Realtors® pivot and rapidly adapt to changing market conditions
In an economy battered by a global pandemic and locked down by a state-wide Stay at Home directive, the Minnesota real estate market showed surprising resiliency in key areas.
- Statewide closed sales were up +1.1% in April compared to a year earlier
- Days on market fell by -12.7% to 48 —less than seven weeks
- Median Home Prices increased to $275,000, +9.4% higher than 2019
- Average Sale Price increased by +5.3% to $305,539
- Sellers received 98.8% of their asking price
- The Affordability index held steady at 161, the same as the previous year
“All in all, the real estate market held up through the first full month of the governor’s Stay at Home order,” said Chris Galler, CEO of Minnesota Realtors®. He credited the swift action of the state’s real estate community in upgrading their online platforms and adopting virtual open houses and showings.
“This helped them conform with CDC distancing guidelines and other regulations, and still conduct business. They were often rewarded by home buyers who understood that low interest rates, less competition and an inevitable economic rebound was in their future,” Galler said.
In the short term, however, fallout from the COVID-19 crisis is stressing the housing market. New listings across the state were down -25.8% with nearly 3,000 less houses listed than April 2019. Pending sales sank -20.5%, making April the first month in the last year that did not see a year-over-year increase. That amounted to nearly 1,700 less pending sales.
Amidst all the turmoil, the one constant is the lack of housing inventory, which was down -14.1% or 2,645 fewer homes on the market. April marked the eighth consecutive month of inventory declines.
“Sellers who contemplated listing in the spring, put their plans on hold waiting to see how the pandemic would evolve,” observed Galler.
With job losses hitting almost 20% of Minnesota workers by mid-April, the state’s economy is contracting and will likely take months to recover after restrictions are eventually lifted. Still, for those who remain employed, Galler predicts that traditional motivations like moving before the school year resumes will spur real estate activity.
“Interest rates are good and after being locked inside for 60 days, some will have taken the opportunity to prepare their house for market,” he noted. “That doesn’t mean we’ll see marketing activities as we had before the virus. Consumers will be leery of ‘business as usual in the near term.’” He predicted that changes already well underway with virtual showings and closings, stringent safety protocols, and other measures will restore consumer confidence and help drive the market forward.
“This state’s Realtors® are proving every day that we can adapt to change. We can adjust our business practices, we can modify our behavior, and we can help all Minnesotans live the American Dream through homeownership,” Galler said.
View the full April Market Report here.
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