Houses in the St. Cloud area are selling faster and for more money than a year ago — creating a strong market for sellers, if they are willing to put their home on the market.
The median sales price in the St. Cloud area — covering the cities of St. Cloud, Waite Park, St. Joseph, Sartell and Sauk Rapids — was $205,000 last month, an 11% increase over February 2020.
And closed sales for the month jumped nearly 20% even as the number of homes for sale plummeted by 60%, according to data from the St. Cloud Area Association of Realtors.
"There's [less than] half the homes for sale, which produces a higher successful closing of homes," said Nancy Costanzo, president of the association and agent with Premier Real Estate Services. "Transactions are completing; you're not having deals falling through."
Homes are selling about one week faster than last year, with the average days on market down 9%.
But the imbalance is complicating the market as potential sellers are hesitant to put their home on the market because they need a place to live after their house sells.
"We can guarantee just about anybody that puts their house on the market, it's going to sell," Costanzo said. "So Realtors in general are almost to the point of begging people — there are like eight buyers for your house; can you put it on the market?"
The competitive market and low inventory reflects trends across the state, where new listings are declining and buyer demand is on the rise and pushing up prices: The Twin Cities metro and Duluth area saw about 43% fewer properties for sale year-over-year in January.
"I would say it's really supply and demand. There's a large demand with very, very low supply," Costanzo said. "Is COVID the reason? No. Has COVID contributed to it? I would say absolutely. For multiple reasons, though."
The pandemic hampered production of housing materials such as lumber, siding and appliances, which is affecting new construction.
"Building prices have gone up and it's kind of expensive so people who are looking to build a house are just hanging tight for now. If prices weren't so high, they probably would have built and then sold their house," said Kelly Travis, executive director of the St. Cloud Area Association of Realtors. "That's the cycle but it's been put on hold a bit."
Add to that the prospective sellers who aren't going to put their home on the market until they have the perfect or ideal home to buy and the imbalance continues.
"They're not going to sell their home if they don't have one [to buy] but then that limits them when there's not a lot of inventory," Travis said.
The pandemic has led to an increased demand, in part, due to the increase in remote work, which will likely continue even after it's safe to return to the office.
"Since they can work from home, [people] feel like they can move to wherever they want to move to because they don't have to drive to an office every day," Travis said.
Agents are happy that sellers are getting good money for their homes, but they are also hoping the market improves for buyers, Costanzo said.
"We're looking for a balance, I guess," she said. "Right now the scales are a little uneven — they're quite uneven — so we're looking forward to a balance."
Jenny Berg • 612-673-7299