The number of homes for sale was down 46.3% in February 2021 compared to February 2020. But the months supply was down even more… 52.9%, reflecting the many eager buyers competing for a shrinking supply of homes for sale… it is insane!
New listings were down 12.6% and closed sales up 4.8%. Pending sales were about the same as last year, not for lack of interest but for lack of inventory. With as many as 10, 15, 20 or more offers on a single listing there simply are not enough properties for sale to meet the demand.
There has been talk of diminished interest in buying in the city but that theory doesn’t hold up when looking at actual sales. In February sales were up 23% in Minneapolis and more than 8% in St. Paul even though overall sales were flat compared to last year.
With total homes for sale down 46.3%, more buyers are shifting to new construction as there are simply not enough previously existing homes to go around. Pending sales for new construction were up 23.8% while pending sales for existing homes were up only 7.2%… maybe this is where some of the buyers losing out on multiple bids are going. But it isn’t easy to buy there, either. I have been talking to new construction reps who say they are restricted on the number of new homes they can sell because they simply cannot keep up with demand… it doesn’t matter if you can sell a house now if it can’t be completed until a year from now!
The fierce competition drove days on the market down by 31.3%, to 46 days. But that doesn’t tell the whole story… that many properties accepted offers after the first few days on the market, and average sale price was 100.1% of list price. Median sales price continued to rise because of bidding wars, up 11.5% compared to last February.
Months supply of inventory is super low regardless of price range… unheard of that all price ranges below $1,000,000 have less than a 2-month supply, and even homes priced over $1,000,000 have only a 4-month supply. It is a seller’s market in all price ranges! Condos have a bigger months supply than houses and townhouses but still only a 2.5 months supply… buyers tend to be looking for more space away from shared elevators and hallways as a result of the pandemic.
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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Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
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