I hope you had a wonderful summer and were able to make some great memories! As the summer real estate season comes to an end, I wanted to give you a recap of what we’re seeing locally and what it means for home values.

Sales Are Down

Last summer, as mortgage rates rapidly increased, the number of closed home sales in the Twin Cities fell by 19% year over year. That trend has continued into this year, with annualized sales down nearly 14% from the start of 2023. We haven’t seen the number of closed sales this low since June of 2012.

Supply Is Tight

The mortgage rate increases slowed buyer activity dramatically; however, seller activity slowed at roughly the same rate. There is still more buyer demand than there are houses available for sale, which means multiple offers and waived contingencies as we’ve seen over the last few years.

Not all houses are seeing multiple offers, however. The average listing is on the market for 39 days, with only half selling in 19 days or less (median) – a year-over-year increase of 44% and 58%, respectively. Location, condition, and price are huge factors in today’s market. We consider a market “balanced” when the supply of homes for sale is between four-and-six months. There is currently a 1.8-month supply (up from a low of 1.2-months), which is still considered a seller’s market. For reference, on July 31st, the annualized number of new listings was 59,648; in January 2008, that number was 106,580, which equated to a 9.1-month supply – to later peak in August 2008 at 10-months.

Supply Caveats

While overall supply is low, certain segments of the market have been impacted disproportionately. For example, there is a 6.4-month supply of new construction homes over $410,000, which means that segment of the market has inched into a buyer’s market. Believe it or not, new construction condos in all price ranges are at an 18.3-month supply – a very very strong buyer’s market!

Values Holding Strong

With supply low when compared to demand, the annualized median sales price in the Twin Cities is at $364,894 as of July – its highest point was $365,000 in January of this year.

Please let me know if you or any of your friends/family are considering a move or real estate investment. I’ll make sure they’re positioned to take advantage of all the opportunities (yes, there still are some!) and tactics that work right now, in today’s market!

Take care,

Jonathan Lindstrom