In the 13-county Twin Cities metro, home sellers continue to see improvement in nearly every metric with higher sales prices and faster sales, according to data from the Minneapolis Area Association of REALTORS®.
- Median sales price rose 5.7 percent year-over-year to $236,826, second only to June 2006 for the highest monthly median sales price on record in the area
- Pending sales were up nearly 10 percent from May 2015, indicating strong buyer demand
- Average number of days a home is on market dropped from 76 days in May 2015 to 60 days, meaning homes are selling an average about two weeks faster
- Most sellers are accepting offers higher than their current list price. (Though the same is not true for the original sales price, indicating that once a home is priced properly, it draws solid offers.)
Despite these favorable numbers, many homeowners remain on the sidelines, much to the chagrin of buyers who face low inventory in many markets and are competing, often in multiple offers.
- Inventory of homes for sale dropped 20 percent from last year
- New listings coming to market increased a scant 1 percent year-over year
- Months' supply of homes for sale fell 29 percent to 2.7 months - the lowest May figure since 2003
Reasons owners are holding off include still being underwater on their current home, or concern about facing the tight buying market once their house sells.
The number of homeowners who currently owe more than their home is worth is shrinking, so it should be less of an obstacle as home prices continue to rise. Many sellers and their REALTORS® have come up with creative solutions to inventory constraints with temporary housing solutions and "reverse contingencies."
Buyers have favorable conditions, too
Despite tight competition in very popular localities and price points, buyers are still enjoying good conditions. Smarter lending practices, low mortgage rates and job and wage growth are all contributing to strong buyer demand.
Luxury market update
Homes priced $500,000 and above have seen a softer market that trends towards favoring buyers. Homes in this segment stay on the market nearly twice as long as lower-priced homes and buyer demand is lower due to the exclusive nature of this segment.
Plus, sellers in this price bracket are facing increasing competition from new construction, with one in four listings over $500,000 being a new build.
Learn more about what to expect when selling an upper-bracket home in Minnesota or western Wisconsin.
Other segments to watch
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The Monthly Skinny
"The Monthly Skinny" is provided by the Minneapolis Area Association of Realtors
*Edina Realty Appointment Center statistics.
Based on information from the Minneapolis Area Association of REALTORS®, Inc. Data collected from the REGIONAL MULTIPLE LISTING SERVICE OF MINNESOTA, INC., for properties in the 13-county region exclusively.