For the housing market in the Twin Cities, fall is looking a lot like spring.
Last month buyers signed 6,443 purchase agreements in the 16-county metro area, about 28% more than last year and the most in nearly two decades, according to a monthly sales report from the Minneapolis Area Realtors and the St. Paul Area Association of Realtors.
Sellers were unusually active, as well. During the month there were 7,771 new listings, a nearly 10% increase over last year and the most for any September since 2008.
"The demand out there in the market at this time of year is truly remarkable — especially during a pandemic," Linda Rogers, president of the Minneapolis Area Realtors, said in a news release.
At a time when buying and selling typically slow, both are on the rise in large part because of record low mortgage rates. On Thursday, Freddie Mac said the average 30-year fixed-rate mortgage fell to 2.81%, the 10th record low for the year.
Buyers were more than eager to take advantage of low rates, outpacing sellers in some parts of the metro. Houses sold in near-record time, pushing prices to new highs.
The median price of all closings during the month was $310,000, nearly 11% higher than last year and the largest year-over-year gain since February 2018. On average those sellers got more than 100.5% of their original asking price — the highest average for any month going back to at least 2003.
While those low rates boost buying power, they also motivated buyers to bid high and quickly.
The median market time was 37 days, 32% faster than last year with half of all sales happening in less than 15 days. The market is considered balanced between buyers and sellers when there's a five- to six-month supply of house listings.
Seller activity — while still lagging — made its largest gain since March. But with buyers outpacing sellers in some parts of the metro, there were 32% fewer total listings on the market at the end of the month compared with last year.
"Even though seller activity is on the rise, inventory levels remain extremely low, particularly in the affordable ranges," Rogers said. "Serious buyers should be prepared to write strong offers quickly."
Though the market as a whole is chugging along at breakneck speed, there were broad variations in supply and demand by geography and property type.
In general, demand outpaced the supply of entry-level urban houses, while there was a much better balance between buyers and sellers of houses that are affordable to move-up buyers. In Minneapolis, new listings were up 48% and sales increased 41%; in St. Paul listings rose 18% with sales rising 34%. And the condo market in Minneapolis, which has been affected by rising crime and the COVID-19 pandemic, saw listings increase and sales decline slightly compared with last year.
"Even though activity is strong overall, every city, neighborhood, price range and property type are unique," Patrick Ruble, president of the St. Paul Area Association of Realtors, said in a statement.