sales gains. The highest priced areas were Deephaven, Wayzata, Orono and Medina while the most affordable areas were Hutchinson, Norwood Young America and Robbinsdale. But the areas with the largest increases in sales price were Deephaven, Orono and Little Canada. The most oversupplied markets were Centerville, Hanover and Wayzata while the most undersupplied markets were Circle Pines, Crystal and New Hope. Homes took the longest to sell in Bayport, Annandale and Orono and sold the fastest in Corcoran, Arden Hills and Circle Pines.

From The Skinny Blog.

Buyer and seller activity down from last August, but lower rates on the way

• Pending sales fell 10.2%; new listings down 3.3%
• The median sales price increased 2.6% to $389,700
• Market times rose 21.2% to 40 days; inventory up 11.7% to 9,712

(Sep. 17, 2024) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, seller activity softened along with buyer activity. Inventory and prices were higher.

Sellers, Buyers and Housing Supply
$2,820. That’s what a homeowner would save per year if they purchased or refinanced the median-priced home in August compared to if they purchased it when rates were at their peak in late 2023. Assuming 20.0% down, the monthly payment on a $389,700 home decreased from $2,790 to $2,555 per month when comparing August interest rates to when they were at their peak. At today’s mid-September rate of 6.1%, that payment drops even further to $2,474. That includes principal, interest, taxes and insurance. It’s a good representation of real monthly costs outside of maintenance and repairs. And that $2,820 in annual savings amounts to about 2.3% of the median family income in the metro.
Those lower rates need some time to course through the system before impacting demand. For August, pending sales were down 10.2% but are only down 0.7% for the year. Seller activity was also lower; new listings fell 3.3% but are actually up 8.5% for the year. Homes took more time to sell. At an average of 40 days, market times were up 21.2% for the month but are only 7.3% higher compared to 2023 year-to-date. Buyers thirsty for more inventory will benefit from an 11.7% increase in the number of homes for sale. That figure has now risen for ten straight months. Unfortunately, that inventory isn’t necessarily at the price points or in the locations today’s home buyers want or need.
Prognosticators are already discussing Spring market 2025. The rate environment should continue to improve, but a significant backlog of pent-up demand could overwhelm even the inventory growth we’ve seen. Unleashing that demand could also mean buyers once again find themselves in multiple-offer situations writing contracts for over list price. “The biggest hurdle is affordability; the other big hurdle has been supply,” said Jamar Hardy, President of Minneapolis Area REALTORS®. “The trend in mortgage rates is promising, but it will take time to fix our long-term housing shortage.”

Prices, Market Times and Negotiations
Prices are still rising but at a more subdued pace. The market-wide median sales price rose to $389,700, but the existing single-family median price is $410,000 and new single-family homes fetched $535,000. Overall, sellers accepted offers at 98.7% of their list price on average. Single-family sellers got 99.0% while condos were closer to 96.0%. Despite a metro-wide average of 40 days, single-family homes spent 37 days on market while condos spent 74. ““There’s more variation across different areas and price points than most would expect,” said Amy Peterson, President of the Saint Paul Area Association of REALTORS®. “Lower interest rates could result in quicker market times and stronger offers, so a drop in rates could cancel out any inventory gains.”

Location & Property Type
Market activity always varies by location and segment. Despite the new home market being better supplied, new home sales underperformed existing home sales. And despite better affordability, condo sales fell nearly twice as much as single family. Sales over $500,000 performed better than sales under $500,000 as higher-end buyers are less rate-sensitive. Cities such as Centerville, Dellwood, St. Bonifacius and Minnetrista had among the largest sales gains while Stacy, Ham Lake and Elko New Market all had notably weaker demand. For cities with at least three sales, the highest priced areas were Afton, Woodland, Excelsior, Wayzata and Orono while the most affordable areas were Rush City, Elko New Market, Osseo and Oakdale.

August 2024 Housing Takeaways (compared to a year ago)

• Sellers listed 5,940 properties on the market, a 3.3% decrease from last August
• Buyers signed 4,017 purchase agreements, down 10.2% (4,498 closed sales, up 13.8%)
• Inventory levels increased 11.7% to 9,712 units
• Month’s Supply of Inventory rose 13.0% to 2.6 months (4-6 months is balanced)
• The Median Sales Price was up 2.6% to $389,700
• Days on Market rose 21.2% to 40 days, on average (median of 20 days, up 33.3%)
• Changes in Pending Sales activity varied by market segment and price point
  • Single family sales fell 7.9%; condo sales were down 14.0%; townhouse sales decreased 16.3%
  • Traditional sales were down 9.7%; foreclosure sales declined 23.4% to 36; short sales rose 28.6% to 9
  • Previously owned sales decreased 8.8%; new construction sales were down 16.6%
  • Sales under $500,000 declined 11.4%; sales over $500,000 fell 4.0%

  
  From The Skinny Blog.

