The supply of homes for sale is not only down in the Twin Cities, it is down dramatically nationwide as you can see from the chart below from Keeping Current Matters. The orange dotted line indicates a balanced market.
Our local supply inched up a little in February, but it is still dangerously low. Total supply of homes for sale was down 25.3% compared to last year, and months supply at 1.8 months is still historically extremely low… and 28.0% below February 2016. As interest rates rise, buyers are scrambling to find homes to buy and are frustrated to find them sold almost as soon as they hit the market.
The shortage is still lowest in prices ranges below $350k, but at least months supply crept up a bit… more notable in move-up price ranges. This is significant because potential move-up sellers in starter price ranges have been afraid to sell for fear of not finding a home to buy in higher price ranges… perpetuating the shortage cycle. We are seeing evidence of a continued increase in supply in March but it still isn't enough… the housing logjam needs to loosen to get the market flowing again.
Although February 2017 listings were higher than January they were still down 7.5% compared to February 2016. Total supply of homes for sale was down 25.3%. It should be obvious new listings are desperately needed!
Pending sales were eerily close year-over-year, up only 0.5% in February 2017. It would be much higher were there more homes for sale. Closed sales are hampered by the inventory shortage of a couple months prior (those tiny, flat red bars on the grey chart further above from the Minneapolis Area Association of Realtors).
Fierce competition for the homes that are on the market continues to drive prices… down a little from last month but up 7.6% compared to last year. Median price for February 2017 was $223,000. With many properties selling in multiple offers at prices higher than list price, average percent of list price received was 96.5%.
The key to keeping price growth to a moderate rate is an ample supply of housing… sellers, we need you!
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.
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- January 2017 market update… only 1-month supply of $120k-$250k homes
- The #1 thing to know if you are buying or selling a home this year
- 2016 Annual Twin Cities Housing Market Review