New Listings Spike as Interest Rates Drop, but Inventory Remains Low
March 10, 2020
Residential real estate surged in the metro area and southern Minnesota as spring fever hit the markets early. New listings were up +17.3% statewide over last February, and closed sales climbed to +4.1% compared to the 12-month average of +1.4%. Warm weather, low interest rates, and a higher affordability index fueled the trend. But even with the increased number of homes on tap, inventory is low.
“Through February, there is only a 63-day supply statewide” observed Chris Galler, CEO of Minnesota Realtors®. “By contrast, a typical housing market has between 120-180-day supply.”
He added that although some markets in Greater Minnesota have inventory levels cresting above 63 days, very few approach the 120-day mark.
Regionally, the Twin Cities matched the statewide increase in new listings, but homes moved twice as fast with an +8.2% increase in closed sales. Houses in the Twin Cities 7-country region are on the market only 51 days – nearly 2 weeks less than the state-wide average of 63 days. The central and northwestern regions of the state bucked the positive trend, with new listings in the Arrowhead dropping -11.1% and North Central sinking -3.4% over last year.
Average sale prices continued their upward trend reaching $290,202. Although that’s up +6.2% from a year ago, it’s still below the yearly average of $291,697. Statewide the median sales price was up +7.6% for February at $255,000. Much of that was driven by the seven-county Metro where the median is $288,250. However, in most areas of the state the median home price is considerably more affordable.
Galler predicts that the early spring and recent reductions in the 30 and 15-year mortgage rate will continue accelerating the housing market, bringing in many more first-time home buyers.
“Home buyers and sellers will need their agents to navigate the robust conditions. Multiple offers, especially in the median-priced markets will be common in many areas. It will be a seller’s market,” Galler said.
View the February 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 my.mnrealtor.com.