Minneapolis Housing Market Update – February 2019 Edition
Minneapolis has concluded its 2018 winter housing market season (December through February) and is ready to start the 2019 Spring housing market, record snow and temperatures notwithstanding, of course! First, we’re going to delve into some of the basic market statistics for Minneapolis here today. Then, I’ll get a little more detailed with our metrics. Finally, I’ll make a prediction on where the Minneapolis housing market might be heading.
The 2019 Minneapolis Housing Market is Starting With a Head of Steam
First, let’s establish the metrics: we’re using the City of Minneapolis 12 month rolling average for ALL property types. Data was pulled March 6th, 2019 from NorthstarMLS. Got it? Great! With that in mind, the median sales price of $265,000 at the end of February is 8.11% higher than a year ago. This outperforms the Twin Cities region, which was up 6.4% in the same metrics. All of this is Terrific news for Minneapolis home owners. Then we look at price per square foot (PPSQFT) and we see that it’s not just bigger homes selling either. Median PPSQFT was also up 8.12% YOY ($197). Once again, this outpaces the Twin Cities region’s 6.4% gain. So, we can establish that the Minneapolis housing market is outperforming the regional market.
Looking at the inventory side of things, we still see a tight housing market in Minneapolis. New listings in the 12-month period ending in February was up 5.07% YOY, with 7,198 new homes on the market. This increase coincides with a nearly flat closed sales tally of 5,625 (up .21%). This leaves the 12 month RA of months supply at an anemic 1.8, up slightly from last year’s 1.7, but still very much indicating that the Minneapolis housing market is favoring the seller.
The 2019 Minneapolis Housing Market Short Term Numbers Have Been Strong as Well
Next, let’s look at the shorter-term numbers. After an absolutely zombie like December for new listings, January posted a robust 22% gain YOY, putting 419 new listings on the market. This led to a burst of pending sales (316, up 11% YOY) and should lead to some strong closed sale numbers in March. February was more pedestrian with 419 new listings (-3.16%), and pending sales were flat (up 0.86%), but closed sales went up 10.8% YOY and finished at 278. Looking at the true months supply number, we see a dry 1.3 months supply. Looking back, this is slightly better than last year’s 1.2 at this time, but the Minneapolis housing market is still strongly in favor of sellers to open Spring.
Conclusion: Housing Prices Will Continue to Rise, Just Not as Fast as Last Year
One of the silver linings for home buyers this year is that average days on market is showing times of lengthening. This should lead to increased inventory and absorption numbers (months supply), which should lead to some downward price pressure. However, the tide is still rising. When we factor in the dovish Fed, historically low interest rates sticking around, and our robust local economy, I’m predicting an increase in prices of another 5-7% this year. What are your thoughts? I’d love to hear them in the comments below.
Are you looking to purchase a home in Minneapolis this year? Don’t be discouraged by the competition in the Minneapolis housing market. Our buyer strategies will help you get a leg up on the general public. Drop us a line on the contact form to discuss, or feel free to call or email anytime.
Thanks for reading and have a great day!
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