Housing Market Cools as Closed Sales Decline

By MNR News posted 12-12-2022 12:48 PM

Higher interest rates create hesitancy in buyers and sellers
MINNEAPOLIS (December 12, 2022) — The cooling trend in Minnesota’s housing market continued in November as closed sales fell 35.3% statewide compared to a year ago. New listings were down 17% below last year with 4,735 properties coming on the market. The median sales price was up nearly 2% to $310,000. As seen in recent months, sellers were receiving a little under their asking price, down 2.5% over November 2021. Homes sat on the market longer, an average of 40 days, marking a 21.2% increase. Because sales were moving slower, the total number of homes for sale across the state increased over 13% to 11,595. Overall, there was nearly two months’ supply of available housing inventory, a 38.5% increase over last November.  

“The declines in closed sales over the last few months indicate a return to more normal market conditions like those of 2020 and earlier,” said Chris Galler, CEO of Minnesota Realtors. “Still, with interest rates doubled from a year ago, and the median sales price ticking upward, housing affordability is a significant challenge for many buyers. They’re sidelined for now, hoping that rates and prices will come down. Potential sellers, on the other hand, are reluctant to enter a market with eroding buyer demand, and the prospect of higher interest rates when they purchase new homes. In December, however, there were signs that mortgage rates were beginning to cool. If the trend continues, it could have a stimulating effect as we move from winter to spring.” 

November year-over-year summary of key market indicators:   

  • Closed sales decreased 35.3% to 5,128 
  • Median sales price increased 1.7% to $310,000 
  • Average sales price increased 4.5% to $367,886 
  • New listings decreased 17.1% to 4,735 
  • Pending sales decreased 38.7% to 4,117 
  • Days on the market increased 21.2% to 40 days  
  • Homes for sale increased 13.3% to 11,595 

    Closed Home Sales Across Minnesota by Region

    In November, closed sales declined in 12 regions compared to a year ago, bringing Minnesota’s average number of closed home sales down 35.3% year over year. Northwest, which saw a modest 2.3% gain in closed sales, was the only region to mark an increase. The smallest declines were seen in Headwaters at 15.8%, South Central at 20.9%, and Arrowhead at 22.7%. The largest declines were reported in Central at 39.9%, East Central at 42.9%, and Southwest at 48.3%. See the chart below for more details comparing closed home sales for November 2022 to November 2021.

    The seven-county Twin Cities region comprises Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington counties. The official Minneapolis-St. Paul-Bloomington metropolitan statistical area recognized by the Census Bureau consists of 16 counties, on which MAR & SPAAR local associations report. 

    View full regional and county reports here. 

    View statewide report here. 

    About Minnesota Realtors® 

    Minnesota Realtors® (MNR) is the membership organization supporting all 22,000 Realtors® in the state of Minnesota. MNR is dedicated to helping Realtors® succeed in providing comprehensive and informed guidance to their customers seeking to buy or sell a home. MNR provides Realtors® with a code of ethics, continuing education, real estate transaction forms, legal services, and dispute resolution, as well as lobbying and advocating for homeownership rights and the real estate industry. MNR works in partnership with the National Association of Realtors, as well as more than 15 affiliate regional associations within Minnesota. MNR is a non-profit organization founded in 1919, with headquarters in Minnetonka, Minnesota, and a branch office in St. Paul, Minnesota. Find us at  www.mnrealtor.comand follow us on FacebookInstagramTwitter and LinkedIn.