Second home buyers and people who are embracing their ability to work remotely are helping fuel double-digit gains in home sales in outstate Minnesota.
That's according to a January report from Minnesota Realtors (MNR), which said there were 4,788 home sales across the state last month, a 16% increase over last year. Those figures include the seven-county Twin Cities metro, which saw a nearly 14% increase in sales. That gain, however, was outpaced by much of northern Minnesota.
"January was still very much a seller's market," said Chris Galler, chief executive of MNR, which represents the state's 21,000 Realtors. "Heightened demand was met with a decline in new listings, exacerbating the impact of historically low inventory in a market where consumers are primed to buy."
During January, 11 out of the 13 economic development regions posted double-digit annual increases in closings with the Northwest region posting the biggest gain (40%). The Southeast and West Central regions showed the smallest increases — 6% and nearly 4%, respectively.
Galler notes that those closings were for deals that were signed mostly during the last quarter of last year — a sign that buyers were shopping at a time when the outstate market normally slows.
"With the shifts in lifestyle and working habits brought on by the pandemic, people are hungry for space," he said. As long as interest rates remain low, this trend is likely to continue."
The shortage of listings that's plagued the Twin Cities metro is also a problem in outstate Minnesota. At the current sales pace there were only enough listings to last one month, a 12% decline compared with last year.
In many parts of the state, especially in northern Minnesota, buyers outpaced sellers. During January there were 12% fewer new listings than the year before, causing the number of active listings at the end of the month to fall by nearly half.
That dearth of options forced buyers to make aggressive offers, quickly pushing the median price of all closings up nearly 11%, to $272,000.
On average, sellers got more than 98% of their asking price, a slight increase over last year. Homes sold quickly, as well. On average houses sold in 46 days, two weeks faster than they did in January 2020.
"A listing shortage has been the story for the past few years," said Dave Gooden, co-founder and CEO of Lakeplace.com, "but it's even more severe this year."
His website has 7,000 active lakeshore listings in Minnesota and Wisconsin compared with 15,000 to 20,000 listings during a "normal" February. And website traffic is up 53%.
Gooden said many factors are driving sales, including "quarantine fatigue" and the ability to work remotely. "We know this because buyers are now asking us about internet speeds as often as they're asking about sandy shoreline," he said. "The good news is a lot of areas now have fiber internet available for those able to work from the cabin."
Jim Buchta • 612-673-7376