While much of the nation still struggles to find homes for sale, Minneapolis is finally showing signs that sellers are back in the game. Inventory in the market was up 6.1 percent in May, according to the latest reading from the Minneapolis Area Association of Realtors. The only hitch: Buyer demand is slightly weaker than a year ago.
“Our fundamentals in the market continue to remain strong, those being affordable rates, low unemployment, a healthy housing affordability index and lower numbers of distressed sales,” said Rod Helm, a sales associate with Coldwell Banker Burnet, and president of the Minnesota Association of Realtors. “Signs are that we remain in recovery, but somewhat of a lower rate in 2014 than in 2013, which is good thing.”
Burnet said the main challenge this year has been a shortage of inventory in some categories, which recently is showing signs of easing some, bringing the market closer to a balanced market.
The bright spot is the vacation home market. Minnesota’s lakes are still a strong sell and a distraction during the usually slow summer months in the twin cities of Minneapolis and St. Paul. Realtors in the area expect to see sales in the city pick up in the fall.
“Yes there’s more inventory, but not in all areas or price points,” said Emily Green, president of the Minneapolis Area Association of Realtors. “The lack of supply is really starting to weigh on consumers and on sales numbers. This market has been supply-constrained for long enough, but the trend is moving in a positive direction.”
New listings in the Twin Cities in June were up 8.9 percent year over year. Signed contracts to buy existing homes, or so-called pending sales were basically flat.
The median price of an existing home in June was up 4.5 percent, a smaller increase than the national average, but Minneapolis did not see the huge boom to bust to recovery that some hotter markets did. The amount of time it took to sell a home was just 69 days, down nearly 7 percent from a year ago.