Maybe we hit bottom in April of 2022

We don’t know where the bottom is when it comes to the number of houses on the market. There were five times as many houses on the market in May of 2012 as there are today.  Even though prices are maybe 40% higher than they were a decade ago the total dollar value of all of the houses on the market is lower.

Volume doesn’t mean all that much to consumers but it is important to real estate agents and companies. Real estate companies need to bring on more agents if they want to increase their profits. During the first quarter of this year, there have been some disappointing earnings reports.

Here is what the last decade looks like as far as the number of houses on the market each month and the dollar value of those houses. Going forward I am going to predict that we did hit bottom for the lowest number of houses in the market during the first quarter of 2022. However, the seller’s market will remain strange for the next several years as the demand for houses will remain strong and the supply low.

Graph of houses for sale
Number of houses on the market n St. Paul for the last decade

April 2022 Home Sales in Minnesota

With closed sales down by almost 11% over last April, the sales season was off to a comparatively slower start. Historically, the numbers indicated a return to more normal patterns for this time of year. Declines in new listings, which were down nearly 7% compared to a year ago, contributed to softening sales, according to Minnesota Realtors.

Sales may be softening but the demand is still very high and as a result, prices continue to rise.  As I recall last April new listings were up a bit due to the pandemic which caused a kind of roller coaster effect.

This is at least the fifth year of the strong seller’s market due to high demand for houses and a low supply.  I like the idea of this being a “slower” start to the season. So far that is the kind of spring we have had.  The days on market were about 22 in St. Paul which is below the state average of 30.

 

April home sales 2022
April Home sales – Minnesota

Homes sold faster and for more in April 2022

Homes sold at a record-breaking 6 days on market, which was the median number of days on the market for St. Paul houses that were sold in April of 2022. For planning purposes, sellers should budget for 20 days on market to include inspection periods, of any and other contingencies if any.

Home prices are at record highs with the median sale price in St. Paul at 292,000. Five years ago in April 2017, the median sale price in St. Paul was 187K. Even though interest rates keep creeping up there are still more than enough home buyers to quickly gobble up the limited supply.

The supply was up slightly from March which is typical. Historically home prices and sales have the highest in April. I don’t anticipate many variations in the number of home sales each month. Also, I have noticed many single-family homes that were being rented out on the market in the last few weeks. These houses are likely owned by investors who can not make ends meet under St. Paul’s new rent control laws that took effect this month.

So far 2022 has proven to be a great year for home sellers.

chart of april home sales
April 2022 home sales by St. Paul neighborhood

 

March 2022, Minnesota home sales

According to Minnesota Realtors (State Realtor Association), We saw a sharp drop in home sales in March. it isn’t because they are not selling it is because there are fewer homes on the market:

“Closed sales fell by nearly 50% 8.4% compared to March of last year*, marking a correction in the heated housing market of the past two years. New listings in March were also down nearly 45% compared to a year ago with only 5,287 properties coming on the market. Statewide inventory shrank by nearly 25%  10.7%  to just 6,609  7808 homes for sale, which is below one month’s worth of supply.

Consumers, however, were not deterred by the tight market. Buyer demand drove the median home sales price in Minnesota up 3% to $303,850.”

So far it has been an unusual spring home sales season.  The only thing normal about it has been that home buyers like to buy houses in the Spring. There is currently about a one-month supply of houses on the market.

*I looked at numbers in the MLS and calculate that in the 7 county metro area closed sales are down 11% compared with a year ago. We should also consider the fact that home sales were record-breaking in 2021. If we compare March 2022 to March 2019 home sales in the 7 county metro area sales are up by over 6% in March of 2022 as compared with 2019.

 

march open sales graphic
Home sales March 2022 – Minnesota
corrected report 4/22/2022

March 2022 Home sales St. Paul

Here is a recap of March 2022. Home sales and prices in St. Paul by neighborhood. The numbers include all single-family homes in St. Paul. Townhouses and condos are included, and rental properties are not. The data was extracted from the. NorthStarMLS and represent most of the homes sold in St. Paul during the month of March.

Median days on market have gone down since last month. The average is 36 days. On average sale prices are slightly higher than asking prices but it is starting to shift a bit. It is the first sign I have seen in a while that the rise in housing prices might be slowing. Interest rates may be having an impact.

Pending sales and sales are down from last March. As I have been saying every month for the last few years we are experiencing a strong seller’s market caused by high demand for housing or a shortage of houses that are for sale.

Table showing home prices
Home sales and prices by neighborhood

I’ll have some numbers for the rest of Minnesota next week.

February 2022 Home Sales

Homes sold quickly in February in St. Paul. On average sellers got more than the asking price. There were more pending sales in February than there were new listings which means fewer homes for sale. We are hitting new lows. There are about 180 homes for sale that do not have offers on them. Overall the number of new listings was up slightly from January.

In general, the seller’s market is strong. If you have a house to sell we have plenty of home buyers looking in every neighborhood and in every price range. Prices went down slightly in downtown St. Paul with more than 40 condo units to choose from ranging in price from 83K to 995K, there is something for everyone but only one unit that has three bedrooms.

table of home sales by neighborhood
February Home sales

For numbers from prior months please see Local market conditions & home prices.