New Home, Luxury Home Sales On The Rise
Sales of new homes surged in July even as the overall number of home sales in the Twin Cities stagnated, according to data released Thursday by the Minneapolis Area Association of Realtors.
Buyers purchased 6,242 homes in the 13-county metro area in July, compared with 6,245 in July 2017. Sales of existing homes were nearly identical to the same time last year, while sales of new-construction homes grew by 14 percent. New construction accounted for 8.7 percent of July sales, the highest percentage of total home sales in July since 2008, according to David Arbit, MAAR’s research director.
Pending sales, an indicator for the housing market, were up 0.4 percent to 5,894 homes.
For the year to date, closed sales are down 5.6 percent from the same period in 2017.
The two most active portions of the market outside of new construction were in new listings of condominiums and sales of luxury homes. New condo listings jumped 15 percent in July compared with the previous year, Arbit said. MAAR data did not show any particular new condo developments driving that increase.
Luxury home sales might be on pace to set a record in 2018. As of the end of July, 619 homes priced at $1 million or higher had sold in the Twin Cities this year. That is an all-time record for the first seven months of the year, beating the previous record of 507 in 2005.
“Luxury is rallying,” Arbit said in an interview.
The median price for all homes sold last month was $268,000, up 6.6 percent from $251,500 from July 2017. But that figure is down from May and June, when the median selling price in the Twin Cities was greater than $270,000.
The normal range for year-over-year price increases is 5 to 7 percent.
One July number that may have Realtors and buyers feeling hope that there will be more home choices in coming months was a jump in the number of new listings. Sellers listed 7,671 homes for sale in July, a 4.1 percent increase over 2017.
“My number of active listings has literally quadrupled since earlier in the year,” said MAAR President Kath Hammerseng in a Thursday interview.
Still, the supply of homes for sale in July was at 2.4 months, down from 2.7 months. Generally, a five-month to six-month supply is considered a balanced market. The number of homes on the market in July was 11,709, down 13.5 percent from 13,538 a year earlier.
Sellers received an average of 99.8 percent of their listing prices in July, up from 99.1 percent a year ago.
The average number of days to closing a home sale during July was 38, down from 46 days a year earlier.
On the homefront
Prices, listings on the rise in July
Jul-18 % chg from July 2018 Year-to-date % chg from 2018 Median sales price $268,000 6.6 $265,000 8.2 Closed sales 6,242 0 33,428 -5.6 Pending sales 5,894 0.4 36,761 4.9 Days on market 38 -17.4 49 -15.5 % of original price received 99.8 0.7 99.5 0.8 Inventory of homes for sale 11,709 -13.5 na na
Source: Minneapolis Area Association of Realtors