March was a very good month for sales and closings in most parts of the state. Even with the emergence of the COVID-19 pandemic and a month capped by Governor Walz’s Stay at Home Order, residential real estate roared to new heights as the strong economy and low interest rates spurred consumer activity.
- Statewide we experienced a 13.6% increase in new listings.
- Pending sales grew 11.5% as buyers took advantage of interest rates and inventory.
- Closed sales increased by 10% over the prior year.
- Median home prices grew by 7.2% to $268,000.
- Sellers were receiving 98% of their listing price.
Unseasonably warm weather and a robust economic environment had buyers chasing persistently low inventory. Compared to a year ago, housing stock was down -10.9% with only 2.1 months of supply in the pipeline—a -16% decline from March 2019. Statewide, the average sales price climbed +6.3% above last year to $302,503. This was reflected in the Housing Affordability Index which declined -1.9% from 12 months ago.
The seven-county Twin Cities region continued to run hot with only 1.5 months of inventory, and a +7.7% rise in the median price. Properties were sold within 43 days, more than two weeks less than the state-wide average of 57 days. Closed sales were up +12.3% compared to last March. The South Central Region soared above state closed sales average with a +26.5% increase, and a +45.5% bump in new listings. The Southeast Region also performed strongly with closed sales increasing +15.4% and new listings rising 9.3% over last March.
The central and northern regions still lagged even as new inventory increased. Although new listings crept up +2.2% over a year ago in the Arrowhead Region, closed sales were down -6.2% during the same period. On a similar track North Central listing increased +4.2% while closed sales declined -4.3% over a year ago.
“Pending sales figures were strong for March, leading us to believe that April and May closing numbers should be positive,” said Chris Galler, CEO of Minnesota Realtors®. “That said, April numbers will begin to illustrate just how the COVID-19 pandemic has impacted real estate.”
He added that showing activity fell off dramatically in the last week of March as many buyers and sellers put their plans on hold. Changing employment situations also took a toll on consumers, many who clearly remember the real estate difficulties a decade ago during the Great Recession. Still Galler saw reasons for hope and confidence.
“The CARES Act programs should help soften the financial situations of many families,” he said, siting direct cash payments to families, and unemployment insurance payments for Realtors® and other self-employed and independent contractors. Additionally, federally backed small-business loans with forgivable grants put money in the hands of workers directly impacted by the virus. On the financial side, Galler noted that Fannie Mae and Freddie Mac, the federally managed mortgage groups, are taking steps to ensure that credit is not impacted by the current crisis.
“Realtors® across the state are adjusting to the prolonged Stay at Home Order by leveraging new ways to do business,” says Galler. “Handshakes and hugs may be replaced by ZOOM calls and facemasks. Virtual tours and other technology helpers will give consumers options on how to view listing inventory and utilize the services of a Realtor®. During the months ahead, it will be important to focus on how you can adapt your business practices to an ever-changing consumer environment. We are very optimistic about the future.”
You can view the March Housing Report here.
About Minnesota Realtors®
Serving more than 21,000 real-estate professionals, Minnesota Realtors® (MNR) unites and empowers Realtors® throughout the state so they can thrive. Dedicated to helping Realtors® build their careers and grow their businesses, MNR provides a wide range of services and resources that include legal services, community education, government affairs, and code of ethics and standards of practice support. Founded in 1919, MNR is a non-profit organization. For more information, visit www.mnrealtor.com.
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