Local Market Conditions & home prices

Here is a look at January home sales In Minnesota.

In most cases, January home sales reflect December activity. We had some cold weather in December and that does affect the housing market.  The Christmas holidays have an impact too.

The number of new listings reflects January listings. A smaller-than-expected number of homes went on the market in January and the inventory of homes on the market is very low.  A smaller inventory usually means higher prices and always means fewer sales.

The numbers are from the NorthstarMLS which is deemed reliable but not guaranteed and also the source of listings for numerous websites where buyers can search homes for sale.

I like to show the numbers by neighborhood because real estate is that local and I specialize in St. Paul real estate.

This is my year-end wrap-up for St. Paul home sales. Overall home sales were down from 2021 which was a peak year.  They were fewer home sales in 2022 than in any of the last five years:

Total home sales in St. Paul for 2022 – 3395,  In fact, if we go back 10 years the only year with fewer home sales in St. Paul than in 2022 was 2014.

2021-4264

2020-4028

2019-3547

2018-3707

Here are home sales by neighborhood for 2022:

2022 was a good year to sell a house. Median prices are are record highs and are still rising.  For most of the year interest rates were at historic lows making housing a little more affordable for buyers.  Median home prices went up over 6% from 2021 and 24% since 2018.

The demand for housing is strong but the supply is small. We will see fewer houses on the market this year and sales may be lower than last year. Home buyers may want to wait until interest rates or prices go down a bit before diving in. People who buy now with the plan to refinance later are taking a big risk.

For homeowners, 2023 is a great time to sell. There are more buyers than sellers.  The current absorption rate in St. Paul is under 2 months.

My data is from the NorthstarMLS which captures 90% or more of local home sales and is deemed reliable but not guaranteed. Even though it is just for St. Paul it accurately reflects the trends in the entire Twin Cities metro area.

Here is a look at home sales in December 2022. December is generally the month with the fewest home sales and new listings. Last month was pretty typical in that regard.

The overall number of pending listings is the lowest I have seen in a few years. Houses are selling but not very many are being put up for sale. There is still less than a 2-month supply of houses for sale and it takes on average 29 days to sell a house.

In some neighborhoods, the average sale price was higher than the average list price which means prices are still going up in those neighborhoods. Overall sale prices were up. Once the interest rates went down a little mortgage applications rose which may mean more competition for a smaller number of houses on the market this month.

For more local real estate numbers please see Local market conditions and home prices.

Real estate is local.

The supply of homes for sale as measured in months has been low for almost a decade.  After what I hope what I hope was our all time low of a months supply in April of 2021, the supply has been slowly rising. There is currently a 1.8 month supply of houses on the market in St. Paul. That is very low especially for December. The seller’s market remains strong but may be weakening.

The sellers market remains strong but may be weakening a bit due to higher interest rates, inflation and maybe because houses are so expensive.

Months supply is a measure of how long it would take for all houses currently on the makret. So far this month it takes an avererage of 36 days to sell a house in St. Paul.

The most common question I get from homeowners is: “How long will it take to sell my house”.  I pulled up some numbers from the Multiple Listing Service and the average amount of time it takes to sell a house in the Twin Cities metro area is about 30 days. Houses that are in the 250,000 to 350,000 price range sell the fastest and houses that are priced over 500K take a couple of days longer to sell.

There are a lot of variables. I suppose the numbers refer to the “average” house. The house needs to be priced right. Typically it takes a little longer to sell a house in December than it takes in March.

I decided to look at data from the last ten years for some perspective. It used to be pretty normal to have a house on the market for six months or more. In the last couple of years, most of our listings have gotten offers after a day or two on the market.