The Real Estate Housing Supply Update for June 2023

Minneapolis Real Estate Market Overview: June 2023

Greetings, readers! As a seasoned Minnesota realtor, I constantly monitor the local housing market trends to better understand the dynamics that affect both buyers and sellers. This month, I'm sharing some critical insights from the Minneapolis Area Realtors May 2023 report. Let's dive into the specifics.

Boost in New Residential Construction

In line with the shortage of existing-home inventory, we've noticed a significant increase in the demand for new residential construction. Surpassing economists’ predictions, monthly new-home sales rose 4.1% to a seasonally adjusted annual rate of 683,000 units — the highest since March 2022. Housing starts were up by 2.2%, indicating a healthy rise in both single-family and multifamily construction. This positive growth, along with permits for future single-family homes reaching a 7-month high, shows promise for those looking to buy new properties in the Minneapolis area.

Housing Market Trends

Despite the surge in new constructions, the 12-month period from June 2022 to May 2023 saw a 26.3% decrease in Pending Sales in the Twin Cities area. Interestingly, the price range with the smallest decline in sales was the $1,000,001 and Above segment, where sales decreased by a comparatively smaller 14.9%.

The overall Median Sales Price, however, witnessed a 4.0% increase to $364,000. Townhomes led the pack with the most significant price gain, with prices increasing 7.1% to $294,500.

In terms of sales speed, properties in the $250,001 to $350,000 range sold the quickest, averaging 31 days. On the contrary, properties in the $1,000,001 and Above range tended to sell the slowest, averaging 68 days.

Inventory Levels

Overall, housing inventory levels were down by 9.0%. However, the Townhomes segment displayed resilience with a 4.1% increase in inventory. As a result, the supply duration amounts to 1.7 months for Single-Family homes, 1.7 months for Townhomes, and 2.8 months for Condos.

What's Selling Best?

The data indicates that the market with the strongest sales were homes in the $1,000,001 and Above price range. Also, Townhomes emerged as the property type with the strongest sales. With respect to the construction status, new constructions demonstrated the highest sales activity, marking the shift in buyer preferences in the face of limited existing-home inventory.

Wrapping Up

The local housing market is complex and constantly evolving. Understanding these market trends helps us, as realtors, serve our clients better, ensuring they make well-informed decisions. Despite the decrease in overall sales, certain segments like Townhomes and the new construction market have proven resilient, offering promising opportunities for buyers and sellers alike.

Stay tuned to our blog for the latest real estate insights, and feel free to reach out to us with your real estate inquiries. We're here to assist you with all your property needs.

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