MSP Home Prices Reach New Heights
In the 15 years that the Minneapolis Area Association of Realtors (MAAR) has tracked sales trends of Twin Cities homes, the median selling price has never crossed over a quarter of a million dollars.
That changed in June, said David Arbit, director of research and economics at MAAR, when as the price for a home in the 13-county area hit $259,000 last month.
“This is an all-time new record high for us,” he told TCB. For clarity, Arbit added that MAAR’s “digital data only goes back to 2003, so what we can say with 100 percent certainty is this is a 15-year high. But we can also say with 98 or 99 percent confidence that it is very unlikely the median price ever exceeded [$259,000] before 2003.”
Strong buyer activity continued in June, often the busiest month of the year for realtors. In fact, more sales for Twin Cities homes closed in June than any month on record—approximately 7,430.
A historically low number of housing options for sale has driven up prices of those on the market. With fewer homes on the market last June than any other summer month on record, Twin Cities buyers are bidding fast and high.
The average home last month sold in 47 days, about 16 percent faster than a year ago. “Similarly, the median percent of original list price received at sale was 100 percent, meaning half of the sales closed for over list price,” MAAR added.
Despite soaring prices, many homeowners are wary to put their houses up for sale given the fierce competition they’d face in finding a new home. As a result, new listings fell by half a percent in June compared to last year. Just under 12,500 homes remained for sale at the end of June, MAAR said.
Taking current trends—and assuming no new listings were created—the metro area’s real estate market would bottom out in two-and-a-half months. Typically, realtors consider five to six months of supply to be a balanced market, according to MAAR.
“We are still very thirsty for listings,” said Cotty Lowry, president of MAAR, in a statement.
MAAR president-elect Kath Hammerseng added, “Although the supply is tight, attractive and competitively priced homes remain in high demand. But even as construction activity recovers somewhat, wage and housing supply growth remain key to balancing out affordability concerns.”
A strong local economy, alongside an unemployment rate that beats the national average have both played a part in the housing market’s low supply, high demand situation, MAAR said.
“The Minneapolis-St. Paul region has a resilient economy with a global reach, a talented workforce, top notch schools and a quality of life that’s enabled one of the highest ownership rates in the country,” it wrote.