There were more buyers than sellers in many parts of the Twin Cities last month, boosting prices and closings in what’s been the best fall market in a decade.
During September, there were 5,114 home sales with a median sale price of $222,000 in the 13-county metro area, according to data released Tuesday by the Minneapolis Area Association of Realtors. That was a 12 percent increase in sales and a 8.3 percent increase in prices compared with last September.
The market was strong all through the spring and summer and near-perfect weather for house shopping kept it that way as fall arrived.
“The warm season and good rates continue to keep the market active,” said Kevin Sharkey, president/owner of Better Homes and Gardens Real Estate All Seasons in Chanhassen.
With sales outpacing listings in some areas and fewer new listings compared with last year, it is still a seller’s market.
During September, there were 6,355 new listings, a 6.9 percent decline compared with last year. That caused total listings at the end of the month to fall 16 percent to 15,928.
Tom Wiener, a sales agent with Cardinal Realty in Oakdale, said agents in his office saw an unusual slight uptick recently in first-time buyers. He attributes that to growing confidence in the jobs market and the threat of higher home prices down the road. “And maybe there’s a bit of fear of interest rates going up,” said Weiner, who is also president of the St. Paul Area Association of Realtors.
For now, mortgage rates have been extremely favorable to home buyers. So far this fall, mortgage rates have been much lower than expected.
During the last full week of September, the 30-year fixed-rate mortgage averaged 3.86 percent, according to a weekly survey by Freddie Mac. That’s down from 3.91 percent a week earlier and 4.20 percent a year ago.
Sharkey said entry-level houses sold especially well during September. There was a more than 20 percent increase in sales of houses priced from $250,000 to $400,000 compared with last year. Sales of houses priced at less than $130,000, however, declined mostly because there was a lack of homes for sale in that price range.
“That’s going to make it tough for rehabbers to find houses to flip,” Sharkey said.
Though sales have been strong compared with last year, closings have been slipping month by month as the market heads toward winter. In August, there were 5,836 closings, down from 6,363 in July.
“This decrease is part of normal market seasonality,” said Herb Tousley, director of real estate programs at the University of St. Thomas.
Still, with prospective sellers waiting for higher home prices, and more options for those who want to trade up to a more expensive house, the number of houses on the market has remained historically low. And with houses selling at a stronger pace than last year, buyers are bracing for higher prices and fewer options.
Last month, there were 4,624 pending sales — the highest number since 2005.
“The momentum in both closed sales and pendings certainly bodes well for the fourth quarter,” Wiener said. “And for a strong finish to 2015.”