Following a trend established earlier in the summer, July saw pending home sales drop 4.2% from a year earlier in the Twin Cities metro, according to a report issued by Minneapolis Area Realtors and St. Paul Area Association of Realtors, though some Realtors remain hopeful given an increase in new listings that have hit the market.
May and June saw pending sales in the metro decrease 5.0% and 10.8% respectively in the metro. These dwindling sales stretched across asset types in June, affecting single-family homes, condos and townhomes.
According to a statewide report on home sales from Minnesota Realtors, the lull hasn’t been isolated to the metro; pending sales dropped 5.4% across Minnesota. This follows a 13.2% drop that happened in June.
Meanwhile the median sale price for the metro sits at $385,000 up 2.7% from this time last year, but down from last month’s $390,000. Statewide home prices were up about 4.1% to $353,000.
Geri Theis, the president of the Minnesota Realtors said in a Thursday interview that she is hearing “good things” about interest rates going down and that has been cause for some optimism.
“The last two weeks with there being so much more talk about those interest rates dropping, our area has picked up a lot,” Theis said. “I think those numbers are going to look pretty good in the next month, I do think people keep an eye on it and they’re watching and they’re waiting for that to happen.”
According to the MAR/SPAAR report, new listings were up 7.2%, an uptick that MAR President Jamar Hardy said will hopefully help lead to a more balanced market. The statewide report showed that there was a 2.8-month supply of inventory, a 12% increase from this time last year, while the metro supply sat at 2.4 months up 14.3% from last year.
Hardy said that the potential of an interest rate decrease without a good amount of supply built up is going to create a lot of competition, which conversely may drive up principle costs just when rates go down.
“The one thing that will ultimately make the affordability metrics jump even higher is now I’m competing,” Hardy said. “Now I’m back to where I was a year ago, 18 months ago where every house has five offers on it. Or even four. Like that really can make people start overpaying for houses again versus really getting the true value. If I’m a buyer right now and I need to buy something, I’m not going to wait until November to do this.”
Last month saw flooding hit Mankato, though the sales were not affected by the extreme weather, according to the statewide report. The south-central region actually saw an 11.4% increase in price from this time last year to $278,000, saw an 8.9% uptick in listings, and supply of inventory sat at 2.7 months.
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