• Signed purchase agreements fell 4.2%; new listings up 7.2%
• The median sales price increased 2.7% to $385,000
• Market times rose 24.1% to 36 days; inventory up 11.4% to 9,398

(August 15, 2024) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, seller activity rose in July compared to last year while buyers pulled back. Inventory and prices were higher.

Sellers, Buyers and Housing Supply
While the first quarter of 2024 was off to a good start, the second quarter was weaker. Homes were selling faster in January, February and March than last year. But homes were selling slower than a year ago in May, June and July. Sellers got stronger offers in January, February and March compared to last year. But then sellers accepted a smaller share of their list price in April, May, June and July. So, it’s important to put the current month’s activity for July in context. January and February of this year, for example, were abnormally warm, which allowed for more showings and sales. April, May and June all had higher than expected mortgage rates, which held back sales activity. Because of those variable factors and how they cloud apples-to-apples comparisons, it’s useful to assess market health based on a variety of time frames. To demonstrate, pending sales were down 4.2% for July but are up about 1.0% for the year. Market times were up 24.1% in July but are only up 4.8% so far this year.

Overall, seller activity has been rising modestly while buyer activity is relatively flat to up slightly for the year so far. That has also meant more inventory—also known as active listings or the number of homes for sale. But the inventory isn’t necessarily in the price buckets today’s home buyers want and need, and they may not be in the preferred market segment or location. Plus, it’s still squarely a seller’s market although not for all areas, segments or price points. Higher interest rates have stuck around, though there’s good evidence that will change. Most buyers (especially first-time) would agree that change can’t come soon enough as they’re still feeling the triple punch of rising prices, low inventory and higher mortgage rates. Plus, they lack the equity to use as a downpayment on the next home. There is a good amount of pent-up demand waiting for the affordability picture to improve. One concern is that as rates ease, demand will be unleashed, and buyers could find themselves in multiple-offer situations writing contracts for well over list price. That higher principle can negate any savings on monthly payments from lower mortgage rates. “It may very well be worth it to stomach a temporarily higher rate for a less competitive environment,” said Jamar Hardy, President of Minneapolis Area REALTORS®. “Buyers are eager for more supply, but we’re still finding consumers to be cautious and selective.”

Prices, Market Times and Negotiations
Each area and market segment are unique. The market-wide median sales price rose to $385,000, but new single-family homes tended to fetch $540,000 while existing condos were nearer to $215,000. Overall, sellers accepted offers at 99.5% of their list price on average. That said, listings priced between $300,000-$500,000 got offers at 100.1% of list price while homes over $1M were 97.9%. Once again, all listings tended to sell in about 36 days, but new homes took closer to 76 days to sell while existing homes got offers within 31 days. Single family homes are selling after 32 days, but condos are taking 63 days. “A slight slowdown in the second quarter activity is likely to change for the better as interest rates continue to ease,” said Amy Peterson, President of the Saint Paul Area Association of REALTORS®. “But those lower rates will mean more buyers in the pipeline who’ve felt priced out of the market previously will be home shopping again. Lots of people have that same idea so offer strategies could change with a more competitive market.”

Location & Property Type
As noted, housing markets are not homogeneous. New home sales outperformed existing home sales while condo sales fell much more than single family. Sales over $500,000 performed better than sales under $500,000, as higher-end buyers are less rate-sensitive. Cities such as Columbus, Hudson, Corcoran and Hanover saw among the largest sales gains while Mounds View, Orono, Medina and Victoria all had notably weaker demand. For cities with at least five sales, the highest priced areas were Wayzata, Independence, Orono and North Oaks while the most affordable areas were Lauderdale, North St. Paul, St. Paul Park and Oakdale.

From The Skinny Blog.

Metro home prices hit record high despite higher rates and more inventory

• Signed purchase agreements fell 10.8%; new listings down 5.8%
• The median sales price increased 1.8% to $390,000
• Market times rose 9.7% to 34 days; inventory up 10.6% to 8,905

(Jul. 16, 2024) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, listings rose slightly compared to last year while sales softened. Inventory levels and prices were up.

