Pending sales fell on a year-over-year basis for the sixth straight month in the Twin Cities metro, but sellers enjoyed higher prices, with the median sales price reaching a record high. Homeowners showed signs of warming up to selling their homes.
Key insights for May 2018*
- New listings: +3%
- Median sales price: +8% — $271,000
- Pending sales (signed purchase agreements): -5%
- Average days on market: -10% — 47 days
- Number of homes for sale: -18%
Homeowner equity continues to rise
Rising home prices are leading to increased equity and household wealth for homeowners, but many owners are waiting to list their homes. Homeowners who are ready to list their homes have seen fast and furious showing activity and strong bids that frequently go above asking price. The average percentage of the original list price received by sellers was 100.2 percent last month.
More new listings last month has local experts hopeful that sellers may be warming up to the idea of selling their homes, freeing up some critical inventory for hungry buyers.
Property type breakout
Single-family homes make up the lion’s share of property sales in the Twin Cities, followed by townhomes and then condos. Condos saw nearly 6 a percent increase in new listings, which gave condo buyers more options to choose from. New listings gave pending condo sales a boost while other property types lagged.
- Single family homes – 4,837 pending sales, -5%
- Townhouses – 1,264 pending sales, -7%
- Condos – 438 pending sales, +3%
Eye on new construction
Another area of pending sales growth is new construction, as buyers turn to building new homes when existing inventory can’t meet their needs. Pending sales of newly-built homes were up nearly 5 percent over May 2017.
But even new construction has its challenges. According to the Builders Association of the Twin Cities, new construction has struggled to make up for the lack of home supply due to a shortage of inexpensive land and skilled workers.
Economic check up
- Minneapolis-St. Paul area unemployment rate: 2.7%
- Average rates for 30-year conforming mortgage: 4.7%
- A new study suggests it’s easier to get a mortgage in 2018.
- A strong local economy with good job growth is an indicator for the future of homeownership.
- Long term price trends show home sales prices have returned to where they would be if home prices had appreciated 4 percent each year since 1990.
The long and the short of it
Many homes in the Twin Cities are selling quickly and with strong offers. Sellers who list while inventory is still low stand the best chance of receiving strong and multiple offers on their homes.
If you’re ready to find out what price your home could fetch, reach out to be connected with a market expert in your area. You can also download the Ultimate Guide to Selling Your Home for insider secrets and tips.
*Data courtesy NorthstarMLS for the 13-County Twin Cities metro area for May 2018