Spring Market Draws out Eager Buyers; Sellers Still on Hold
Minneapolis, Minnesota (May 17, 2016) – New Listings showed a second year-over-year decline in 2016 while pending purchase activity rose for the 17th straight month. Buyers signed 6,373 new purchase agreements, a small but important 1.6 percent gain compared to a record-setting April 2015. Due to the well-known supply shortages in our market, would-be sellers are concerned about their ability to secure their next property in the current environment. Inventory levels fell 19.4 percent to 12,849 active properties. Because of record demand, weak supply and a more expensive mix of homes selling, the April median sales price rose 7.7 percent to $231,500. Median list price, by contrast, has already reached and exceeded its previous record, perhaps an indication that the median sales price could do the same this year.
As was the case in March, serious buyers came out swinging in April. In fact, sellers had the same chance of getting offers above their current list price as they did below. Those odds were exactly fifty-fifty—as they were in 2005. That’s not the case for original list price, which indicates that once a home is properly priced, serious buyers are willing to write full-price offers. Unsurprisingly, homes tended to sell in less time, with cumulative days on market declining 14.1 percent to 73 days. That’s the lowest April figure since 2007. Months supply of inventory fell 27.8 percent to 2.6 months—the lowest April figure on record going back to 2003. Generally, five to six months of supply is considered a balanced market. While our region as a whole is favoring sellers, not all areas, segments or price points necessarily reflect that.