Twin Cities Housing Review April 2019
Minneapolis-St. Paul Real Estate Big Picture
The Spring Housing Market is in play. Prices are on the rise as inventory levels continue to decline. Hopeful buyers in the lower price range are jumping on desirable properties hoping their offers rise to the top of the heap.
Months supply of inventory is improving in the mid-price housing range. We see steady sales activity in the higher price ranges, while in the lower tiers, buyers are still finding that landing a deal on a home to be a challenge, especially for desirable homes in sought-after locations.
What’s Up and What’s Down
Compare new listings to April of last year; we see an increase across the 16 county Twin Cities region of 4.5%. Closed sales were down 6.9%, while the median sale price rose 5.2%. Pending sales were also down 1.1%, and inventory levels were 1.2% lower.
April weather was wintery at times, which discouraged buyer traffic and slowed sales. This trend was seen across Minneapolis and other parts of the nation. Higher prices, less affordability, and low inventory combined forces dampening sales.
Let’s Dig a Little Deeper into the Housing Stats
While the median sale price rose 5.2% to $281,000 and days on the market, rose 5.7% to 57 days. The price range with the most significant gains in sales was $1,000,001 and above, showing an increase of 10.7 percent.
Condos enjoyed the most substantial price increases, up 12.4 percent to $179,900, while homes in the $190,001 and $250,000 range sold the quickest at 34 days. The maximum inventory gains were in the townhome segment, increasing 1.1 percent.
Consumer confidence got a boost by National Unemployment at 3.6 percent. That figure represents the lowest since 1969. Although the Minnesota unemployment rate for April ticked up slightly to 3.3 percent, it is still below the national average, which should make us smile. While this is good news, higher prices are making affordability a factor.
Current interest rates remain low, fluctuating around the 4.25% mark. We currently see a 14 month low, which is exciting when you consider that a few months ago, predictions were they would be around 5% right now.
New Construction in the Twin Cities
Newly constructed homes saw gains of 3.7 percent in pending sales. The median sale price increased by 1.7 percent for April compared to 2018. Inventory levels were up 10 percent, and months supply rose 7.3 percent at 5.9 months. Sales of new homes were 3.7% stronger than sales of existing homes.
From the April Hotsheet
For March, building permits for single-family and multi-family units fell by double digits. Those numbers are the lowest for construction permits issued in the Twin Cities since 2015.
- single-family permits: 339 down 12% over March 2018
- multifamily permits: 623 units down 24% over March 2018
The decrease in permits pulled was partly due to a Twin Cities winter that just wouldn’t quit. “We are still feeling the lingering effects of a longer than usual winter on the housing market,” said John Rask, president of BATC-Housing First Minnesota. “We have seen homebuyers out in numbers during the Spring Parade of Homes, and we expect homebuilding activity to pick up in the coming months.”
Where Are Twin Cities Metro New Homes
Lakeville led with 35 permits issued. Following was Lake Elmo with 30, then Woodbury with 27, and Plymouth with 21. Otsego and Dayton are both tied with 17 tickets each.
I’m still optimistic that 2019 will continue to be a year of brisk home sales activity. The prospect of lower interest rates will lessen the impact of higher prices, but without doubt, inventory and affordability will continue to challenge first-time homebuyers.
Twins Housing Data April 2019 compared to April 2018
- new listings up4.5%
- pending sales down -1.1%
- closed sales down -6.9%
- days on the market until closing up 5.7%
- inventory of homes for sale down -1.2%
- month’s supply of inventory flat
- median sale price up +5.2% to $281,000
- original list price received down -0.5%
- the top price tier of $1,000,001 and above saw the most gains, up 10.7%
- Condos earned the most significant price gains for housing type, up +12.4%
- new construction sales topped existing homes, up +3.7%
- fastest-selling homes were priced from $190,001 to $250,000 (34 days)
12 Months Rolling Stats from May 2018 to April 2019
- new listings up 2.7%
- pending sales down -2.4%
- closed sales down 3.1%
- overall median sales price up +7.6%
*data source Minneapolis Area Association of Realtors.