Prices dip for first time since 2012 but sellers still receive over asking price

NEWS RELEASE

The median sales price was down 0.7 percent to $367,500
The average market time was up 60.7 percent to 45 days
New listings down 27.9 percent; pending sales down 28.8 percent

(May 17, 2023) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, home prices dipped slightly from last April. Both buyer and seller activity were also lower compared to last year.

Sales & Listings

Prices were flat in March and down less than 1.0 percent in April. Despite a slight softening in prices, sellers were still getting offers above their list price, on average (100.1 percent) despite a 28.8 percent decline in sales. These two dynamics seem to portray conflicting pictures. While still present, bidding wars this year haven’t been as extreme as they have over the last couple years. Luxury market activity also cooled slightly more than the rest of the market—though it’s too early to label this a trend. Townhomes tend to sell for about 25.0 percent less than single family homes and made up the largest share of overall closed sales since 2006. This is mostly due to sales in other segments cooling faster than townhomes, but still impacts overall prices.

Home prices are up 28.1 percent since March 2020 but down 0.7 percent from April 2022. “Homeowners sometimes panic when prices soften while buyers often rejoice,” said Jerry Moscowitz, President of Minneapolis Area REALTORS®. “But it’s important to remember that it simply reflects the cross section of homes selling and doesn’t necessarily affect your home’s value. That’s why home buyers should have at least a 5-7 year timeframe.” Sellers are also still getting solid offers in a reasonable timeframe. Some buyers are choosing smaller homes with fewer bedrooms to contain their monthly mortgage payments. At a median of 17 days, homes are still selling as quickly as they did in April 2020. There are just fewer of those sales. But there are also fewer listings. Both supply and demand downshifting together means the balance between buyer and seller activity remains tight as the market remains undersupplied.

Listings and Inventory

In April, sellers brought 5,170 new listings online or 27.9 percent fewer than last year. Inventory levels trickled 4.5 percent lower. Some sellers are choosing to stay put and wait instead of selling for a lower price. Most sellers are also buyers and higher mortgage rates have harmed affordability significantly. “Make no mistake: multiple offers are still happening, and some properties are selling in a few days or less for well over asking,” said Brianne Lawrence, President of the Saint Paul Area Association of REALTORS®. “But this new environment means buyers are being more selective and budget minded.”

The Twin Cities metro is still a seller’s market, just not to the same degree as last year. April’s months supply of inventory was up an even 25.0 percent. That meant we had 1.5 months’ supply of inventory at month-end. Typically 4-6 months of supply are needed to reach a balanced, neutral market.

Location & Property Type

Market activity varies by area, price point and property type. New home sales rose 20.0 percent while existing home sales were down 32.9 percent. Single family sales fell 31.5 percent, condo sales declined 36.1 percent and townhome sales were down 14.4 percent. Sales in Minneapolis decreased 36.4 percent while Saint Paul sales fell 28.6 percent. Cities like North Branch, White Bear Township, Watertown and Mahtomedi saw the largest sales gains while Carver, New Brighton, North St. Paul, Hugo and Lake Elmo all had notably lower demand than last year.

For more information on weekly and monthly housing numbers visit www.mplsrealtor.com or www.spaar.com

April 2022 Housing Takeaways (compared to a year ago)

Sellers listed 5,170 properties on the market, a 27.9 percent decrease from last April
Buyers signed 4,029 purchase agreements, down 28.8 percent (3,263 closed sales, down 32.2 percent)
Inventory levels shrank 4.5 percent to 6,155 units
Month’s Supply of Inventory rose 25.0 percent to 1.5 months (4-6 months is balanced)
The Median Sales Price slipped 0.7 percent to $367,500
Days on Market rose 60.7 percent to 45 days, on average (median of 17 days, up 112.5 percent)
Changes in Sales activity varied by market segment
- Single family sales decreased 31.5 percent; Condo sales were down 36.1 percent & townhouse sales fell 14.4 percent
- Traditional sales declined 29.1 percent; foreclosure sales rose 5.9 percent; short sales increased 100.0 percent (3 to 6)
- Previously owned sales decreased 32.9 percent; new construction sales rose 20.0 percent

All information is according to the Minneapolis Area REALTORS® and Saint Paul Area Association of REALTORS based on data from NorthstarMLS. Data are deemed reliable, but not guaranteed. We serve the Twin Cities 16-county metro area and western Wisconsin.