The Twin Cities real estate market continues to be strengthened by job growth, low unemployment and interest rates that, although slowly increasing, are still historically favorable. Sales are hindered only by lack of inventory.
Annual 2017 closed sales for the combined Twin Cities metropolitan area were virtually the same as last year, only 0.2% above 2016.
New listings were 2.2% lower in 2017 than in 2016, also very similar to last year.
Inventory, however, showed a dramatic year-over-year drop of 27.5%. Total supply of homes for sale the end of 2017 is only about 25% of the number of homes for sale 10 years ago, in 2007!
All of this continues to fuel strong prices. On average, sellers received 98.3% of their asking price in 2017. Overall median sale prices increased by 7.0%, average sale prices increased 7.5% to $293,674.
Part of the reason for the shortage in inventory has to do with the falling percentage of distressed sales. In 2011 short sales and foreclosures made up 50% of all sales for the year. In 2017 only 4.2% of sales were short sales and foreclosures… that is a huge change!!
This change also impacts sale prices, because short sale and foreclosure properties typically sell for less than traditional listings.
Months supply of inventory also ended the year at an all-time low of 1.3 months. When you break it out by type it becomes apparent why people downsizing from a house to a townhouse are having trouble… there is only a 0.9 month supply of townhomes available! That means it would take less than a month to sell all townhomes currently on the market if no new listings were added. Condos were hit hardest in the crash, but with a 1.3 month supply are now almost the same as single family houses at a 1.4 month supply.
There is only a 1 month supply of previously owned homes for sale… that is an extreme seller’s market! The only market that is balanced between buyer and seller is new construction, with a 5.1 month supply.
I hope sellers are getting the message that the stars are aligned in your favor… the time has never been better for selling your home!
The figures above are based on statistics for the combined 13-county Twin Cities metropolitan area released by the Minneapolis Area Association of Realtors.
Never forget that all real estate is local and what is happening in your neighborhood may be very different from the overall metro area.