In the midst of the peak shopping season, houses in the Twin Cities metro sold at a record pace in June.
Both closed and pending sales reached 10-year highs and, with buyers outpacing sellers in some parts of the metro, houses on average sold in an unprecedented 66 days, according to a monthly report from the Minneapolis Area Association of Realtors.
“Buyers are very motivated right now,” said Betsy Lucas of Coldwell Banker Burnet, who was recently involved with three lightning-speed sales. “When something really fabulous comes on the market, people are ready.”
In the 13-county metro area, there were 6,928 closings in June, a 22 percent increase over last year. New listings rose only 4.6 percent, leading the total inventory of listings at the end of the month to slip 9.4 percent.
After a disappointing 2014, the recovery of the Twin Cities real estate market is back on track this year and exceeding expectations in some cases.
Mortgage rates remain near historic lows and wage growth is emboldening buyers and their pocketbooks.
“Buyers have been extraordinarily active this spring and summer,” said Mike Hoffman, Minneapolis Area Association of Realtors (MAAR) president. “Consumers, particularly first-time buyers, understand that the timing is right.”
Facing the threat of higher home prices and rising mortgage rates, buyers are far more motivated than they were last year at this time.
About one in four homes sold so far this year have received more than one offer. On average, sellers received 99.6 percent of their last list price.
While many agents say the market has returned to pre-recession conditions, home prices are still 3.5 percent shy of the June 2006 record high.
And not everything is working in favor of sellers. Low appraisals are still killing some deals, for instance, and nearly one in 10 homeowners still owed more than their house was worth last month.
As well, buyers have real-time access to sale data, so they are also keenly aware of what other buyers are paying. And with new construction on the rise in the suburbs, people with move-up houses have far more competition than in recent years.
In Scott County, where there is an abundance of inexpensive, undeveloped land and a bumper crop of houses being built, resale prices softened. In Minneapolis, St. Paul and inner-ring suburbs, however, houses in move-in condition and priced right don’t linger.
“It’s been a crazy month,” said Jennifer Lundquist of Edina Realty.
She recently listed an end-unit townhouse in Woodbury for $159,900. In just 48 hours, there were 22 showings and she had four offers in hand. It was so busy the seller and her two children had to move out during the two days.
“It was like a revolving door,” she said.
At the opposite extreme, the upper-bracket condo market has been hopping as well.
Lucas, the Coldwell Banker Burnet agent, last month sold a downtown Minneapolis condo for $1.6 million right after a brokers’ open house and before it hit the open market.
“People want what they want,” she said. “And when they see it they jump on it.”