DULUTH – This fall's red-hot housing market has more than made up for time lost to the pandemic this spring.
Through October, closed sales in the Duluth area are up 10% over 2019 and are on track to eclipse last year's total, according to recently released data from Lake Superior Area Realtors. That's despite a slow start as buyers and sellers were hesitant to hit the market as COVID-19 first started to spread in March and April.
"The year is ending strong," said Shaina Nickila, president of the board for Lake Superior Area Realtors. "The busy season has been delayed, and a closings are happening when usually it's really quiet."
Around Duluth, the median sale price also hit an all-time high in October — $210,000 — as the inventory of homes for sale reached an unprecedented low. That's up $5,000 from September's record median price and up more than 13% from a year ago.
If more homes don't hit the market and current demand keeps up, it would take less than three months for every property to be sold, data shows.
"We're still experiencing some of the same effects from that with multiple offers and some going over asking," Nickila said.
In a typical year — every year for more than a decade — closed sales and prices start to fall in autumn as activity is slowed by the start of the school year and encroaching cold weather. Not so this year.
In October closed sales actually increased over September and were up nearly 33% over October 2019. That's despite fewer houses being put on the market. In Duluth city limits there have been 63 fewer listings but 59 more sales this year compared to 2019.
The same is true on the other side of the border. In the Superior area, low inventory has not stopped sales from increasing over 2019, according to Lake Superior Area Realtors, and prices rose 10% to a median sale price of $165,000 in October.
Pending sales did start to drop in the region in October, suggesting normal market forces — such as not wanting to move in the winter — could still affect homebuying heading into the end of the year.
But given the shortage of homes for sale and unrelenting interest from buyers, Nickila said she expects the busy market to continue.
"If you see what you want you have to jump on it, even in January," she said. "Buyers are going to move in the winter if they see the house they're looking for. And rates are still so incredibly low."
Low interest rates on mortgages have helped buffer the rise in prices — buyers can afford more with smaller monthly payments — and are expected to remain historically low well into next year.
Greater Minnesota has been especially attractive to buyers this year as work-from-home options become permanent and low interest rates boost the ability to finance second homes. The increase in closed sales in northeastern Minnesota even eclipsed the fast-moving Twin Cities market in October.
"COVID-19 has reshaped the housing market," Chris Galler, CEO of Minnesota Association of Realtors, said in a statement. "Space inside and outside the home to work, educate, exercise and entertain are all significant considerations for home buyers. Home buyers want more space for these priorities, and they are willing to pay for it."