Strongest growth in home sales over 500K

Overall 2020 was a great year for home sales particularly homes in the 500,000 price range. There was a decrease in the number of lower-priced homes sold. It kind of makes sense because as home values go up there are fewer homes in the 150K to 200K price range. The 200K to 300K price range had the most closed sales in 2020.

Closed home sales were up 8.45% in Minnesota in 2020 from 2019. Home sales have been strong nationwide and the trend will continue in 2021. Lender mediated sales are down from last year. We are not seeing an uptick in foreclosures. People who are having trouble making mortgage payments should contact their lenders.

Kittson count Minnesota saw a 143% increase in home sales in 2020 over 2019 and Wilkin County MN saw a 60% decrease in home sales year over year.  The Twin Cities 7 county metro area saw a 6.8 percent increase in home sales year over year.

Real estate is local and market conditions are not the same everywhere.

According to Minnesota Realtors, the median home sale price in Minnesota for 2020 was $275,000 up from $254K  in 2019. The average home sale price was over 315K.  The inventory of homes for sale was down 46% from 2019, which is why prices continue to rise. It is a great time to sell a house.

home sales 2020
Home sales by price in Minnesota 2020 from Minnesota Realtors

Housing market holding pattern

Back during the housing market crash, we saw absorption rates of 10 or more months. In a healthy balanced real estate market absorption rates are right around 6 months.

The house I grew up in

When they are higher than 6 months we are in a buyers market and at less than 6 months a seller’s market.

The absorption rate for housing nationally is just under 2%. In the Twin Cities Metro area, we are sitting at 1.8%, and here in St. Paul, it is at 1.7% which is a very strong seller’s market.

The absorption rate computes how long it would take for all of the homes on the market to be purchased at the current rate they are being purchased.

I feel like a broken record. It is a very good market for home sellers. Buyers can expect high prices and a lot of competition. There is a shortage of single-family housing. Affordable housing is scarce.

Expect housing prices to continue to climb in 2021.

St. Paul home sales in 2020

I thought it would be nice to show some home sale numbers for St. Paul for the year. I have sorted the table below by neighborhood. In general, homes are less affordable than they were last year. Median home sale prices are up from 2019 by $10,000 and days on market are down by about 8 days. Homes located in the downtown area took the longest to sell and homes in the Midway neighborhood sold the fastest.

That means it takes less time to sell a house and it will see for more money than in 2019. This is good news for homeowners.

The number of home sales was up from 2019 which was surprising during the pandemic and all. Real estate did better than other sectors of the economy which is probably why we are seeing a surge (I hate that word) of new real estate salespeople.

Right now in St. Paul, we are at what I hope is the yearly low for the number of houses on the market.

People who plan to downsize this year may come out ahead if they can find an affordable house to downsize to.

table of home sales by neighborhood
St. Paul home sales by neighborhood

If you would like to sell your house please call or write for a no-obligation equity analysis . . or to find out how much it might sell for and how to get started.

Home sales by neighborhood

Here are the December 2020 home sale numbers for St. Paul. For the first time in ten months, home sale prices were slightly lower on average than asking prices. In most years home sale prices are slightly lower in December than they are in other months. In other words, there is nothing to see here.

Pending home sales and total closed sales are up from December 2019 and it looks like overall home sales or the year are up around 14% from last year. It should be noted that 2019 home sales were the lowest in 5 years and the number of homes sold in 2020 is the highest for the same 5 years.

In several neighborhoods, on average sellers did get more than the asking price. Median home prices are up 7% from last December. Homes sold quickly even during the holidays and a raging pandemic with an average of 31 days on market, and a median of only 15 days on market.

I’ll have some year-end type numbers next week.

The inventory of homes for sale remains at historic lows. The demand for housing continues to drive up prices. January 2021 promises to be a great month for local home sellers.

chart of home sales by neighborhood
December 2020 home sales

The data used to make the chart was extracted from the NorthstarMLS which is deemed reliable but is not guaranteed. The data includes a high percentage of single-family homes,  condos, and townhouses that were sold within the city limits during the month ending 12/31/2020.

If you would like to know how much your house will sell for and how long it will take to sell please contact me for a no-obligation and always free consultation.

For more local home sales numbers and assorted statistics, please see Local market conditions and home prices

More Realtors in Minnesota

Minnesota Realtors® has seen a 30% year-over-year increase in new members since June 2020, with 73% concentrated in the Twin Cities Metro area. I know I wrote about this a week ago and cited a much smaller number which I will correct once I figure out how I got it wrong.

Many were attracted to real estate sales because of the busy housing market  (14%). For others, it was a layoff that was the reason for the leap into real estate (9%). 61% of the people who joined us had wanted to work in real estate sales and finally moved to it.

As I said last week 51% of the new members are over 50 which is typical. Full time 100% commissioned sales jobs do not attract all that many younger people. There is no health insurance except for what we buy for ourselves.

Most local REALTORS are 1099 independent contractors. I have been self-employed for almost 20 years. It isn’t an easy life but it can be very rewarding.

Real estate agents get better with experience. As they start out they don’t know what it is they don’t know but there is always business for new agents and they gain experience as they work with friends and family. Most new agents get paid as much as experienced agents.

During periods of higher unemployment, we often see an increase in the number of REALTORS. During the housing crash, we saw a decrease and the average age of members went down a bit as members retired.

There will likely be some retirements at the end of the year too. Retirements will show up when members do not renew their membership for 2021.

Regional housing market for November 2020

According to Minnesota Realtors (the state Realtors association):

“In November, closed home sales were up +15.8% versus a year ago, with pending sales demonstrating unseasonably strong growth, climbing +10.6% higher than November 2019. In a sign of continuing high demand, properties spent an average of 38 days on the market (13 fewer days than last year). While buyers aggressively chased scarce inventory, the median sales price went up +13.6% year-over-year to $284,000.”

You may notice that home prices went up in the metro area by 9.8% year over year which is way above the 2 or 3% I was projecting at the beginning of the year.  I didn’t factor in the pandemic, and am not sure what the long term effects of it will be.

November 2020 Home Sales – Minnesota

Even though we are well into December it is still one of the best times to sell a house. The market strongly favors sellers.