Sellers, Buyers and Housing Supply
It’s official. Half of 2024 is in the books. That makes it a good time to zoom out and check on some year-to-date figures. So far this year, there have been 10.6% more new listings and 1.8% more pending sales metro-wide compared to the same period last year. That means seller activity has risen more than five times the pace of buyer activity on a year-to-date basis. Put another way, there was more supply coming online relative to demand—a trend confirmed by eight consecutive months of inventory growth. For June, the number of homes for sale was up 10.6% to 8,905 active listings. That’s the number of listings on which buyers can write offers. While buyers may be feeling less pressure with 850 additional homes to choose from, there are still only 2.4 months of supply, indicating a seller’s market; a balanced market is 4-6 months of inventory.

While this year has seen growth in both listings and sales compared to 2023, there seems to have been a cool-down in activity in May and June as signed purchase agreements dipped. At around 7.0%, mortgage rates in May and June of this year hovered higher than last year. And buyers are still feeling the triple punch of rising prices, low inventory and higher interest rates. There is a good amount of pent-up buyer and seller activity waiting in the wings for an improved affordability picture.

But all situations are unique. For example, move-up buyers with built up equity from their first home can roll that equity into their next property, while most first-time buyers don’t have that luxury. Additionally, market inventory and high interest rates lead to a decrease in overall activity, especially when it comes to more affordable homes as those buyers are the most rate sensitive.

Prices, Market Times and Negotiations
Listings in some areas are still getting multiple offers and selling for over list price. In fact, overall, sellers accepted offers at 100.1% of their list price on average. While perhaps surprisingly strong, that was down from last year. And those offers came in after an average of 34 days on market, which was up from last year. Single family homes specifically are selling after 31 days but condos are taking 56 days. “This is still a somewhat fragmented market where activity truly varies from price point to price point and area to area,” said Jamar Hardy, President of Minneapolis Area REALTORS®. “While we’re encouraged by more supply, the lack of affordability caused by higher mortgage rates and rising prices are still significant hurdles.”

The median home price was up 1.8% to $390,000. That was the smallest gain since December. The single-family median price rose to $425,000, while condos fell to just under $200,000 and townhomes dipped to $310,000. New home prices are just over $500,000 while existing home prices are $380,000. Low inventory and the mix of product selling—i.e. more luxury and new construction—are partly what’s keeping prices so firm. “We are observing that the limited inventory is still affecting prices and activity for more affordable properties,” said Amy Peterson, President of the Saint Paul Area Association of REALTORS®. “Partnering with a qualified and experienced professional will help consumers navigate the intricacies of this market.”

Location & Property Type
Market activity always varies by area, price point and property type. New home sales outperformed existing home sales while condo sales fell by over twice as much as single family. Sales over $500,000 performed better than sales under $500,000. Cities such as Mahtomedi, Hudson and North Oaks saw among the largest sales gains while Delano, Annandale and Elko New Market all had notably weaker demand. For cities with at least five sales, the highest priced areas were Deephaven, Shorewood, Tonka Bay and North Oaks while the most affordable areas were Hopkins, St. Paul Park and Spring Lake Park.

May 2024 Housing Takeaways (compared to a year ago)

• Sellers listed 6,358 properties on the market, a 5.8% decrease from last June
• Buyers signed 4,469 purchase agreements, down 10.8% (4,540 closed sales, down 16.3%)
• Inventory levels increased 10.6% to 8,905 units
• Month’s Supply of Inventory rose 14.3% to 2.4 months (4-6 months is balanced)
• The Median Sales Price was up 1.8% to $390,000
• Days on Market rose 9.7% to 34 days, on average (median of 15 days, up 25.0%)
• Changes in Pending Sales activity varied by market segment and price point
  • Single family sales fell 8.5%; condo sales were down 21.1%; townhouse sales decreased 17.2%
  • Traditional sales were down 10.5%; foreclosure sales declined 34.2% to 25; short sales rose 25.0% to 5
  • Previously owned sales decreased 11.6%; new construction sales were up 0.2%
  • Sales under $500,000 declined 13.2%; sales over $500,000 decreased 2.5%

s
From The Skinny Blog.

