Home sales in the Twin Cities hit a 20-year high last year despite a 20-year low in listings.
Together, the two extremes resulted in double-digit house price increases.
Throughout 2021, buyers closed 66,319 properties, an increase of 2.7% over 2020, according to a year-end sales report from Minneapolis (MAR) area real estate agents and the St. Paul Association of Realtors (SPAAR).
It marked the fourth year of annual sales gains for the Twin Cities housing market, defying pressure on the region’s wider economy from the pandemic.
At the same time, sellers put 75,536 properties up for sale, slightly less than in 2020. Comparing supply and demand figures, buyers were left with 26% fewer options than the previous year.
“Some aspiring buyers have grown frustrated with a seller’s market,” Denise Mazone, MAR’s 2022 president, wrote in a statement.
Before the pandemic, sales gains were driven by historically low mortgage rates. The pandemic itself has helped boost home sales as renters and existing homeowners seek more space.
The remote work trend has also allowed many homebuyers to live in communities that were once too far from their jobs.
For sellers, pent-up demand helped fuel record price gains. During the year, the median selling price of all single-family homes, condos and townhouses in the Metro increased 11.4% to $339,900. With buyers outpacing sellers in many parts of the subway, the bidding wars helped those sellers fetch more than their asking price.
“I’ve worked with several buyers who wrote more than five offers, but we kept losing, especially in the more affordable segments,” Mazone said.
For buyers, 2021 has been a year of frustration. At the end of the year, there was only 1.2 months of supply of listings, down 33.3% year over year. The market is considered balanced between buyers and sellers when there is a five to six month supply of listings.
With so few listings on the market, buyers wasted no time. On average, homes sold in just 28 days, down 40% from last year.
Sales rose in virtually every category, with condominiums posting the biggest gain, up more than a quarter from a year earlier. The most dramatic change in the market was for properties priced above $1 million. These sales have increased by more than 50%, resulting in a sharp drop in market times for these properties.
Unlike 2020, when the pandemic pushed the market from spring – normally the busiest shopping season of the year – into fall and winter, 2021 was in many ways a return to normal. for shopping habits.
Buyers were most active in the first half of the year, when mortgage rates were lowest, leading to double-digit price increases at the start of the year. Sales slowed slightly in the latter part of the year, leading to a slight moderation in price increases.
“While it was an undeniably strong year, we saw sales activity slow and price gains moderate in the second half,” said SPAAR President Mark Mason. “A price growth of ten percent or more is simply not sustainable over the long term.”