For home sellers in the Twin Cities, November was one of the best on record by several measures.
Buyers signed more purchase agreements than any November since 2004, and there haven’t been as many closings since at least 2003, according to new data from the Minneapolis Area Realtors and the St. Paul Area Association of Realtors.
House shoppers were also particularly decisive. With a median market time of a little more than two weeks, homes went under contract in record time and nearly 50 % faster than last year at the same time.
Prices, too, reached new highs. The median price of all closings hit $310,000, a record for any November. And on average, sellers got 100.2 % of their original list price — the highest November figure since at least 2003 and an indication that multiple offers are still common.
“It’s truly impressive that sales would reach new highs during a pandemic and an otherwise challenging year,” said Linda Rogers, President of MAR and an area agent.
The housing market in the Twin Cities and beyond has defied the economic headwinds of the COVID-19 pandemic. Record low mortgage rates are motivating renters to buy and homeowners to trade up to more expensive houses — even the most expensive houses. Pending sales of $1 million-plus properties were up nearly 30% compared with last year.
On Thursday, Freddie Mac’s weekly Primary Mortgage Market Survey (PMMS) showed that the 30-year fixed-rate mortgage (FRM) averaged 2.67%, the lowest rate since at least 1971.
The pandemic itself is also having a profound impact on the market as people assess their living situations, especially those who are now working from home and have realized their current space no longer suits them.
“People realized how much they hated their homes while in quarantine,” said Lasha Raddatz, a Twin Cities-based sales agent.
She speaks from experience. She said after quarantine in her townhouse, which had only a small deck, she bought a house in St. Paul with a big backyard.
“I would not have moved if not for COVID,” she said. “People are experiencing the feeling of needing a bigger, better outdoors space.”
She’s been in the business nearly 20 years and said it’s been her team’s best year ever. And while it’s still not uncommon to be competing with upward of 10 offers entry-level houses, she is seeing more notices of “price improvements.”
That’s a sign, she said, that buyers aren’t willing to overpay and that some sellers are getting too aggressive on pricing.
“That definitely speaks to things slowing down a bit,” she said. “But if it’s priced right and shows well it’s gone.”
Sellers, especially those who don’t get an offer immediately, also are more willing of late to pay buyers’ closing costs.
“If a house is on the market three weeks, the sellers they’re shaking in their boots,” she said. “People were getting used to this rocking market and thinking ‘I’m going to make a lot of money like my buddy did.’ ”
She said that there’s still a shortage of house listings that are affordable to first-time buyers. Though new listings across the metro were up 1.3% compared with last year, the number of available listings priced from $190,000 to $250,000 are down 42%, the biggest decline for any price range.
That decline in listings has stifled closings in that price range, especially in Minneapolis and St. Paul where sales increased double-digits, defying rumors that rising crime is deterring buyers. In the downtown condo market, meanwhile, sellers have outpaced buyers and prices have softened.
“The Twin Cities housing market continues to exceed expectations,” said Patrick Ruble, president of the St. Paul Area Association of Realtors. “Despite record sales figures, the lack of adequate supply — particularly affordable units — continues to frustrate buyers.”
Jim Buchta • 612-673-7376