Growth in listings met by cooler demand leads to an increase in supply

• Signed purchase agreements fell 5.0%; new listings up 3.4%
• The median sales price increased 4.1% to $385,000
• Market times rose 7.2% to 40 days; inventory up 16.3% to 8,653

(Jun. 18, 2024) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, listings rose slightly compared to last year while sales softened. Inventory levels and prices were up.

Sellers, Buyers and Housing Supply
Buyers are starting to notice more inventory across the price spectrum. From under $200,00 to over $1,000,000, there are more homes for sale than there were a year ago. In fact, the number of homes for sale rose 15.7% from last year. That’s the highest number of active listings for May since 2020. And yet every price range—apart from $1,000,000 and above—remains a seller’s market where sellers are still getting strong offers relatively quickly. This year has seen growth in both listings and sales compared to 2023. For May, new listings are up 3.1% while sales fell 5.0%. One factor impacting May sales was higher than expected interest rates. Last May, rates were around 6.4% compared to 7.1% this year. Midyear is a good time to zoom out and look at some year-to-date figures. So far this year, seller activity is up 14.9% while buyer activity is up 5.3%.

A mix of stronger than expected economic data and continued inflation kept mortgage rates higher for longer and led financial markets to price in fewer rate cuts this year. But not everyone is feeling the benefits of the surprisingly resilient economy. Affordability remains a sticking point for would-be buyers—particularly first-time buyers without the equity from the last home to roll into the next. The typical monthly payment on the median-priced home is up over $1,000 since 2020.

There remains plenty of pent-up activity for both buyers and sellers. Even with the recent inventory gains, the market needs about 20,000 active listings to have a balanced market; currently there are fewer than 8,000. Buyers shopping the most affordable price points tend to be more rate-sensitive than luxury buyers who often use cash or have the financial wherewithal to simply absorb the higher payments. Some are able to skip the mortgage entirely by deploying cash. About 17.5% of Twin Cities homes are purchased in cash; it’s nearly double that for properties over $1 million.

Prices, Market Times and Negotiations
The median home price was up 4.1% to $385,000. Single family prices stood at $420,000, condo prices came in at $220,000 and townhomes checked in at $320,000. New home prices are just over $500,000 while existing home prices are $371,000. Even while they’re still in a relatively strong position, some sellers are finding themselves paying closing costs or incorporating other buyer incentives. “While the market is undergoing corrections, it is not a balanced market yet,” said Amy Peterson, President of the Saint Paul Area Association of REALTORS®. “Buyers need to remain both persistent and strategic ensuring their monthly payments align with their financial plans.”

Quality homes that show well in desirable areas are still getting multiple offers. Market-wide, sellers accepted offers at 100.1% of their list price, which was down from last year. Those purchase agreements were accepted after an average of 40 days on market, which was longer (slower) than last year. Every price point and area are unique. For example, single family homes are selling after 37 days but condos are taking 66 days. “While it’s true that each area and even market segment is unique, there are still some common threads,” said Jamar Hardy, President of Minneapolis Area REALTORS®. “Rising inventory is one of those themes, yet those shopping for homes shouldn’t assume we’re suddenly in a buyer’s market because we’re not.”

Location & Property Type
Since market activity always varies by area, price point and property type, housing markets shouldn’t be considered monolithic. Existing home sales performed better than new home sales. Single family sales fared better than condos or townhomes. Sales over $500,000 rose while sales under $500,000 softened. Cities such as Cambridge, New Richmond, Hugo and Buffalo saw among the largest sales gains while Arden Hills, Princeton, Medina and North Branch all had weaker demand. For cities with at least five sales, the highest priced areas were Wayzata, North Oaks, Excelsior and Mendota Heights. The most affordable areas were Norwood Young America, Albertville, Vadnais Heights and South St. Paul.

May 2024 Housing Takeaways (compared to a year ago)

• Sellers listed 6,979 properties on the market, a 3.1% increase from last May
• Buyers signed 4,675 purchase agreements, up 5.0% (4,514 closed sales, up 10.5%)
• Inventory levels increased 15.7% to 8,614 units
• Month’s Supply of Inventory rose 21.1% to 2.3 months (4-6 months is balanced)
• The Median Sales Price was up 4.1% to $385,000
• Days on Market was down 5.3% to 40 days, on average (median of 15 days, up 15.4%)
• Changes in Pending Sales activity varied by market segment and price point
  • Single family sales fell 2.3%; condo sales were down 15.4%; townhouse sales decreased 10.2%
  • Traditional sales were down 4.6%; foreclosure sales declined 12.5% to 42; short sales rose 25.0% to 10
  • Previously owned sales decreased 3.8%; new construction sales were down 9.5%
  • Sales under $500,000 declined 8.6%; sales over $500,000 increased 8.7%

From The Skinny Blog.

