St. Cloud homes shortage stretches into the fall

ST. CLOUD – In the St. Cloud area, houses sold in half the time they did last September — and at a higher cost — despite the anticipated slowdown that comes with the season change.

The average days on the market declined 48% year-over-year in September for the St. Cloud area, which includes St. Cloud, Waite Park, St. Joseph, Sartell and Sauk Rapids, according to the St. Cloud Area Association of Realtors.

The St. Cloud area saw a 2.2% year-over-year increase, bringing the median sales price to $235,000 in September. Central Minnesota saw a 14.8% increase to a record $310,000 in September. Statewide, the median sales price was $310,000, also a record.

"We're maybe seeing two, three offers on a property vs. the five, six, seven in the summer months. But there's still pent-up demand for homes. Buyers are still being aggressive," said Ryan Mortensen, branch vice president for Coldwell Banker Realty in St. Cloud. "Like summer, sellers want to sell their house but then again, where do they go? Because then they'll be a buyer and they'll be in that same spot as everybody else."

Supply remains tight — at 1.5 months in central Minnesota, and 1.3 months in St. Cloud, significantly lower than the four- to six-month range of a balanced market.

"The biggest surprise really is the lack of inventory statewide," said Chris Galler, chief executive of Minnesota Realtors, of the 1.6 month supply statewide. "A lot of times we'd see inventories get low in the past in the fertile crescent — St. Cloud, the Twin Cities, Rochester. We're seeing it everywhere. In rural areas where there would typically be a six-month supply or maybe an eight-month supply, they're down to a two-month supply. We really need that to balance out statewide."

Autumn typically brings a drop in the number of closed sales on residential homes. But central Minnesota saw the smallest decrease of any region in the state, which an expert attributes to the region's strong economy and the prevalence of young families looking to purchase homes.

"Because last [September] was such a strong month, we assumed this month we were going to feel it. That's not unusual," Galler said. "In central Minnesota last year, we were up about 25% [in closed sales] from the year before so we're just seeing a little bit of a decline."

The decrease in closed sales corresponds with a decline in new listings and pending sales: Statewide, new listings are down 8.5% and pending sales are down 15.3% year-over-year.

Mortensen attributes some of the increased interest in central Minnesota to more employees working from home.

"A lot of them didn't need to be in the cities or the suburbs. They could be a little farther out with a little bit more room, a little bit more acreage or maybe on a lake," he said.

The pandemic-related trends could continue long after the pandemic subsides, experts say.