After months of shopping and an unsuccessful bid, Kate and Matt Shalbrack finally prevailed with their offer on a tidy stucco house in Roseville late last year.
"It was an incredible moment," said Kate Shalbrack, recalling the night their above list-price offer had been accepted.
For the Shalbracks and other first-time buyers, former renters and downsizing baby boomers in the Twin Cities metro area, 2018 was one of the worst on record. They battled over a paltry number of houses last year, driving the median sale price to a record $265,000, according to year-end data from the Minneapolis Area Realtors (MAR).
Even a late-season swell of fresh listings wasn't enough to relieve the pressure. The least-expensive houses in the Twin Cities sold on average in about 30 days, about four times faster than move-up homes, pushing an untold number of would-be buyers to the sidelines.
Higher prices and a shortage of listings affordable to entry-level buyers stifled sales. Throughout 2018 there were about 2,000 fewer closings than the year before.
"The market is changing," said Nick George, the Keller Williams agent who helped the Shalbracks find their Roseville house. "It's just the natural fluctuation in the market, it's more of a leveling. Instead of getting seven offers you might get two, or maybe one."
Even though there was a 5 percent increase in listings during the year, there were far more entry-level buyers than sellers. On average, those who sold last year received nearly their full asking price, especially in urban neighborhoods where demand has been the most intense.
Price pressure and a shortage of listings pushed buyers to the inner-ring suburbs and a handful of exurbs, making them the hottest housing markets in the metro last year, according to the Star Tribune's third annual Hot Housing Index, which ranks communities based on where houses sold more quickly than the year before, where prices posted the biggest gains and where sellers received closest to their asking price. A handful of exurbs, including Otsego, soared to the top of the list because of a spike in housing construction last year. But working-class suburbs like Crystal, St. Anthony and Richfield, where houses are modest and close to the central cities, dominated.