By virtually every measure May was a record-setting month for Twin Cities home sales, but there's at least one indication that an ever-so-slight seasonal slowdown might be in the offing: an uptick in price cuts.

During May, buyers signed 6,834 purchase agreements in the Twin Cities metro area, according to a monthly report from the Minneapolis Area Realtors (MAR). That was a nearly 16% increase over last year, when the pandemic caused a double-digit decline in pending sales, but only a 1% increase compared with a more typical 2019. The median price of all closings during the month was $342,500, a record high and a 16% gain over last year.

May closings, a reflection of deals signed during the previous couple of months, were up 15% over last year but down 9% compared with 2019. Agents say sales, especially properties that are affordable to entry-level and downsizing buyers, have been stifled in recent years by a lack of properties on the market. And that's put buyers on the defense all spring.

"It's a terrible time to buy, but we weren't going to wait and 'time the market,'" said Alex Bauman of Minneapolis. "We needed a place to live now, not whenever the market cools off."

When Bauman and Kelsey Devine started shopping for their first house earlier this year, they knew it would be a battle.

"The sellers held all of the cards," he said.

During May, sellers listed 7,576 homes, up just slightly from last year when would-be sellers retreated during the pandemic, causing a 22% decline in listings compared with 2019.

The lease on Bauman and Devine's apartment was ending and, like many buyers, they were eager to tap low mortgage rates. Their agent warned that they'd likely have to offer more than the list price, make an offer free of as many contingencies as possible and might get outbid multiple times.

So when they looked at a stucco bungalow in northeast Minneapolis that had just come on the market, they immediately made the best offer they could.

"I didn't want to waste any time because it was the neighborhood we wanted to be in," Devine said.

Like at least half of all buyers this spring, the couple had to pay more than the sellers were asking.

"I felt like we needed to make decisions faster than we could really process what we were doing," she said. "When putting together our offer we had to try and balance going far enough above the asking price to beat out other potential buyers, but not too high because we had to worry about the appraisal."

The weren't the only bidders, nor was their offer the highest. Another buyer offered more, but the seller chose their offer because they, like many buyers today, waived the inspection contingency.

Bauman said that while they love the house and feel fortunate to be finished with the house hunt, he isn't without concern that at some point demand could slow and prices could ease or even tumble.

"Every time I look at the numbers I worry about the huge investment we've made and whether or not we'll get a return on that investment," he said.

Across the Twin Cities, sales gains varied dramatically by property type, according to the MAR report. In Minneapolis, single-family home sales increased 42% compared with a 15% increase in St. Paul. And condominiums, which were particularly difficult to sell during the pandemic, increased 98% throughout the 13-county metro area.

The imbalance between buyers and sellers has only gotten more pronounced. By the end of May there were only 5,687 houses for sale, 47% fewer than last year at the same time.

So far, with more than half of all homes in the Twin Cities selling within a week of listing, there's little evidence of a downturn. So far.

Across the country, signs are emerging that point to a possible slowdown in the market. A Zillow market report released Wednesday shows that the share of listings with a price cut in the Twin Cities metro area grew from 6.2% in April to 7.1% in May. That's the first time that stat has grown since November. Still, it's considerably lower than it was last May, when 12.9% of listings had cut their price.

Redfin, another national real estate website, said this week 61.1% of Redfin home offers in the Twin Cities during May faced competition. That's down from nearly 70% in April.

Sheharyar Bokhari, a senior economist with Redfin, said such subtle shifts are likely a sign of normal seasonal changes. He said April is normally the peak of the market in the Twin Cities, but because the pandemic upended the typical sales cycles in most major metro areas over the past year, it's been challenging for him and other economists to predict what will happen next.

"We're starting to see some sense of normalcy in some markets," he said. "But we don't quite know if it'll shape up the same way this year."