Homes Selling Fast, But Not Enough Are on the Market

Homes Selling Fast, But Not Enough Are on the Market

Twin Cities inventory of homes for sale hits 20-year low.

The low inventory of homes available for sale in the Twin Cities is starting to cut into home sales across the 16-county metro area. Recent sales growth trends have been strong. But for February, pending sales flatlined compared to February 2020. According to the latest statistics there were exactly four fewer pending sales – for a total of 4,226 – compared to a year ago.

New listings dropped 12.6 percent compared to a year ago. According to numbers from the Minneapolis Area Realtors and the St. Paul Area Association of Realtors, the supply of homes on the market for sale is at a 20-year low.

The total number of homes for sale in the Minneapolis-St. Paul metro is down 46.3 percent compared to a year ago. Local realtors calculate that to be less than one month’s inventory of homes for sale. A balanced market is considered to have a supply of 4-6 months of homes for sale.

“With so many buyers vying over a shrinking pool of listings, well-priced and well-staged homes don’t spend much time on the market,” said Tracy Baglio, President of the Saint Paul Area Association of Realtors, in a statement. “That means buyers have to come out swinging right out of the gate with their best offer in order to be successful.

Closed sales were up 4.8 percent for February. The median sales price for February was up 11.5 percent to $314,000 compared to last February

A few other trends stand out:

  • Sales of luxury properties priced over $1 million were up 53.1 percent
  • New construction home sales were up 32.5 percent
  • Pending sales in the city of Minneapolis were up 23.3 percent

The Star Tribune recently reported that some buyers are offering to waive inspections as the competition to buy homes gets increasingly intense.

What’s on the market is selling quickly. According to MAR and SPAAR: “Homes are selling in record time—half the listings in February sold in under 19.5 days.”