For the first time on record, average sale prices in May 2018 were 2% higher than list price. That’s good news for sellers, and instructs buyers in how competitive the market is right now. I have experienced situations where the winning bid was $25k-$35k, or even more, over list price!
With average sale prices higher than list prices it should come as no surprise that median sales price continues to rise. Average median sale price for May 2018 was 8.4% over median sale price in May 2017.
Sellers may be starting to get the message, because May new listings were higher than last year for the first time this year. New listings in May 2018 were 2.9% over last year, in contrast to 17.3% below in March.
Unfortunately, the new listings aren’t enough to meet buyer demand and the inventory continues to fall year-over-year. May 2018 inventory was 17.8% below last May, and the monthly year-over-year drop has been in the double digits since September 2015. The average year-over-year monthly drop over the last 12 months was 16.2%.
Both closed and pending sales are showing the traditional spring upward surge in activity, but both have been hanging below last year every month so far this year. However this is due to lack of inventory rather than lack of buyer interest. Many buyers will tell you how many offers they have written, only to be outbid by another buyer.
Both the months supply of inventory and days on market until pending continue to fall. May ended with an overall 2.1 months supply of inventory, the first month it has been above 2 since last October and 16% below May 2017. Average days on market before pending was 47, 9.6% below last year.
Price range does continue to make a difference, and the months supply of homes for sale has increased in all price ranges. It is encouraging that the supply in the move-up price range $500k-$1M is now officially balanced… the market is considered balanced when the supply is 5-6 months.
Townhomes continue to be the property type with the lowest months supply of inventory.
A strong job market and low unemployment support and healthy supply of buyers. With mortgage interest rates rising along with rents, many are feeling an urgency to buy.
The figures above are based on statistics for the combined 13-county Twin Cities metropolitan area released by the Minneapolis Area Association of Realtors.
Never forget that all real estate is local and what is happening in your neighborhood may be very different from the overall metro area.
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