Listings are up more than sales meaning buyers are seeing more options

• Signed purchase agreements rose 8.5%; new listings up 20.9%
• The median sales price increased 4.1% to $385,250
• Market times fell 2.2% to 45 days; inventory up 14.1% to 7,705

(May 15, 2024) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, both listings and sales rose compared to last year at this time. Prices and inventory levels were also higher.

Sellers, Buyers and Housing Supply
(May 15, 2024) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, both listings and sales rose compared to last year at this time. Prices and inventory levels were also higher. Sellers, Buyers and Housing Supply May and June tend to be the busiest times of year for buying and selling homes. This year has seen growth in both listings and sales compared to 2023. Through April, seller activity is up 19.3% while buyer activity is up 9.1%. For April alone, those figures are 20.9% and 8.5% respectively. Since listings are rising faster than sales, inventory levels are on the rise, recently up 14.1% to 7,705 active listings. That’s the highest number of actively marketed listings since November. While buyers are still feeling squeezed by rates just over 7.0%, pent-up activity for both buyers and sellers is being released as we’re comparing to an already low baseline.

Even with that increase in inventory, we’d need about 20,000 active listings to have a balanced market and we have under 8,000. But not all price points behave the same. There are 1.6 months of supply of homes under $250,000 but 6.2 months of supply of homes over $1 million (4-6 months is balanced). Move-up buyers with built-up equity from their first home are able to roll that into the next property, while first-time buyers don’t have that luxury. So, the most affordable price points have seen the largest declines in demand—but that’s also a result of having the tightest supply levels. Luxury buyers are less impacted by rates and therefore the upper price ranges are seeing the largest gains in demand. Some well-capitalized buyers are combating higher rates by skipping the mortgage entirely and using cash. About 17.5% of Twin Cities homes are purchased in cash but it’s nearly double that for properties over $1 million.

Prices, Market Times and Negotiations
Again, depending on price point, well-presented listings in many areas are getting multiple offers. Overall, sellers accepted offers just shy of full list price (99.9%), which was actually down a hair from last year. Moreover, they got those offers after an average of 45 days on market, which was faster than last year. That also varied by price point and area. Single family homes are selling after 43 days but condos are taking 74 days. “This is a market where both sides really can be successful with their needs but may not get all of their wants,” said Jamar Hardy, President of Minneapolis Area REALTORS®. “It’s okay to be excited about more inventory, but people should know that we still have an undersupplied market which means sellers have the advantage overall.”

The median home price was up 4.1% to $385,250. Single family prices stood at $425,000, condo prices hovered around $217,000 and townhomes checked in at $312,000. New home prices are just shy of $500,000 while existing home prices are $370,000. Even as prices remain firm, some sellers are finding themselves paying closing costs or doing other buyer incentives to get transactions across the closing table. “While we don’t have enough homes for everyone who wants one, I am seeing more traffic at open houses and additional buyers are coming into (or returning to) the market,” said Amy Peterson, President of the Saint Paul Area Association of REALTORS®. “Many buyers are more cautious and realistic today, yet they are still excited to become homeowners.”

Location & Property Type
Market activity always varies by area, price point and property type. Existing home sales rose faster than new home sales. Condo sales rose nearly three times as much as single family. Sales over $500,000 rose at six times the rate of sales under $500,000. Cities such as Robbinsdale, Columbia Heights and Corcoran saw among the largest sales gains while Forest Lake, Victoria and Delano all had notably weaker demand. For cities with at least five sales, the highest priced areas were Medina, Lake Elmo and Orono while the most affordable areas were Red Wing, Mora, Columbia Heights and Faribault.

