With a continued shortage of inventory, multiple offers and resulting sales prices over list price are on the rise again… not at the levels of the Unicorn Years (2021-2022) but still higher than in the pre-pandemic years and enough to be annoying for buyers in competition to buy a home.
You may have heard that the market is falling, but be aware of what is being compared. Year-over-year comparisons are the most common. Compared to the last two years, percent list price received is down… but it is still over 100%. Overall days on market is also higher, but it is still common for good properties to sell in one weekend… just not all of them. The difference in multiple offers this year is that there aren’t as many for a single property, and the offers typically aren’t as crazy high over list as they were the last two years. In this market, getting a property for list price is often considered a ‘good deal’.
While median sales price is down compared to last year, prices are still showing a normal upward curve… just not as crazy increases as the last two years. That growth was unsustainable… we are now heading back to ‘normal’.
New listings, pending and closed sales are all down compared to last year.
Last year total inventory rose by 16.6% in May. This year it fell by 9.0%… new listings aren’t keeping up with sales.
What I have long considered to be the best indicator of the market is months supply of inventory, which takes into account both the number of homes on the market and the rate at which they are selling. Overall, there is a 1.8 months supply… but in price ranges $190k-$350k there is still less than a one-month supply, a strong seller’s market. Prices over $1M are at the upper edge of a balanced market at 6 months. The supply of condos is about twice that of single family homes and townhouses.
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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