Home sales in Minnesota and across the country are being stifled by a shortage of inventory, though sale prices continue to rise, according to a pair of state and national reports released this morning.
In Minnesota, existing home sales increased only 0.3 percent from April 2012 to April 2013, according to the Minnesota Association of Realtors. The median price of those sales increased 12 percent to $165,000 largely because of a decline in foreclosure and short sales, and growing competition in some markets.
The National Association of Realtors said that across the country home sales during the month increased 0.6 percent to a seasonally adjusted annual rate of 4.97 million from March, but were 9.7 percent higher than last year. The median price of those sales was $192,800, up 11 percent from last year.
Though national sales are the highest pace since November 2009, it was a disappointing report considering the strength of the recovery. In Minnesota and beyond, buyers have become increasingly active - and aggressive. Mortgage rates remain near record lows, and a shortage of listings is causing an outbreak of bidding wars in some of the most popular markets.
However, sellers haven't kept pace with buyers. New listings across the country fell 13.6 percent short of last year, while the overall inventory of houses for sale was up 11.9 percent by the end of April. Supplies of inexpensive, entry level houses are extremely tight.
“The robust housing market recovery is occurring in spite of tight access to credit and limited inventory," said Lawrence Yun, NAR's chief economist. "Without these frictions, existing-home sales easily would be well above the 5-million unit pace."
In Minnesota, new listings rose only 0.8 percent, while total inventory fell nearly 14 percent.