House listings in the Twin Cities posted a rare increase last month, a slight shift in the long-running sellers’ market.
During May, sellers listed 9,164 properties, a 2.9 percent increase and the most new listings in a single month since 2010, the Minneapolis Area Association of Realtors reported Monday.
“We’re encouraged to see early signs of seller enthusiasm,” said Kath Hammerseng, the association’s president and an area sales agent.
That increase comes at a time when house closings are falling, in part because a shortage of listings is stifling sales. Buyers, especially first-timers, just don’t have enough options. At the end of May, there were only 10,403 houses on the market, 17.8 percent fewer than last year.
May was also the sixth consecutive month of year-over-year declines in closed sales. Last month, buyers closed on 5,739 homes, an 11.3 percent annual decrease. Pending sales, an indication of future closings and a sign of how many deals were signed during the month, were also down.
The shortage of listings has been a long-term problem for the market. So far this year there have been 19,949 sales, about 7 percent fewer than the previous year.
The same trends are playing out across the country. Existing home sales nationwide during April, the latest data available, were down 1.4 percent compared to a year ago and have fallen year-over-year for two straight months, according to the National Association of Realtors. All four major geographic regions saw declines in sales activity.
In a statement, Lawrence Yun, chief economist of the national association, attributed the declines to low inventory. “The root cause of the underperforming sales activity in much of the country so far this year continues to be the utter lack of available listings on the market,” he said.
The median sale price nationwide during April was $257,900, a 5.3 percent compared with April 2017, marking the 74th straight month of year-over-year gains.
While the increase in listings and the decline in sales are welcome news for buyers frustrated by a lack of options in the Twin Cities and beyond, there’s still a maddening mismatch between buyers and sellers in certain price ranges and in many parts of the metro.
That’s especially true for entry-level houses in the Twin Cities and inner-ring suburbs. The least-expensive houses are the most difficult to find. While there are enough houses on the market to last 2.1 months at the current sales pace, the supply pressures increase twofold for houses priced at less than $250,000. Move-up houses, or those priced at more than $500,000 are much more widely available, especially in the outer-ring suburbs.
Across the metro region, houses are selling quickly and for close to or above list price. Last month, sellers received on average 100.2 percent of their list price, a record high for any month and the first time this measure exceeded 100 percent.
Those offers are putting upward pressure on prices. The median price of all closings during the month was $271,000, a record high and an 8.4 percent over last year.
“Rising listing activity could soon turn the inventory tide,” Todd Urbanski, president-elect of the local Realtors association. “In the meantime, sellers can remain confident that well-presented properties are very much in demand.”