Inventory didn’t drop quite as much in June 2021 compared to June 2020, but it still fell 35.5% year-over-year. What is perhaps more telling is comparing it longer term. In June 2011 there were 24,889 homes for sale. In June 2021 there were 6,592 homes for sale. That is a 73.51% drop. That is huge.
The low number of homes on the market paired with a high number of buyers has created an extreme seller’s market with only a 1.1 months supply of homes available, down 47.6% compared to last year. In contrast, looking back 10 years to 2011 there was an 8.0 months supply of homes for same… a strong buyer’s market. That is a 99.86% drop. No wonder buyers are frustrated trying to find a home!
New listings increased by 10.7%, struggling to catch up. Pending sales decreased for the first time since April and May 2020, right after the coronavirus shutdown. Closed sales increased 19.9% over June 2020, the highest increase so far this year.
The intense competition for few properties has caused days on the market to drop 52.4% compared to last year… now at only 20 days. Since we have been looking back 10 years this month, average days on the market in June 2011 was 145… a big change from today! Those were the days when you could make a second showing and actually ponder your purchase before making an offer. Average sale price in June 2011 was 8.6% below list price… in June 2021 it was 4.2% above list price. Median sales price continues to rise… to $350,000 in June 2021. In June 2021 it was $162,100.
The total number of homes for sale didn’t fall as much as the months supply, reflecting the buyer frenzy. Many buyers are driven to new construction given the short supply of existing homes for sale, but the supply chain is hindering that market. Compared to last year, when the coronavirus was slowing everything down, new construction sales have increased more than sales of previously owned homes.
It continues to be a seller’s market in every price range. Every price range under $1M has less than a 2 month supply, and even prices over $1,000,000 have only a 3.9 month supply. Condos continue to be the property type with the biggest supply, but that is still only 2.6 months… a strong seller’s market.
The July market feels like it is softening… time will tell…
Some speculate we are seeing signs of buyer fatigue… after losing out on multiple offers some buyers may be taking a summer break. Buyers may be holding back to enjoy the summer as pandemic restrictions lessen. But there may be more at play here… according to a Fannie Mae survey 64% of buyers said this July is a bad time to buy, up from 56% in June… and 38% last July.
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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