The real estate market update for April 2022 shows the impact of rising interest rates in the supply of homes for sale by price range. The only price range that showed an increase in months supply was the $350k-$500k range, which showed an increase of 18.2%.
That $350k-$500k price range has been the sweet spot for many buyers who were able to stretch due to the low interest rates. The increase of supply in that price range is likely due to a shift down to a lower price range as rising interest rates pushed buyers out of that price range.
Months supply in the $500k-$1M price range was the same as last month. Everything else was down in double digit percentages. Even the supply of homes for sale $1M+ went down 25%.
New listings, pending and closed sales were all down compared to last year.
But the low supply of homes for sale pushed days on the market down, while percent of list price received and median sale prices continued to climb due to competition for a limited supply.
You can see from the chart below how uncharted the increase in percent of sales price over list price has been the last two years. The red line is 100% of list price.
Although not a reflection of all multiple offers, searching for ‘multiple’ in agent remarks in listings at least gives an indication of the prevalence of multiple offers impacting the increase in sales prices. It started in 2020, and really took off last year in 2021. This year has had a strong start. The market is shifting, but buyers are still out there eager to secure a home amid all the competition. It will be interesting to see what the rest of the year brings.
New construction inventory is up 63.6% compared to last year, while previously owned inventory is down 20%. While new construction can help with the supply shortage, rising interest rates may be pricing some buyers out of that option.
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
RELATED POSTS
