New Home Listing Up, Buyers turning out, the Spring Market is on

Twin Cities Real Estate Market Update March 2024

New listings are the bright spot in this month’s update. We are finally seeing more homes coming on the market after the great drought of 2023. Will that trend continue?

New Homes Listed for Sale Jump 35% Year-Over-Year

As I mentioned, new listings are the bright spot this month. The number of new homes hitting the market in February grew by about 550. That is about a16 percent jump month-to-month. And compared with February last year, that was close to a 35 percent increase in new listings.

Thirty-five percent! We like to see that.

I do think the warm weather has been a big factor in the increase in new home listings. Last year, the Spring market started in March. This year it seemed to take flight in January and much of January felt more like March. We also saw a little dip in home mortgage interest rates in December and January and that probably had an impact as well. image of family looking at a home for sale

I certainly saw buyers out in droves in January and February. I showed one listing in South Minneapolis that went on the market on a Friday and by 1 pm Saturday when my buyers saw it they had six offers. By the

offer deadline at 5 pm the same day, they had 24 offers. Now that is not a typical experience at this time of year. This was a smaller home, nicely updated, and priced under $300,000.

But I do think it shows that the Spring buyers market has gotten off to an early start. It also shows just how limited the supply of homes for sale is in the lower price points.

Supply of Homes for Sale Grows

Speaking of supply. Even with the growing number of new listings, we are not seeing much change in the overall supply of homes for sale.

The total number of homes listed for sale rose just a bit in February compared to the previous month. But realistically, that number has been holding fairly steady since December.

What is notable here, is that the total number of homes listed for sale in February was 16 percent more than at the same time last year. And it was up by 25 percent if we just looked at pre-owned homes. The number of new construction homes listed for sale actually went down.

Considering how squeaky tight the housing market has been, any increase in supply of homes for sale is good news for anyone planning to buy a home this year. If you’re planning to sell your home this year, you don’t have to worry. We are still in a strong sellers market.

In February, the months supply, which is one way to determine the strength of the market, was at 1.7 months. That’s up from 1.3 months in February of last year. But that is still well below what is the 4 to 6 months’ supply that the industry considers a balanced market. 

Home Prices Rise Slightly

Now let’s talk home price. After flatlining for 5 months, home prices edged up slightly in February. The median sale prices rose to $372,000 in the metro, up just a couple of thousand dollars from the previous month, but that is the first increase in the median sale prices we’ve seen since September of last year. The average sale price also ticked up just a bit, to $445,000.

Just a reminder. The average sale prices is the average price of all the homes sold in the previous 12 months. The median sale price is the midpoint. Half the homes sold above that price and half sold below it.

On average, seller were getting between 97 and 98 percent of their asking price in February, which is pretty typical for a February market.

It was taking about 37 days to sell a home in February, which is a little faster than the same time last year and pretty normal for this time of  year—if you take out those crazy pandemic years.

Back in 2015, the average number of days on market was 86. And that was when we had something closer to a balanced housing market with a relatively even number of buyers and sellers.

Interest Rates Dip then Rise

Let’s take a quick look at interest rates, which seemed like they were going to come down a bit at the beginning of the year, haven’t. They’ve just been hanging around that 7 percent range for a 30-year fixed rate mortgage. And until the Federal Reserve Board decides we’ve conquered inflation to lower the benchmark rate, that is probably where they will stay.  As of this week, Fed Chairman Jerome Powell is still being pretty cagey about when that might happen.

J Trout Lowen is a Minneapolis homeowner and a Twin Cities Realtor®.

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