March 30
This Week In One Sentence
Q1 ’25 is almost in the books and here is the year-over-year summary: New listings are flat, pended sales are down about 10%… and yet it shakes out to still being in a very good sellers’ market with prices still on the rise.
In fact, while the hot seasonal Spring Market continues to roll and the multiple offers continue to pour in on the better listings, the early indications are that year-over-year prices could be up more than 5% in Q1.
Breaking It Down By Price Ranges
Every price range in the Twin Cities is a sellers’ market as defined by our industry metrics. Even the $2m-$2.5m market, where the velocity of sales is about one sale every other day, the ratio of listings to buyers is 5:1 (a balanced market is 6 listings to every buyer).
It’s hard to get a home below $300,000, where the ratio of active listings to buyers is 1.8:1. It’s hardest of all in the $300,000-$500,000 range (1.2:1). There’s not much relief for buyers shopping in the $500,000-$1m price range (1.8:1). (The higher ratio in the sub-$300,000 range is probably attributable to an abundance of low-priced older condos and townhomes that are weighed down by incredibly high association dues, insurance issues and assessments.)
The steady stream of multiple offers for the best listings has been fairly consistent for nearly two months now. There’s a good chance that the contracts written right now will lead to a record $400,000 median sale price when closed sales prices for May and June are eventually ‘in the books.’
And yet, from the standpoint of inventory of homes for sale, this is as good as buyers have had it since 2019—there are 11% more homes on the market now than one year ago, and a whopping 78% more than this week in 2021.
Seller’s Market Meter*
The market meter checks in again this week at 83 as our current seller-to-buyer ratio has been steadying between 1.8:1 and 1.95:1 for more than a month.
Current Interest Rates**
-30-year conventional: 6.75%
-30-year FHA: 6.25%
-30-year jumbo (loans above $802,650): 6.925%
Median Payment Tracker***
The median principal & interest monthly payment on a median-priced home based on last month’s median closed sale price is $2,010. A year ago, it was $1,969.
*A Market Meter Score of 80-84… A Fairly Strong Seller’s Market
This market probably has a month’s supply shorter than 2 months, which means sellers clearly have the upper hand. This is a market where careful pricing and outstanding staging can still bring more than just a few offers, and sales prices in line with the hottest of markets. The best are killing it. Homes that are listed without best-practice preparation may see mixed results. Some could sell fast while others could easily take a little longer and be leaving money on the table--and sellers a little disappointed. But make no mistake, this is a market where sellers are in the driver’s seat and control their fate if they make good choices before presenting their listing to the market. This market is likely a market driving YOY appreciation of 5- to 10% if it can sustain itself beyond just the hottest weeks of the spring market.
**Estimate compiled from multiple sources and roughly based on a buyer with a mid-700s credit score, qualifying debt-to-income ratios and 45-day lock.
***Based on 20% down-payment on purchase of a home at the most recent month’s median sale price in the 7-County area, with Friday’s ‘average’ conventional mortgage rate. Payment does not include taxes and insurance.