Here’s the Minnesota real estate market report for February, 2022 covering the market from December 2021 to January 2022. Currently the median sales price for homes in the Twin Cities area is $340,000. That number didn’t change from December to January, which is normal. There’s often very little movement in price during the winter holiday season which is the end of November through January 1st.
Inventory
The inventory of homes is low, but it’s usually low this time of the year. There often isn’t a significant uptick in available inventory until spring which peaks during the summer months. A year ago there was a one month supply in inventory for the Twin Cities area but that’s down 20% this year. That doesn’t mean it’s going to be impossible to buy a great house in this area, but it does mean that buyers are going to need to be flexible on all fronts. A flexible budget helps, but buyers also shouldn’t get emotionally attached to any house until their offer is accepted. Some buyers may be putting in offers on multiple offers until they get one accepted. Being flexible on location can also help increase your chances of buying a home quickly.
Days On The Market
Winter is typically the slowest time for home sales. In January of 2019 and 2020 respectively houses were on the market for an average of 44 days and 45 days. But because the market is very competitive right now and inventory is low homes are selling quickly even though this is typically a slow sales period. If you are in a position to buy right now even though there is limited inventory you might be able to get a great house for a great price. Waiting until there are more homes on the market will decrease your chances of having an offer accepted because more people will be looking to buy.
Homes On The Market
In January of 2021 there were 5,500 houses sitting on the market but in January of 2022 there were just 4,500. That’s a new record for the fewest number of homes on the market in the Twin Cities area. That doesn’t necessarily mean that inventory will be low throughout the rest of the year because typically people wait to put their homes up for sale until the spring and summer. However, that does fit with the trend experts are seeing of there being fewer homes on the market as well as increased demand for homes.
The Year Ahead For Twin Cities Real Estate
There are still a lot of variables that could change the Twin Cities real estate market in the next few months, but all indications are that once again it’s going to be a strong seller’s market and that buyers are going to be competing for homes. One variable that will have a big impact on both the cost of homes and the number of buyers who are competing for those homes is the interest rate. There’s very little doubt that interest rates are going to go up, possibly by several points. That will price some would be buyers out of the market by making mortgages unaffordable for them so that will decrease competition a little. But there still is going to be an imbalance between the number of homes on the market and the number of buyers that want them.
First time buyers or others who are trying to wait out the market and buy when there is more inventory and lower prices may find that’s not the best strategy. Covid has changed the way that people live and work, and there’s no reason to think that the crush of home buyers looking to either buy a first home or upgrade their existing home to better suit the way people live and work now is going to slow down this year.
