by VIBE Realty
on Thursday, May 6th, 2021 at 12:05pm.
Those of us Minnesota dwellers have witnessed a myriad of changes in the housing market throughout the Twin Cities over time. And it’s true — Minneapolis and Saint Paul continue to evolve. Even with changes that COVID-19 has brought upon our economy, along with the ever changing political backdrop of our communities, the demand for housing in the Twin Cities remains at an all time high. Home sales and prices skyrocketed as buyers outpaced sellers in some parts of the metro.
And so this leads us to the buzz term of the year: “It’s a Seller’s Market.” But what does that really mean for sellers, buyers, and real estate as a whole? While the market remains hot across most larger cities in the country, it’s hard not to acknowledge the growth and demand here in the Twin Cities and recognize it as an emerging market that outranks many other competitive counterparts.
So what’s driving the demand? How is housing becoming so competitive? And how do we compare to other emerging cities? Don’t take it from us — it’s all in the data.
A Strong Economy
According to CNBC, Minneapolis continues to be on the move. “It’s fast-becoming one of the most business friendly regions in the nation, thanks to a thriving labor force, diversified talent pool and tightly-knit cluster of corporate conglomerates. The job market in the Twin Cities is moving from strength to strength, while the unemployment rate remains low.” A strong economy with low unemployment is good reason enough to move to a city, and the Twin Cities is no exception.
Inventory Shortage of Homes
If you’ve been following along with our Market Update Series on the blog, you may have noticed the supply of inventory continually going down this year. According to this year's February numbers, 2020 had twice as many homes on the market. Prices have also gone up by more than 10% over the last year. With fewer houses and more buyers on the market, sellers have been able to raise prices to get more from each sale.
Kare 11 released an article highlighting the inventory issue for buyers who continue to make offers above listing price. "Eight offers when it was all said and done and on average those were right around $30,000 over asking price and we did not get a single one of them." Said Joel Isenberger of Minneapolis. Yikes, we feel ya.
A Competitive Housing Market
With a shortage of inventory combined with a high demand, competition is rising. Minneapolis ranked 10th as the most competitive housing market by The National Association of Realtors in 2021. The cities listed face the most competition in the nation, according to new research by LendingTree. They factored in the average down payment percentage, the share of home buyers who have credit scores above 720, and the share of home buyers who shop around for a mortgage before looking for a house.
Referring back to our Market Updates Series, there is clear evidence that the average sale price continues to increase in recent months. Looking back at February 2020, there was an average sale price of $281,570. This February we saw it jump to $358,739. That’s almost a 27% increase!
So, are you convinced yet? We’re hoping our curation of data and references provides insight about the Twin Cities market and how quickly it continues to evolve and emerge. Don’t be discouraged. Our agents have the skills to guide you through this process and we’re here to help. Get in touch with us sending a note to firstname.lastname@example.org.