In 2020 I noticed a distinct shift in the months supply of condos for sale that coincided with the coronavirus lockdown. As the supply of houses and townhomes continued to fall compared to the previous year for all of 2020, the change in months supply of condos was soaring above pre-pandemic levels through the end of the year even though it started to moderate starting in September. The chart below shows the shift in supply from January 2020 through to January 2021.
Looking at the same data from January 2021 to January 2022 shows another distinct shift, as the months supply of condos falls throughout the year, falling below the previous year supply in May 2021… clearly showing how the interest in buying condos waned during the pandemic. While the months supply of condos was more than three times that of houses and townhouses in January 2021, it has dropped to a little more than twice the supply in January 2022. This indicates that buyers are again showing interest in purchasing condos. The supply isn’t as great for buyers, but conditions are more favorable for sellers.
Overall, new listings, pending sales and closed sales all fell below last year in January 2022.
A big reason is the shortage of inventory, easy to see in the historical chart below of inventory supply since 2004.
But another reason is how quickly properties are selling. According to the National Association of Realtors, 79% of homes sold in January nationwide were on the market less than a month. It should come as no surprise that with that strong an appetite for homes for sale days on the market stayed low while percent of list price was still strong and median sales price rose compared to January 2021.
Looking at months supply of inventory, which takes into account both the number of homes for sale and rate at which they are selling, was 20% below January 2021 and tied with December 2021 which was at an all-time low at 0.8 months. Homes in price ranges $190k-$350k had only half a month supply, price ranges $350k-$1M had only about a month supply, and even price ranges over $1M only had a 2.4 month supply!
As I work with buyers in this continuing insane market, it feels like a replay of 2021 after the intense competition settled in… just starting even earlier.
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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