Slim pickings put a lid on home sales in the Twin Cities metro last month, the Minneapolis Area Association of Realtors said Wednesday.
In February, 3,969 home buyers signed purchase agreements, just a half-percent gain from a year ago. Closings were flat and the median price of those closings jumped 7.6 percent to $223,000.
The situation is creating significant competition among buyers, mostly first-time buyers who are shopping for a house in Minneapolis and St. Paul neighborhoods and in inner-ring suburbs where listings have been scarce and there's been virtually no new construction because of a scarcity of developable land.
Cotty Lowry, president of the Realtors group, said that sales activity was off to a healthy start for 2017, but he added, "We need more sellers."
There were 5,418 new listings in February, 7.5 percent fewer than a year ago. At the end of February, there were only 8,820 listings on the market, a 25 percent decline and the lowest level in 14 years.
Sellers market
In many communities sellers are receiving nearly, or more than, their asking price, and houses are selling in less than a month.
"Diminishing gains on the demand side could already reflect the dramatic supply shortages that today's home buyers are experiencing," Lowry said. "It's critical to aim for balance — where neither buyers nor sellers have a clear advantage."
On average, houses sold in 82 days, 14.6 percent faster than last year. And at the current sales pace, there are enough houses on the market to last only 1.8 months, according to the association's latest data. That was the second lowest figure on record for any month since January 2003. A five- to six-month supply is considered balanced.