Demand For Twin Cities Homes Shows No Sign Of Slowing At Summer’s End

Demand For Twin Cities Homes Shows No Sign Of Slowing At Summer’s End

However, interest rates are expected to rise in December, could affect buyer demand in the future.

Buyers continued to feel the pinch of limited real estate options as Twin Cities homes both saw price gains and sold more quickly, the Minneapolis Area Association of Realtors (MAAR) said Wednesday.

More than 7,000 new homes entered the market last month, a year-over-year increase of 2.1 percent, which led to an uptick in both pending sales (7.9 percent) and closed sales (7.4 percent).

However, inventory levels fell considerably during the month, dropping 18.8 percent from a year ago to short of 14,000 active properties.

As a result, the lack of homes to choose from has pushed buyers to bid high and act fast. Sellers on average received about 98 percent of their original list price. The average time it took for a home to sell fell significantly in August to 55 days, the second fastest time for any month since the beginning of 2007.

After Twin Cities home prices set an all-time median sales price high of $242,000 in June, the median going rate decreased in August to $237,750.

“In the near term, buyer and seller activity always quiets down around this time of year and that shouldn’t cause concern,” said MAAR president-elect Cotty Lowry in a statement.

Demand for housing continues to be high, MAAR said, due to the Twin Cities metro area’s low unemployment rate and unmoving interest rates.

“Over the long term, favorable interest rates, rising rents and a strong labor market should be conducive to housing,” Lowry added. “But we’ll need some additional inventory—particularly in the affordable brackets—in order to keep up with customer demand.