The leaves are falling and home sales in the Twin Cities are cooling, but there are still far more buyers on the hunt than last year at this time.
During September, there were 5,529 home sales in the Twin Cities metro, a 5.7 percent increase from a year ago, the Minneapolis Area Association of Realtors said Friday. Prices were also higher, up 3.6 percent from a year ago, and houses sold far more quickly.
“It’s a competitive time for buyers right now,” said Michael Hartung, a sales agent with Exit Realty Metro in Minneapolis. “Buyers keep coming at me, so I feel buyer traffic is pretty steady, but I’ve talked with a couple sellers who are ready to sell, but they want to wait until spring.”
The association’s data also showed the market has begun its normal seasonal slowdown. September sales volume was 14 percent lower than August and the median price of those sales was down 3 percent from August.
Hartung said that last month he received offers on two of his listings about 45 days after of putting them on the market, and he received a significant number of showings. In the case of a one-bedroom house in Brooklyn Center that was being brought to market for the first time in several decades, he had to offer a price reduction before getting an offer, but generally houses are selling close to the asking price.
Still, the strongest demand, he and other agents said, is for those entry-level houses, which has put sellers in control in the lowest price ranges. During the past 12 months, the strongest demand has been in the $190,000 to $250,000 range, followed by houses priced from $250,000 to $350,000. Generally, the more expensive the listing the longer it takes to sell, making many upper-bracket sellers feel like they are living in a buyer’s market.
Houses last month sold on average in 56 days, a 13.8 percent decline from last year and only two days away from the record low set in 2007. On average, buyers received 97.5 percent of their original list price when the house sold — the highest figure for any September since 2005. And with new listings down considerably compared with last year, at the current sales pace there are only enough listings to last 2.8 months, the lowest September figure since early 2003. Generally, five to six months of supply is considered a balanced market.
The association said condo and townhouse sales posted the biggest year-over-year increase in sales.
Prime buying conditions
Buying conditions in the Twin Cities have been prime. Mortgage rates have been hovering near all-time lows and job growth has been strong. But a shortage of listings has stifled sales, which hit a record level during June, and is putting upward pressure on prices. Pending sales, an indication of future closings, were flat last month.
“Despite some low inventory challenges, this market is on solid footing. In some ways, we’re in a classic chicken or egg dilemma,” said Cotty Lowry, president-elect of the association. “Which comes first? More listing activity or more inventory? Today’s sellers are skittish because it’s tough to find their next place. To break this cycle, sellers will need to list in higher numbers and move up the housing chain.”