ST. CLOUD – Prospective buyers looking to get a new house in May — historically one of the busier months for home sales — had only 148 homes to choose from in the St. Cloud metro.
That's fewer than half the homes available in May 2020, according to data from the St. Cloud Area Association of Realtors.
And in the St. Cloud area — which includes St. Cloud, Waite Park, St. Joseph, Sartell and Sauk Rapids — the average time a house spent on the market before being scooped up was just 20 days in May, down 51% from May 2020.
It's also more than a week shorter than the state average of 29 days, which is down 37% from last May and is a historic low, according to Minnesota Realtors, a membership organization supporting all 22,000 Realtors in the state.
The median price for homes statewide also increased to $310,000 in May — an all-time high for sales price and high-water mark for the year-over-year percentage increase of nearly 16%.
The central Minnesota counties of Stearns, Benton, Sherburne and Wright also set a record with $300,000 as the median sales price in May.
"We just don't have enough properties in any part of the state, which is the real surprising part. But [the St. Cloud area] is really being hit by it, which is why we're seeing the percent of original list price received over 100%," said Chris Galler, chief executive of Minnesota Realtors.
"Homes are selling for more than what they're listed for because we're having so many multiple-offer situations," he said. "And that, of course, drives up the price in the central region. It's up 17.5% for the month of May. I don't think incomes were keeping up at 17.5% so it becomes a long-term problem for us."
Across the state, the total month's supply of inventory remained historically low at 1.1, down nearly 58% from last year. In central Minnesota, there's only one month of inventory, down 63% from last year.
"In order to satisfy the number of consumers that are purchasing, there is basically one month's worth of homes available for them to purchase, which means they have basically no selection whatsoever," Galler said. "It's sort of like toilet paper during the pandemic. All of a sudden, there just isn't any and you're having to hunt like crazy."
A balanced market, Galler said, has between four and five months of available inventory.
Galler attributes some of the St. Cloud-area's inventory shortage to lingering effects from the Great Recession.
"The St. Cloud area got hit pretty hard because there were a lot of new construction developments going on in the area and that ended up having an impact longer term, in that developers had to use up that inventory. And they have used it up," he said. "But now there's risk potentially — developers are looking and going, I don't want to get burned again."
There's no quick fix, as the permitting process and planning for new developments often takes more than a year, and building costs have skyrocketed in recent months.
"Wood was up 287% and builders are having a difficult time pricing up properties when they're going to be built over a three- or four-month period and prices are going up at rates they've never seen or experienced," Galler said.
Experts don't anticipate the problem going away anytime soon.
"I haven't heard any surge of inventory coming, mostly because of the concerns related to finding a home," Galler said. "To put your house on the marketplace, you're going to have to be able to find a home and know where you're going to move — and that's been a problem."
Jenny Berg • 612-673-7299