A lack of inventory and low interest rates helped keep Minnesota home sale prices rising as pending sales dropped in May, according to Minnesota Realtors.
When comparing the housing market of May 2020 to May 2019, there is a 20.4% decline in available houses, but pending sales only dropped by 12.4%. Meanwhile, the average sales price rose 1.6%.
"With workers facing unemployment and home buyers feeling anxious about the coronavirus, we were expecting much worse," said Chris Galler, chief executive officer of Minnesota Realtors.
Realtors were afraid of a repeat of the 2008 recession, where there were too many available houses and not enough buyers. But inventory levels are low (new listings fell 24.2% in May compared to same month the year before) and interest rates are strong.
"In some markets we have a handful of homes for sale and a long line of prospective home buyers," Galler said. Often there were multiple offers on homes priced within $50,000 of the median price of $267,800.
Starter homes are especially popular both in and outside the metropolitan area, and their limited quantity is sparking high competition among home buyers, Galler says.
More listings are expected as home-sellers and home-buyers seem more comfortable with protocols in place with the coronavirus. Many realtors are using virtual-tours to let buyers screen homes before entering them to reduce individual contacts.
"In the past few weeks open houses have been returning to a new normal," he said.
