In the Twin Cities area, the only thing crazier than the housing market is the weather! Despite the cooler than usual temperatures and snow-covered ground, the spring real estate market has taken off in the past few weeks. Now that spring weather has arrived, we should see a continued increase in real estate listings and sales.
Once again, the market is in short supply of listings with an overabundance of buyer demand. This has been true for the past few years: since 2013 the real estate market has been mired in a low listing inventory market. Listing supply has consistently trended downward in recent years which has capped sales activity. While the market is very active, you can see the effect of lower inventory below. Fewer listings equate to less sales and higher prices.
Below is a look at a few statistics comparing March 2018 to March 2017:
- Sellers listed 6,737 properties on the market, a 17.5 percent decrease
- Buyers closed on 3,978 homes, a 10.3 percent decrease
- Listing Inventory for March fell to 8,289 units, a 26.1 percent decrease compared to 2017
- Month’s Supply of Inventory was down 22.7 percent to 1.7 months
- The Median Sales Price rose 9.8 percent to $258,000, a record high for March
- Cumulative Days on Market declined 21.9 percent to 57 days, on average (median of 22)
- Changes in Sales activity varied by market segment
The two stats that catch my attention most are new listings (down 17.5 percent) and listing inventory (down 26.1 percent)! In some segments, the result has been an increasingly hyper-competitive market for buyers where multiple offers and over list price offers have become a norm instead of an exception. We are seeing creative, and somewhat questionable, tactics to give buyers an edge in securing an accepted offer. Some examples include escalation clauses, waiver of home inspections and buyers making offers without physically seeing the property. We do not condone many of these tactics due to the inherent risks to our clients, but it’s good to know what’s happening in the market.
Now is a fantastic time to sell a home, particularly in the more modest price ranges. Conversely, buying in that segment can be extremely challenging. As I have stated too many times to remember, the antidote for this listing shortage is more listings, but many potential sellers hesitate to list their home without first securing a next place to live. Thus, the cycle continues.
I will be closely monitoring the listing numbers over the next few months. Anecdotally I have been hearing that many sellers are waiting for warmer weather and green grass before putting their home on the market. Stay tuned!
Andy Fazendin – Owner/Broker