Demand for Minnesota homes remained ramped up in February, but the Minnesota Realtors group says supply is dwindling. This means fewer sale closings coupled with higher price tags and interest rates.
Last month, closed sales were down 12.9 percent with pending home sales down 10.2 percent compared to February 2021. The decline in sales comes a year after the Minnesota Realtors Group reported a more than 16 percent rise in closed sales in 2021 compared to 2020.
The statewide median sales price climbed 7.8 percent to $304,500. The average sale price was up 10.3 percent to $353,409.
New listings were down 8.5 percent compared to last year, with just 5,801 homes added to the market. With demand still up, the overall statewide supply of homes plummeted 21 percent to just 6,606 units.
“We simply don’t have the inventory levels necessary to meet demand,” Chris Galler, CEO of Minnesota Realtors, said in a statement. “The combination of a falling Affordability Index and rising interest rates is causing significant problems for first-time homebuyers who have been counting pennies and waiting anxiously to purchase a home of their own. Realtors across the state are working to help counsel home purchasers and make them aware of these unique market dynamics.”
Minnesota Realtors slices the state up into 13 different regions. For the heart of the Twin Cities, Minnesota Realtors uses the historic, seven-county definition of the metro.
Closed sales declined in 10 out of 13 regions across the state. The three regions that reported increases include:
- Southwest Central, up 11.1 percent
- Southeast, up 5.9 percent
- Southwest, up 1.6 percent.
The three regions that saw the largest decline in sales include:
- West Central, down 27.4 percent
- East Central, down 18.1 percent
- Northwest, down 17.6 percent
The seven-county Twin Cities metro ranked 8th, with closed sales down 15 percent compared to a year ago.
(Twin Cities Business)