If you talk to someone searching to buy a home right now they are likely to tell you it feels like running a race! Buyer demand is pent up after being cooped up inside due to the coronavirus, fueled by some of the lowest mortgage interest rates in history. The problem is, inventory was low coming into the pandemic and although buyers will tell you new listings are coming on the market every day the supply at the end of May 2020 was 20% below May 2019.
The chart below from Minneapolis Area Association of Realtors shows how anemic the inventory is compared to previous years… at a time in the annual real estate cycle when supply is usually up. No wonder buyers are racing to new listings to hopefully beat other buyers before they are sold. Of course the competition only gets worse when making an offer to buy… sometimes with 30 or more buyers submitting offers for the same property!
Showings in the Twin Cities are up according to ShowingTime data in NorthstarMLS… making up for time lost during the pandemic shutdown.
The showings are resulting in sales, as pending sales have been climbing each week since April 17. Even in a normal year, new listings tend to drop off in the weeks before and after July 4th so don’t expect much increase in new listings over the next couple weeks.
What does this mean for buyers?
Competition is hot with so few homes actively for sale on the market. Coming soon listings are becoming more popular, which can help buyers plan ahead but competition even exists for showing times. With no overlapping showings due to COVID, showings are sometimes limited to only 15 minutes. Be ready to act fast!
What does this mean for sellers?
The market is hot right now, and buyer motivation is high. Homebuyers are in the mood to buy… if you have been thinking about selling your home it is likely to get more attention than ever right now!
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
