It's been a year of low volume sales in the Twin Cities real estate market. Closed sales are down 25% from last year. Nearly all the indicators suggest we are moving towards a more balanced market: Inventory is down, pending sales have decreased, and days on the market have increased. However, when you look at the median sale price and housing affordability, it becomes evident that the market still favors sellers.
We've been in an inventory drought for quite some time now. What's unique about this recent market change, driven by interest rate hikes, is that both buyers and sellers have retreated, rather than just buyers. This has resulted in the supply-demand ratio remaining relatively unchanged. The big question on everyone's minds is when will it loosen up? Time will tell, but most experts, including ourselves, anticipate the current state of the market to continue another 2 to 5 years. That said, if inventory levels stay low, property values should remain relatively stable.
Below are the Twin Cities 7-County Housing Sales Stats from the Minneapolis Association of Realtors:
