Minnesota’s housing market continues to hit new lows in the number of homes for sale, all while homebuyer demand remains strong. This has led to an even more intense home seller’s market where prices are hitting new highs with multiple offers on the table.
According to the Minneapolis Area REALTORS®, the Twin Cities has just 4,361 homes for sale presently, about three weeks’ supply of inventory (0.8 months), where a balanced market would supply four to six months’ worth of homes given recent demand. Statewide inventory is sitting at just 5,801 homes with 0.9 months of supply.
The REALTORS state that inventory levels dipped 19.0% from this time last year. Compounded with a 38.2% fall from 2020 to 2021, the metro is facing a new level of inventory shortage. “Homes sold more quickly last month than they did last February, and prices rose over 8.0%,” said Denise Mazone, president of the Minneapolis Area REALTORS. “While we may not reach the heights of 2020 and 2021, the market remains competitive, homes are still selling rapidly often with multiple bids, and buyers and sellers need to be prepared to move quickly.”
Market times have been falling for years, but today’s listings spend even less time on the market. Two years ago, half of the listings went under contract in under 40 days, but last month, half of the listings spent fewer than 19 days on the market. That’s more than a 52.0% drop.
The median sales price for the state hit $304,500 in February. In the Twin Cities, it rose 8.3% from last February to $340,000. “Homeowners have gained significant equity, particularly over the last few years,” according to Mark Mason, president of the Saint Paul Area Association of REALTORS®.
The median sales price pre-pandemic in February 2020 was $282,000 for the Twin Cities and $255,000 for the state. At that time, the month’s supply of inventory for the state was two months of supply and for the Twin Cities was 1.6 months of supply. Many thought those numbers were startling, but two years later, the supply of homes in our state and the demand for them has become alarmingly more unbalanced.