Home sales continue to defy expectations in the midst of the COVID-19 pandemic, but what I see as the biggest emerging story is the shift in housing supply. I talked about the signs in my June market update last month, but the shift in a diminished supply of houses for sale and an increase in the months supply of condos for sale is growing more and more pronounced.
You can see in the chart above that houses, townhomes and condos were comfortably hanging out together in the first quarter, much as they have been doing in recent years. But post-pandemic shutdown, the supply of houses has been decreasing while the condo supply has been dramatically increasing. Months supply of houses was down 37.9% compared to last year both in June and July… while the supply of condos has dramatically increased 43.5%!
The overall supply of inventory has been dropping as buyers are gobbling up homes after being cooped up due to the pandemic. But there is a shift as more people are selling condos and buying houses than vice versa. If you have been thinking about buying a condo, this could be a good time.
Sellers are starting to come back, with the first increase in new listings since March, albeit a modest 0.8% increase. Encouraged by low interest rates, both new and move-up buyers are driving pending sales up 10.3% and inventory down 28.0%.
Closed sales are increasing again, by 3.4% compared to last July. Days on market increased a bit, and average percent of list price is again over 100% reflecting the fierce competition in the home buyer marketplace.
Median sales price rose to $312,500 in July 2020, up 10.4% from July 2019.
All price ranges below $350,000 had less that a 2-month supply, and even the $350k-$500k price range had only a 2.1 month supply. It’s still a seller’s market in the $500k-$1M price range. Only in price ranges over $1,000,000 is it a buyer’s market.
The data in this post comes from statistics 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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Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
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