March 2024 Housing Takeaways (compared to a year ago)

• • Sellers listed 6,347 properties on the market, a 20.9% increase from last April
  • Buyers signed 4,334 purchase agreements, up 8.5% (3,806 closed sales, up 13.8%)
  • Inventory levels increased 14.1% to 7,705 units
  • Month’s Supply of Inventory rose 17.6% to 2.0 months (4-6 months is balanced)
  • The Median Sales Price was up 4.1% to $385,250
  • Days on Market was down 2.2% to 45 days, on average (median of 18 days, up 5.9%)
  • Changes in Pending Sales activity varied by market segment and price point
    • Single family sales rose 9.3%; condo sales were up 25.5%; townhouse sales increased 1.2%
    • Traditional sales were up 8.5%; foreclosure sales rose 39.4% to 46; short sales were flat at 6
    • Previously owned sales increased 9.8%; new construction sales were up 2.5%
    • Sales under $500,000 rose 3.6%; sales over $500,000 increased 24.2%

From The Skinny Blog.

• Signed purchase agreements rose 7.8%; new listings up 4.0%
• The median sales price increased 2.8% to $366,000
• Market times fell 6.9% to 54 days; inventory up 8.4% to 6,879

(Apr. 15, 2024) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, both buyer and seller activity rose in March. Inventory levels and prices were also higher.

Sellers, Buyers and Housing Supply
With warmer temperatures comes heightened home buyer and seller activity. Metro-wide, we’ve now seen five consecutive year-over-year increases in new listings and four consecutive increases in pending sales. During the first quarter (YTD), seller activity rose 17.9% while pending sales were up 9.4%. That’s allowed inventory levels to also rise—most recently up 8.4% to 6,879 active listings. While buyers can expect to see more listings in their searches, most areas and sub-markets still favor sellers. There is a good amount of pent-up activity from buyers and sellers that’s been accumulating from when rates jumped. The backlog is starting to be released as more consider making a move. In some ways, residents of the Twin Cities are adjusting to the higher rate environment, but low supply and rising prices combined with higher rates have held back too many from homeownership—particularly first-time buyers without the equity from their first home. Move-up buyers and those looking at pricier segments are less rate-sensitive and so activity is rising more quickly higher up on the price spectrum.

Prices, Market Times and Negotiations
Perhaps surprisingly, REALTORS® still report multiple offer situations in some markets and price points. If rates were to ease further toward 6.0%, that will continue. Listings spent 6.9% fewer days on market compared to last March. And sellers accepted offers at 98.8% of their asking price, up 0.2% from last year. “It’s clear that people are ready and eager to get deals done,” said Jamar Hardy, President of Minneapolis Area REALTORS®. “But even a few months of increases in available listings doesn’t mean the housing shortage is behind us. We’re still having to be persistent, strategic and creative when it comes to getting people into homes.”

Supply levels are too low for prices to fall but rates are too high for prices to rise much. The median home price in March was up 2.8% to $366,000 which amounts to $208 per finished square foot. During the month, sellers accepted offers on their listings after an average of 54 days (median of 24) compared to 58 days last March. Sellers are still in a relatively strong position, but some are having to make concessions by way of a price reduction, seller paid closing costs and other incentives.

“We’re in a unique place. The market remains tight even as we see it loosening a bit with more inventory and more buyers coming out to shop,” said Amy Peterson, President of the Saint Paul Area Association of REALTORS®. “A market like this is never monolithic. Every price point, segment and area are different—sometimes very different. That’s why it’s important to partner with an experienced real estate professional.”

Location & Property Type
Market activity always varies by area, price point and property type. Existing home sales rose faster than new home sales. Single family sales rose while condo and townhome sales declined. Sales over $500,000 rose at over five times the rate of sales under $500,000. Cities such as Robbinsdale, Columbia Heights and Corcoran saw among the largest sales gains while Forest Lake, Victoria and Delano all had notably weaker demand. For cities with at least five sales, the highest priced areas were Medina, Lake Elmo and Orono while the most affordable areas were Red Wing, Mora, Columbia Heights and Faribault.

March 2024 Housing Takeaways (compared to a year ago)

• Sellers listed 5,261 properties on the market, a 4.0% increase from last March
• Buyers signed 4,028 purchase agreements, up 7.8% (3,238 closed sales, down 0.9%)
• Inventory levels rose 8.4% to 6,879 units
• Month’s Supply of Inventory rose 20.0% to 1.8 months (4-6 months is balanced)
• The Median Sales Price was up 2.8% to $366,000
• Days on Market was down 6.9% to 54 days, on average (median of 24 days, down 11.1%)
• Changes in Pending Sales activity varied by market segment and price point
  • Single family sales rose 12.8%; condo sales were down 15.6%; townhouse sales decreased 1.2%
  • Traditional sales were up 8.0%; foreclosure sales fell 11.9% to 37; short sales rose 11.1% to 10
  • Previously owned sales increased 8.9%; new construction sales were up 2.3%
  • Sales under $500,000 rose 3.9%; sales over $500,000 increased 20.3%

  
  From The Skinny Blog.

