Twin Cities home values climb as inventory plummets
COVID-19, meet the thriving housing market.
After taking a deep dive in March and April due to the pandemic, housing sales throughout the Twin Cities rebounded in May, coming back strong to even make up lost ground.
Patrick Ruble, president of the St. Paul Area Association of Realtors, said median home sales prices across the Twin Cities were $305,000 in June, up 5% from the same period in 2019.
With just 1.8 months of inventory on the market, a short supply of purchase options and high demand are keeping prices up. "We've continued to see the median sales price gain," Ruble said.
COVID-19 and economic uncertainty could indeed be having an impact, but not on purchase demand, according to SPAAR's 14-page monthly indicators report.
Far fewer homes were listed for sale at the end of June than a year ago — 9,100 compared to 13,000 — a sign that sellers are wary of going to market during the pandemic.
A balanced market, Ruble noted, has five or six months of inventory. Adding to an odd time for the market, interest rates on a 30-year mortgage recently fell below 3%, a historic low.
When the pandemic hit Minnesota in March, "there was a dip in showings, which drives everything," Ruble said. "(Then) we started to see purchase agreements come in the door. The one thing we're missing is listings."
Some have speculated that COVID-19 might put a permanent damper on urban homebuying as buyers seek less density and more room to avoid the neighbors — namely, single-family homes in the suburbs.
"I don't know that it's proven to be true as of yet," Ruble said. "Condo sales did fall a little bit. Townhome sales increased. I wouldn't pin it on COVID, necessarily."
In fact, in St. Paul the median sales price this year-to-date was $235,000, up 6.8% from $220,000 in the same period of 2019.