Two months into the year, sellers remain in control of Twin Cities housing market

Two months into the year, there are still more buyers than sellers of homes in the Twin Cities metro, and that's stifling sales and driving price gains.

During February sellers listed 4,427 properties, 7.3% fewer than the same time last year, according to a monthly report from the Minneapolis Area Realtors and St. Paul Area Association of Realtors.

With fewer options and fierce competition, buyers signed only 3,809 purchase agreements, a 10.5% decline over last year.

"While we may not reach the heights of 2020 and 2021, the market remains competitive, homes are still selling rapidly often with multiple bids, and buyers and sellers need to be prepared to move quickly," said Denise Mazone, president of the Minneapolis Area Realtors.

With fewer houses hitting the market and buyers still on the hunt, there were were only 4,361 houses for sale at the end of the month. That was nearly 20% fewer than last year and nearly a record low.

The shortage of listings is putting buyers on the defensive, forcing them to make quick decisions and offers that are more than many sellers are asking. On average sellers got 100.7% of their asking price, a slight increase compared with last year. And houses sold in 42 days, a nearly 9% increase.

Those competitive, over-list-price offers have pushed prices to new highs. Last year, the median sale price of a house was $314,000; this year, buyers paid $26,000 more.

"Homeowners have gained significant equity, particularly over the last few years," Mark Mason, president of the St. Paul Area Association of Realtors, said in a news release.

Agents say that while prices are still rising at a significant clip, price gains are running at about half the level they were in previous months. And with mortgage rates on the rise in recent weeks, many buyers are feeling a renewed sense of urgency.

On Thursday, Freddie Mac's weekly mortgage rate survey showed that the 30-year fixed-rate mortgage averaged 3.85 %. That was a slight increase over the previous week after two weeks of declines and nearly a full percentage point higher than a year ago.

Sales trends were similar across the state, with an 8.5% decline in listings, a 10% decline in pending sales and a nearly 8% increase in the median sale price, according to a February report from the Minnesota Association of Realtors. In all but a couple of the 12 geographic regions that are tracked by the group, there were fewer new listings — and closings — compared with last year.