Twin Cities home sales slipped in July amid tight supply; prices remain at record highs

Home buying in the Twin Cities during July slipped a bit compared with the same time last year, but with houses selling twice as fast this summer, prices increased double digits.

During July there were 6,202 pending home sales, 11% fewer than last year but nearly equal to 2019, according to a joint monthly sales report from the Minneapolis Area Realtors (MAR) and the St. Paul Area Association of Realtors (SPAAR).

Comparisons to last year have been slightly skewed by the pandemic, which caused a lull in spring 2020 and then an unusually busy summer. But agents say the market is now back to its normal seasonal pattern.

"We're returning to a more typical market in line with the past five years," SPAAR president Tracy Baglio said in a statement. "Overall, sellers are still firmly in control of this market."

In addition to a decline in pending sales, sellers have been more active in recent months. During July there were 8,139 new listings, nearly 1% more than last year. That was the fourth month in a row new listings were up compared with the previous year.

Still, buyers outpaced sellers in much of the metro and houses sold more quickly and for more than sellers were asking. On average, houses sold in just 19 days last month, down from 41 days a year ago and 38 days in July 2019.

And with multiple offers still common, buyers paid on average nearly 4% more than the list price. As a result, the median price of all closings during the month was $350,000, a nearly 12% increase over last year and a tie with June for an all-time high.

Throughout the Twin Cities, demand varied by community, price point and property type. Houses that were priced at $250,000 to $350,000 sold the fastest and those were priced at more than $1 million tended to sell slowest.

Single-family houses posted the biggest price gain, especially in several inner-ring suburbs where listings have been most scarce. Increasingly, agents say, buyers are shopping in outer-ring suburbs, where price gains have been more modest and houses are taking longer to sell.

James Kenna, a Twin Cities real estate agent, said that in Dayton, an outer-ring western suburb, said houses there are taking about twice as long to sell compared with those closer to the Twin Cities.

In early July, he listed his own nearly-new house for $549,900 and has yet to get an offer. In nearby Maple Grove, he said such houses are selling in just days, and sometimes hours. So he recently cut the price by $15,000 and is now getting more showings.

"I'm fairly confident that things will pick up going into fall," he said. "We were only doing a showing a week in the summer. I had four this last weekend alone."

New listings, however, were down slightly. Chris Galler, CEO of Minnesota Realtors, attributes that decline in part to concerns on the part of sellers who worried that he wouldn't be able to find a home to replace the one they sold.