The market for single-family homes continues to be powered by rocket fuel.
The median sales price for April hit $337,000 – a 10.5 percent jump compared to a year ago. That price sets a new record high for the 16-county metro area.
No one would have predicted it, but the pandemic actually helped to ignite the current housing market mania. The inventory of homes for sale remains low, mortgage rates are close to historic lows at roughly 3 percent, and homes have taken on a new importance in the age of the pandemic. The Federal Reserve slashed interest rates in March 2020 when the pandemic began to take hold.
According to the latest data from the Minneapolis Area Realtors (MAR) and the St. Paul Area Association of Realtors half of the homes for sale are going under contract within eight days of being listed – the fastest time seen in at least 14 years.
Home sellers are now receiving an average of 103.5 percent of their listing price when closing a sale. That number reflects the intense competition for homes in the current market, where multiple offers have become routine. Back in April 2013, for example, sellers were getting an average of 95.9 percent of their listing price.
“It’s promising to see improvements in housing supply, but it’s clear that we aren’t out of the woods just yet,” said Todd Walker, president of MAR, in a statement. “In time, more potential sellers will be encouraged to list, enticed by rising prices and more inventory. In the meantime, developers need incentives to expand new inventory, particularly in affordable price ranges.”
Despite previously voiced fears that social unrest and the pandemic could lead to the core cities being emptied out, the numbers don’t show any evidence of such a trend. Single-family home sales were up 32 percent in Minneapolis and up 14.8 percent in St. Paul.
Sales of condos across the metro were up 50.6 percent compared to a year ago.
Sales of homes priced over $1 million are up a dizzying 180.6 percent compared to April 2020.