Year Ends with Marked Declines in Closed Sales

By MNR News posted 01-11-2023 08:44

Inventory is up, but high interest rates continue to dampen activity
MINNEAPOLIS (January 11, 2023)
— In December, closed sales fell almost 39% across the state compared to a year ago, marking 12 straight months of declines. New listings were 17% fewer than last year with 3,031 new properties coming on the market in December. With buyer demand slipping, homes were staying on the market longer, up 24.3% to 46 days. Sellers were accepting offers that averaged about 96% of the home’s original asking price. The overall number of homes for sale was up 15.3% compared to last year rising to 9,204 properties and putting a month and half of inventory in the pipeline, which is a 50% increase over December 2021. Despite decreased buyer activity, the median sales price notched up 1.7% to $305,000. 

“The overall trend in 2022 was a return to normal market conditions,” said Chris Galler, CEO of Minnesota Realtors. “Every year-over-year decline in closed sales we measured on a monthly basis was compared to the extraordinary activity of 2021. As we head into 2023, we’ll hopefully see declines level off, setting the stage for a healthy resurgence of sales in the spring. Interest rates, of course, remain a critical factor. As December closed, the rate on a 30-year mortgage rose to nearly 7%. By early January, it slipped to just over 6.5%. Still, potential buyers and sellers are wary, cautiously waiting to see which way the housing trends will go. Big picture: All the indicators show a market that has slowed but is fundamentally healthy and ready to resurge when inflation eases.” 

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

  • Closed sales decreased 38.7% to 4,444 
  • Median sales price increased 1.7% to $305,000 
  • Average sales price increased 2.6% to $361,159 
  • New listings decreased 17.1% to 3,031 
  • Pending sales decreased 27.6% to 3,344 
  • Days on the market increased 24.3% to 46 days  
  • Homes for sale increased 15.3% to 9,204
% Change YOY in 2022 Statewide Closed Sales 
Month  Closed Sales
January -9.9% 
February -12.9% 
March -8.4%
April -10.9%
May -6.5%
June -13.7% 
July -19.2% 
August -17.0%
September -18.2% 
October -30.7%
November -35.3%
December -38.7%

Closed Home Sales Across Minnesota by Region

In December, closed sales declined in 12 regions compared to a year ago, bringing Minnesota’s average number of closed home sales down 38.7% year over year. The exception was the Upper MN Valley, which saw a 21.1% increase in closed sales. Otherwise, the smallest declines were seen in Southwest at 22.8%, Southwest Central at 25.4%, and Northwest at 30%. The largest declines were reported in South Central and East Central, each at 46.6%, and North Central at 47.3%. See the chart below for more details comparing closed home sales for December 2022 to December 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 Facebook, Instagram, Twitter and LinkedIn.