While a slowdown in the market is not unusual at summer’s end, the reason for this year’s lighter sales activity is somewhat unusual. Home sales in August lagged behind the previous year primarily due to the shortage of homes available for sale, according to new data from the Minneapolis Area Association of REALTORS® (MAAR).
Key insights
(All comparisons are year-over-year)
- Median sales price: +6.8% — $252,000
- Average days on market: -14.3% — 48
- New listings: +.7%
- Number of homes for sale: -16.7%
- Pending sales (signed purchase agreements): -2.6%
Economic check up
- Minneapolis-St. Paul area unemployment rate: 3.3 percent (4.3 percent nationally).
- Average 30-year mortgage rates have stayed near 4 percent.
- A strong local economy is encouraging for homeownership, but wages may not keep pace with increasing home values and interest rates, according to MAAR.
Starter homes are in high demand
Homebuyers looking for homes under $200,000 are experiencing the tightest market right now. High demand on these properties causes fast sales and bidding wars on starter homes.
- Listings priced $150,000 – $190,000 have just 1.4 months’ supply of inventory.
- Turnkey homes are in the highest demand.
- Falling distressed listings affect this price range most strongly.
- Rent prices are also rising around the metro, with a 3.1 percent increase over last year at the end of July.
New construction may help certain buyers
One way buyers can get into a home without fighting for limited inventory is new construction.
- Building new can help alleviate the stress of bidding wars and tight inventory.
- New construction homes built today cost less than they did 10 years ago.
- While it may take a little longer than buying an existing home, a new build may not take as long as you think.
- You’ll be in control of features and finishes, so moving in won’t also be a race to paint and re-decorate the whole home.
Curious about building? The Parade of Homes runs through Oct. 1. Visit new construction homes and models and learn about trends in home building. Before you head out on your tour, search new construction properties on edinarealty.com.
Buyers are looking for homes like yours. Get tips, checklists and insider secrets to selling your home with the Ultimate Guide to Selling Your Home.