January started off strong for the housing market, with healthy buyer demand and strong market fundamentals. A robust increase in housing starts in December points to an active year for new construction, but higher material costs, especially lumber, and a limited supply of buildable lots will temper the number of new units.
New Listings in the Twin Cities region decreased 8.8 percent to 3,989. Pending Sales were up 5.6 percent to 3,519. Inventory levels fell 42.6 percent to 4,823 units.
Prices continued to gain traction. The Median Sales Price increased 11.5 percent to $301,000. Days on Market was down 37.3 percent to 42 days. Sellers were encouraged as Months Supply of Homes for Sale was down 47.1 percent to 0.9 months.
The Mortgage Bankers Association’s January research estimates approximately 2.7 million homeowners with mortgages are currently in forbearance plans. Some of these homes may eventually come to market, but given the strong appreciation in most market segments in recent years, these eventual home sales are likely to be mostly traditional sellers. However, a modest increase in short sales and foreclosures at some point this year would not be surprising.
– SAINT PAUL AREA ASSOCIATION OF REALTORS®