There’s no need to tell Anita Rockwell the housing market is hot.
Twice within a week the Twin Cities home stager had jobs cancel because the houses sold before her company, StageWorks, had a chance to start the staging process. The first was a custom multilevel house in St. Paul. The other was a $750,000 house near Lake of the Isles.
“A neighbor heard they would be listing and approached them and negotiated to buy,” Rockwell said. “We need more sellers!”
It was better to be a home seller than a buyer in the Twin Cities metro last month, as houses sold in near-record time and prices inched closer to all-time highs. During April, there were 5,128 closed sales, a 6.1 percent increase compared with last year, according to a monthly report from the Minneapolis Area Association of Realtors (MAAR).
Meanwhile, the group said there were just 12,849 listings on the market at the end of the month, a nearly 20 percent decline compared with last year. That imbalance meant sellers usually got close to their asking price. The median price of all closings last month was up 7.7 percent to $231,500.
By nearly every measure, the housing market in the Twin Cities is robust. The exception is new listings. For the second year in a row, house listings have declined, leaving buyers with few choices and the threat of formidable competition.
Though it’s a sellers’ market, many homeowners who are ready to sell, either to upsize or downsize, have been reluctant to put their house on the market for fear they won’t find one to replace it.
When Daniel and Gene Shebuski called a real estate agent to talk about selling their walkout rambler in Prior Lake, the agent advised them to list soon rather than wait. By that weekend Rockwell and her team staged the house and it went on the market the following Tuesday. By the next day they had an offer, but no place to move.
“It was a whirlwind,” said Gene Shebuski. “We didn’t think it would happen so fast.”
The Shebuskis had to scramble to find their next house, and they ended up moving in with their son until they can close on it in early June.
“Honestly, we weren’t ready and we hadn’t started looking for a home yet,” said Gene Shebuski. “We thought we’d have the logical 60 days or so to find a house.”
Across the metro, houses are selling within a couple of months. The average market time last month was 73 days, a 14.1 percent decline compared with last year and the quickest April since 2007. And at the current sales pace, there are only enough houses on the market to last 2.6 months, the lowest April figure since 2003. Generally, a market is thought to be balanced when there’s a five- to six-month supply of listings.
The situation has helped boost prices but is putting a lid on sales. During April, buyers signed 6,373 new purchase agreements, a relatively small 1.6 percent gain from April 2015 when pending sales posted a record gain. As a result, sellers were able to command a near-record 98 percent of their asking price.
The spring market in the Twin Cities has received a boost from improving fundamentals, ranging from a local unemployment rate of 4 percent — one of the lowest in the nation — to near-record low mortgage rates. Last week, Freddie Mac said the average 30-year fixed mortgage rate was 3.57 percent, the lowest in three years.
“The economy is still strengthening and the market is very competitive,” said Cotty Lowry, MAAR’s president-elect and an agent with Keller Williams. “Serious buyers must be prepared to make strong offers right away or risk not having their offer accepted.”