The imbalance between homebuyers and sellers in the Twin Cities last month was a little less out of whack than it's been in years, but sellers still rule when it comes to the entry-level market.
House listings across the metro increased significantly last month and buyers took notice — pending sales increased slightly, suggesting a modest rebalancing between supply and demand.
During July, buyers signed 5,894 purchase agreements, 0.4% more than last year at the same time and the first monthly gain this year, according to a monthly report from the Minneapolis Area Association of Realtors.
Though buyers had a few more options, stiff competition for entry-level houses pushed the median sale price of all closings during the month to $268,000, a nearly 7% year-over-year increase and a July record.
"Buyers out there should know that their persistence is beginning to pay off," said Kath Hammerseng, president of MAAR and a sales agent with Edina Realty. "Sellers appear to be preparing to bring additional options to the market."
Higher prices and lightening-fast sales helped draw more sellers into the market. During the month there were 7,671 new listings, a 4.1% annual increase and the biggest monthly gain in more than a year. On average, houses sold in just 38 days, a 17.4% decline compared with last year.
Though the market appears to rebalancing slightly, there's still a deep disconnect between supply and demand in certain submarkets and price ranges.
Sales of houses priced at less than $249,999 fell 9.1% during the month, while demand for move-up houses increased the most. For example, sales of houses priced from $250,000 to $499,999 increased 14.4 percent and sales of $1 million houses increased 7%.
"The inventory shortage has been the most frustrating element for buyers," said Todd Urbanski, MAAR's president-elect. "Patient buyers who remain attentive will not only lock in desirable rates but will see some appealing listings and a more-maneuverable market as we move into fall."