Home sale prices, rising steadily since 2011, again marked the Twin Cities Housing Market annual review, with average sale prices rising 7.8% year-over-year in 2020.
This pales in comparison to inventory, however, which fell by 17.8% in 2020… a dramatic drop from a peak of 27,640 homes for sale in 2007 to only 5,080 homes for sale in 2020!
This shortage resulted in a 12.2% drop in days on market until sale at an average 99.8% of list price.
Comparing average 2020 monthly showings to 2019 illustrates the showing frenzy to view the limited number of showings. Showings did not fade away at the end of 2020. Instead, December 2020 showings were not far from double what they were in December 2019.
Annual new listings held pretty steady in spite of the pandemic, but closed sales increased 7.7%…
…resulting in an annual drop in inventory of 17.8%.
Distressed sales are way down, only 1.3% of total sales compared to 50% in 2011.
Months supply of inventory is perhaps the best indicator of the market because it takes into account both supply and demand. The market is considered balanced between buyer and seller when there is a 5-6 month supply of homes for sale.
At the end of December 2020 the overall supply of homes for sale dropped 47.1% compared to 2019, to less than one month at 0.9. It was a seller’s market even for homes priced over $1,000,000! The shortest supply was for homes in the $190k-$250k category.
Supply varies not only by price, but also by new construction versus previously owned homes. Supply was down significantly for both… down 44.2% for new construction and down 46.2% for previously owned homes.
Supply by style saw a shift this year, with both houses and townhouses ending the year with an 0.8 month supply and condos with a 2.6 month supply.
This doesn’t tell the whole story, however. All three styles started the year fairy close, with March 2020 showing very little change over 2019. After that condo supply started increasing as townhome and house supply dropped, ending the year with months supply of condos up 52.9% and months supply of houses down 55.6% compared to 2019.
Different types and styles of homes also had distinctly different median sale prices, with new construction condos commanding the highest median sales price.
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.
Click here for local reports on 350+ metro area communities
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
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