• The median sales price increased 4.5% to $357,700
• Signed purchase agreements rose 13.1%; new listings up 34.5%
• Market times fell 3.3% to 59 days; inventory up 13.3% to 6,665

(Mar. 18, 2024) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, both buyer and seller activity rose in February. Homes also sold in less time and at higher prices.

Sellers, Buyers and Housing Supply
With four consecutive year-over-year increases in new listings and three consecutive year-over-year increases in pending sales, the market turnaround narrative is gaining traction. While inventory levels were up, potential buyers should understand that the market remains significantly undersupplied. In February, sellers listed 34.5% more homes on the market and buyers signed 13.1% more purchase agreements. Sellers unwilling to give up their favorable mortgage rate have withheld listings due to the “rate lock-in effect” but now there is a backlog and we’re seeing some of that activity being released. Buyers had also delayed their purchases until rates came down or until they had some earnings growth, were more able to save for a downpayment and saw more inventory that met their needs. While supply and demand normalize, buyer and seller activity won’t immediately return to previous highs. That will take time—but just how much depends on both market and economic factors. Since these seemingly strong gains are skewed by a low baseline period, it’s not that activity has surged recently as much as activity declined last year at this time due to the Federal Reserve’s inflation fight and rate hikes.

Inventory levels are on the rise in the metro, up 13.3% compared to last February. Those out shopping for homes during this spring market should expect both more listings from pent-up sellers but also more competition from pent-up buyers. In that sense, activity levels will be higher but the balance between supply and demand will remain tight. But if rates do fall further, that could induce even more demand which would cause a resurgence in multiple offer situations and homes selling for over list price. “Perhaps it’s still early to make the call, but it sure feels like we’ve reached a turning point,” said Jamar Hardy, President of Minneapolis Area REALTORS®. “Despite the market ramping up, buyers are still cautious and deliberate but also more optimistic.”

Prices, Market Times and Negotiations
Supply levels are too low for prices to fall but rates are too high for prices to rise much. The median sales price rose 4.5% to $357,700, which amounted to $203 per square foot. During the month, sellers accepted offers at 97.5% of list price after 59 days compared to 97.2% in 61 days last February. Sellers still enjoy pricing power and the upper hand in general but some are having to make concessions by way of price reductions, some seller paid closing costs and other tactics. “There is definitely some momentum heading into spring market,” said Amy Peterson, President of the Saint Paul Area Association of REALTORS®. “But turnarounds rarely happen overnight. Builders play a key role, lenders are being more innovative and consumers are persistent and more realistic.”

Location & Property Type
Market activity always varies by area, price point and property type. New home sales rose at over twice the rate of existing home sales. Single family sales rose at over twice the rate as townhomes. Sales over $500,000 rose at over three times the rate of sales under $500,000. Cities such as Shorewood, Forest Lake, Minnetrista and New Richmond saw among the largest sales gains while Crystal, Andover, Buffalo and Inver Grove Heights all had notably weaker demand. For cities with at least five sales, the highest priced areas were Medina, Orono, North Oaks and Lake Elmo while the most affordable areas were Red Wing, Zumbrota and Vadnais Heights.

February 2024 Housing Takeaways (compared to a year ago)

• Sellers listed 4,667 properties on the market, a 34.5% increase from last February
• Buyers signed 3,308 purchase agreements, up 13.1% (2,614 closed sales, up 11.2%)
• Inventory levels rose 13.3% to 6,665 units
• Month’s Supply of Inventory rose 28.6% to 1.8 months (4-6 months is balanced)
• The Median Sales Price was up 4.5% to $357,700
• Days on Market was down 3.3% to 59 days, on average (median of 38 days, down 13.6%)
• Changes in Pending Sales activity varied by market segment
  • Single family sales rose 16.8%; condo sales were up 5.4%; townhouse sales increased 7.0%
  • Traditional sales were up 12.8%; foreclosure sales rose 45.5% to 48; short sales were up 37.5% to 11
  • Previously owned sales increased 11.0%; new construction sales rose 26.6%
  • Sales under $500,000 were up 8.9%; sales over $500,000 increased 30.3%

  From The Skinny Blog.