October 2018 Market Insights

Keen observers of the Twin Cities real estate market will note a tonal shift in the language used to describe the market. Intense phrases like “hot market” or “fast-paced” are being replaced by more restrained descriptors like “balancing” and “moderate.”

That’s not to say that the market is not still tilted towards sellers (it is), but as the market changes, experts are working not only to explain the current status of the market, but to set reasonable expectations for the future direction, as well.

Key insights for September 2018 (compared to Sept. 2017)*

• New listings: 6,474 | +6%
• Median sales price: $247,000 | +6%
• Pending sales: 4,848 | -2%
• Days on market: 50 | -16%
• Inventory: 13,152 | -4%
• Months’ supply: 2.6 | -4%

Entry level and move-up markets tell different stories

In the aggregate, it’s easy to see additional new listings as being a boon for buyers in all market segments, but a closer look reveals that new listings under $300,000 fell almost 7 percent last month.

New listings

• <$300K: -7%
• $300K-$500K: +26%
• >$500K: +21%

Median sales price

• <$300K: +4%
• $300K-$500K: -1%
• >$500K: -1%

Pending sales

• <$300K: -8%
• $300K-$500K: +14%
• >$500K: +14%

Experts predict that falling inventory, less affordability and rising mortgage rates in the entry-level segment will lead to slowing demand, which we can already see playing out in falling pending sales, which were down 8 percent for homes under $300,000.

For those moving up to their second home, or a luxury home, the picture is more optimistic. Inventory of homes for sale in these brackets is rising, prices are steady to a little lower and the picture is overall more balanced.

Sellers in move-up brackets can expect longer time on market, buyers who are under less pressure and fewer multiple-offer situations. Pricing right for the market will be essential in this bracket, as savvy buyers won’t feel the need to bid on homes that are priced too high.

Economic check up

• Minneapolis-St. Paul area unemployment rate: 2.5% (The best in the nation!)
• Average rates for 30-year conforming mortgage: 5.0%
• Rising interest rates, tariffs, worker shortages and regulations remain a challenge for builders.

The long and the short of it

While we are certainly experiencing changes in the market, most do not expect to see an abrupt shift away from the trends we’ve been observing over the past few years, but rather a gradual move back towards a healthy balance.

Where you live

Edina Realty serves locations all across Minnesota and western Wisconsin. Here’s a look at the market indicators where you live. All percent changes are year-over-year.

Alexandria Area

• New listings: 132 | -3%
• Avg. sales price: $207,000 | -8%
• Pending sales: 92 | -15%
• Days on market: 52 | -27%
• Inventory: 537 | -8%
• Months’ supply: 5.4 | -8%

Brainerd area

• New listings: 515 | +19%
• Avg. sales price: $228,000 | +2%
• Closed sales: 467 | +9%
• Days on market: 75 | -13%
• Inventory: 2,107 | -16%
• Months’ supply: 5.3 | -17%

Duluth area

• New listings: 392 | +22%
• Avg. sales price: $209,000 | +12%
• Closed sales: 343 | +19%
• Days on market: 54 | -21%
• Inventory: 1,689 | +23%
• Months’ supply: 6.2 | +13%

Southeast Minnesota area

• New listings: 567 | -2%
• Avg. sales price: $219,000 | +9%
• Closed sales: 459 | -22%
• Days on market: 51 | -7%
• Inventory: 1,502 | -1%
• Months’ supply: 3.1 | +3%

St. Cloud area

• New listings: 196 | +12%
• Avg. sales price: $192,000 | -1%
• Pending sales: 151 | -10%
• Days on market: 43 | -22%
• Inventory: 470 | -22%
• Months’ supply: 3 | -25%

Northwestern Wisconsin area

• New listings: 907 | +7%
• Avg. sales price: $168,000 | +5%
• Close sales: 677 | -12%
• Days on market: 189 |No change
• Inventory: 6,855 | -10%
• Months’ supply: 15 | +23%

Let’s get started

Do you trust a computer algorithm to see the true value of your home? To get a human’s knowledge of what your home could sell for, you need a home value estimate from a professional Realtor. Reach out to be connected with a market expert in your area.

Looking for more information about selling? Download the Ultimate Guide to Selling Your Home for tips and ideas from local professionals.

If buying a home is on your horizon, check out our Go-To Guide for Buying a Home. It’s free and full of answers to your home buying questions.

*Data courtesy NorthstarMLS for the 13-County Twin Cities metro area for September 2018