MANKATO — After seeing existing home sales — along with home prices — soar since early last year, the housing market has cooled in September and October.

“Our market, in a nutshell, is a lack of inventory,” said Erik Jensen of American Way Realty in Mankato.

While the number of sales has fallen here and around the state, home prices continue to stay high.

In south-central Minnesota, 206 homes sold in October, down 21.4% from the 262 sold last October. Still, home sales were up 24% compared to October of 2019.

The median sales prices for area homes jumped to $233,300, up nearly 10% compared to last October and up 33% from 2019.

There were 201 new listings in south-central Minnesota in October, up some from last October but down from October 2019.

Realtors say part of the reason for a low inventory of homes for sale is that construction costs are so high, meaning fewer people are willing to sell their home and build a bigger one.

Sales also slipped in September year over year.

Jensen said there aren’t as many multiple bids or people driving the bids up higher than the asking price, which was more common when the market was red hot.

“There are some multiple offers still, but not like it was. If homes are priced appropriately, they’re still going quickly.”

He said the $225,000 to $275,000 range is the biggest chunk of sales locally. “We used to have a lot of $150,000 and under, but those are very rare now.”

Jensen said that home sales are traditionally slow starting with Thanksgiving and through most of the winter.

“People are busy with the holidays and it’s cold out. And it gets dark at 5 o’clock, so it’s harder to show homes and have people get a good look around the outside.”

Statewide, October closed sales dropped 16.2% compared to the previous October, according to Minnesota Realtors.

This shift was reflected in the number of homes for sale, which shrank 18.6% over last year, with just 11,696 properties on the market statewide. New listings sank 10.2% to 8,428.

Overall, there was only 1.5 months of inventory available, down 21% from a year ago.

Buyers who remained active continued to compete aggressively for homes, pushing the median sales price up 8.2% to $308,500 statewide.

On average, sellers were receiving 99.7% of their asking price.

“The extraordinary number of closed sales we saw in October 2020 was really a historic outlier. This month’s numbers are more closely aligned with expectations for the fall,” Chris Galler, CEO of Minnesota Realtors said in a press release.

“Buyers who are still in the market are highly motivated to close, and willing to pay more. Interest rates remain low, so if the overall rate of inflation in the economy at large is kept in check, we will likely see resurging closed sales in the spring.”

During October, buyers across the 16-county Twin Cities metro signed 5,745 purchase agreements, down 10.2% from last year. At the same time, sellers listed 6,192 properties, a 11.5% annual decline, according to The Star Tribune.

Despite those declines, houses sold more quickly in the Twin Cities than last year and for much higher prices. The median price of all closings during the month was $340,000, a 7.9% gain.

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