Minneapolis–Saint Paul, Minnesota (January 22, 2019) – Beauty is in the eye of the beholder. Sometimes, so are market statistics. For sellers, the big stories of 2018 were three records: prices, market times and percent of list price received at sale. For buyers, the major themes were increased new listings toward year-end, an annual inventory increase, changing interest rates and affordability pressure. Driven by sizable gains in new listings later in 2018 combined with moderating sales, for-sale housing supply finally bounced off its 15-year low.
The ongoing housing shortage has created a competitive environment where multiple offers have become common. Thus, sellers are receiving strong offers in record time, but this fast-paced market can frustrate some consumers. Market times continued to shrink while absorption rates remained tight but showed signs of easing. Mortgage rates on a 30-year fixed loan started the year around 4.0 percent but touched 5.0 percent before settling on 4.5 percent. Foreclosure activity fell for a seventh straight year and is back around 2005 levels. Although single-family homes made up about 74.0 percent of all sales, both townhomes and condos had better sales performances. Similarly, previously-owned homes made up about 91.0 percent of sales but new construction showed a much stronger gain.
2018 by the Numbers
Sellers listed 75,969 properties on the market, a 0.3 percent decrease from 2017
Buyers closed on 59,189 homes, a 3.4 percent decrease from 2017 yet the 4th highest figure since 2003
Inventory levels for December rose 4.5 percent compared to 2017 to 8,128 units, reversing 3 years of declines
Months Supply of Inventory was up 8.5 percent to 1.7 months, also the first increase since 2014
The Median Sales Price rose 7.7 percent to $265,000, an all-time record high
Cumulative Days on Market declined 14.3 percent to 48 days, on average (median of 22)—a 12-year record low
Changes in sales activity varied by market segment
o Single-family sales decreased 4.2 percent; condo sales rose 5.4 percent; townhome sales fell 3.3 percent
o Traditional sales declined 2.0 percent; foreclosure sales fell 38.0 percent; short sales were down 36.2 percent
o Previously-owned sales decreased 4.7 percent; new construction sales rose 12.7 percent