Are you aware of what is actually happening with homes in the Twin Cities now that the spring market is in full swing??
This blog will cover all the latest news including homes sales prices, inventory, demand trends & mortgage interest rates.
I’m Bailey Beckman, a Twin Cities resident and local realtor that drives my business by data and real facts, not market assumptions and emotions.
Up first... let's talk about money
In April we saw the median sales price of homes hit $367,500.
As you can see in the 10 year history of the month of april in the twin cities, we have seen a consistent increase annually. However, this year we did see a little under a 1% decrease compared to last year.
This is still a very strong purchase price considering the raise in interest rates year over year. The average 30 year rate in in April 2022 was 5.19% and the average in April 2023 was 6.51%. I am excited to see prices remain at roughly the same level as last year, because it does help lead to a slightly more balanced market between both buyers and sellers.
If we break apart the median price by property type, you’ll see that the decline in price fell under single family homes and condos. On the other hand, town homes actually increased in sales price.
This is one data point that shows the impact of affordability here in the Twin Cities. More buyers are opting to purchase townhomes because of their lower price point, while still being more closely related to single family homes.
Looking at historical trends, I expect home prices to be a smidge higher over the next two months while we hit our seasonal peak.
Now let's chat about inventory
Overall, we saw the number of sold homes decrease by 33% year over year for the month of April. There are a couple of reasons why we saw this decrease.
- The increase in interest rates. When rates increased, buyer demand decreased. Fewer buyers means fewer homes sold.
- During the last few years home owners have had the opportunity to refinance their home loans to historically low rates. If you are an owner holding a mortgage at 2.5% interest, it takes quite a bit to motivate you into selling and buying a new home at closer to 6.5% which impacts the total number of homes available to be sold.
New listings are down across the board. So even though buyer demand has decreased with higher rates, the balance in the market has still remained relatively the same because there are also fewer homes available for sale.
The Months supply did see an increase compared to last year BUT we are still only sitting at 1.5 months of supply. To put this into perspective, a BALANCED market is considered between 5 to 7 months worth of supply, and a true BUYERs market is 7+ months.
let's dig deeper into buyer demand trends...
- Showing activity is down about 18.8% compared to April of last year. On average, a home that is listed for sale had about 8.2 showings in April.
- Buyers are also still offering sellers 100% of their original asking price on a home.
- Homes sat on the market for a median of 17 days last month, which is a 112.5% jump compared to last year, but nothing to sweat because it is right on par for the spring market historically speaking.
so what does all of this mean for the next few months?
Unless we see MAJOR changes in the mortgage interest rates, I expect to see a pretty similar market to April. Inventory will still remain low, and buyer demand will be kept at bay, BUT the balance between active buyers and active homes will still remain a competitive sellers market.
According to the Mortgage Reports, rates are projected to be right between 6.1% and 6.5% leading into July 2023.
There you have it!
There is your recap of the local housing market here in the Twin Cities. No smoke up your butt, no fear tactics, just info.
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