Twin Cities May Housing Market Review
May Housing For the Twin Cities In Two Words – Extremely Competitive
The story for May housing in the Twin Cities is one we have told over and over for months. With the supply of inventory 17.3% lower than last year, it’s about a tale of heavy buyer demand and intense competition to secure a deal on a home. This extraordinary sales activity in the face of an extremely challenging playing field for buyers is continuing to fuel this market causing home values to rise and properties to close in record time. In addition, with the average sale price at 99.5% of ask, that means approximately 50% of homes are getting sold for list price or above.
As is characteristic of any market where supply falls short of demand, home prices are rising. The median sales price for May was $250,000 up 5.5% over same time last year with the average sale price up 6.3% at $294,243. Strongest sales were in the below $250,000 category, making the market most especially difficult for first-time home buyers. The market segment with the strongest sales was townhomes.
New listings for in the Twin Cities for May were up slightly by 0.7%, pending sales down 3.1% and inventory levels fell 17.3%. The supply of homes for sale sat at 2.3 months down 20.7% compared to May 2016. The bright spot on the supply side is new construction. Low borrowing rates and strong demand for housing is inspiring builders and inventory of new construction was up 9.1% for the month of May.
Twin Cities Metro Housing Quick Stats
- Given extraordinary demand and limited inventory, home prices continue to rise
- Diminished inventory resulted in lower closed and pending sales
- Condos had the largest price gains with a 6.9% increase for a median sales price of $155,000.
- Fastest selling price range $190,001 to $250,000 at 46 days on the market
- Slowest selling price range $1,000,001 and above at 196 days on market until sale
- Price range with the largest gains was the $1,000,001 and above segment with sales increasing to 21.5%
Twin Cities Metro Inventory Snapshot
- new listings up 0.7 %
- inventory of homes for sale down -17.3%
- the month's supply of inventory down -20.7%
- the month's supply of inventory currently at 2.3
- new construction inventory up 9.1%
- new construction inventory at 5.6 months down 9.7%
As we move into summer, first-time buyers are learning that they will have to spend more of their monthly income to buy a home. Higher prices are causing some to slow down and give more thought to the process. On the seller side, the highly competitive market situation is inspiring many to stay put rather than try to buy a move-up home in the current competitive situation which will only serve to heighten the tight inventory situation. Ouch!
Here is a snapshot of the week ending June 10
- New Listings up 2.3%
- Pending Sales down at 1,442
- Inventory down 16.1% to 12,107
Please keep in min that the data used in this report was for the entire Twin Cities Metro. Stats for the individual cities within the region may tell a different story. If you are interested in looking deeper the reports are available to the public from the Minneapolis Association of Realtors website.