Housing stock plunges as buyers compete
MINNEAPOLIS (August 11, 2020) – In July, the sluggishness of the early 2020 season surged back to life with soaring transactions. Pending sales were up +12.2% over July 2019, and closed sales increased +7.5% over last year. This marked the first time closed sales were up year over year since April. But an acute housing shortage continues to hamper the market. Although buyers were out in great numbers, they competed for shrinking inventory. New listings are down -4.2% from July 2019 and homes for sale have plunged -32.3% with only 15,734 dwellings on the market. This translates to only 2.2 months supply available.
Year-over-year metrics summary:
- Closed sales: +7.5% to 10,261
- Median sales price: +7.7% to $280,000
- Average sales price: +7.8% to $318,100
- New listings: -4.2% to 11,306
- Pending sales: +12.2% to 10,091
- Days on the market: +12.8% to 44 days
- Homes for sale: -32.3% to 15,734
- Months supply of inventory: -33.3% to 2.2
“Increased activity among buyers drove demand for homes in the under $300K category,” said Chris Galler, CEO of Minnesota Realtors. “Multiple offers are pushing the median price higher as inventory remains low.”
“Despite only a -4% year-over-year decrease in listings—much lower than the double-digit declines of April, May and June—the July market remained tight and highly competitive.” Galler said. “That’s why closed and pending sales are seeing the highest year-over-year growth since March.”
Apart from pent-up demand created during the period of the stay-at-home order, Galler said that Realtors are seeing increasing numbers of buyers looking for larger houses with ample space for home offices.
“Many workers realize that they will be operating from a home office for the foreseeable future,” Galler said. “A considerable number of people will continue working this way even after the pandemic passes. That’s why home offices are on their list of must-haves for a new home. Properties that have offices and reliable high-speed internet reception are becoming top-shelf commodities.”
Closed Home Sales Across Minnesota by Region
Regional closed sales show that most areas exceeded the state’s +7.5% average with only five regions underperforming, including the seven-county Twin Cities area. Of those, only three saw stagnant or negative trends over last year. See chart for more details comparing July 2020 to July 2019.
The seven-county Twin Cities region comprises Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington counties. However, the official Minneapolis-St. Paul-Bloomington metropolitan statistical area recognized by the Census Bureau consists of 16 counties.
View full regional and county report here.
View statewide 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 or follow us on Facebook, LinkedIn, Instagram and Twitter.