Inventory continues to be the lead story in the real estate market. March 2021 again ended the month with less than a month’s supply of homes for sale and a drop of 52.6%.
But what really blew my mind was looking at supply by price range. The lowest supply range continues to be the first-time homebuyer range of $190k-$250k with only a half month supply. But homes priced $1,000,000+ only have a 3.8 month supply! This really hits home when you compare it to last year at this time… when there was an 11.3 month supply of homes priced $1M+!!!
Remember, a balanced market has a 5-6 month supply of homes for sale. It is a seller’s market in every category. Condos continue to have the biggest supply at 2.5 months, compared to houses and townhomes both at 0.8 months supply.
Looking at a year-over-year comparison to last year for all price ranges really shows just how far our supply of homes for sale in relation to the rate at which they are selling has dropped. No wonder we are having intense bidding wars.
New listings were down 11.6% while pending sales were up 12.1% and closed sales up 2.9%. Buyers are in fierce competition for the homes available.
This competition drove days on market until pending down 31.1%, average sale price up to 101.9% of list price and median sale price up 10.3%, to $327,500.
Total homes available for sale dropped 50.7%. The low supply of previously owned homes has drive some buyers to the new construction market. New construction pending sales are up 25.6%, but all is not rosy there, either. The cost of building supplies have increased substantially and supply is backlogged, limiting new construction and increasing costs. For example, big builder DR Horton is no longer allowing buyers to make of their own material selections because they cannot guarantee an available supply. All the homes they are currently building are spec homes with all selections made by the builder.
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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