While the COVID-19 outbreak will likely have ramifications for the Twin Cities real estate market in the coming months, April saw median prices surge past $300,000 for the first time.
The median sales price for the 7-county metropolitan area in April was $305,000, an 8.9 percent increase on the same month a year ago.
This is despite the coronavirus outbreak having closed down open houses and significantly reduced the number of house showings, though the Area Association of Realtors groups for both St. Paul and Minneapolis have noted that showings increased to the highest level of the year in late April.
Buyers are also experiencing record low interest rates, with the average deal struck on a 30-year mortgage being around 3.4 percent.
The record sales prices predominantly relate to deals struck in February and March, before the worst of the outbreak arrived, and there are signs of an impact from the virus that will be realized in the figures for May and beyond.
MAAR and SPAAR noted that there has been a 20.1 percent decrease in the number of buyers signing purchase agreements in April – meaning the deals haven't closed yet.
Meanwhile, there has been a significant drop of 22.9 percent in the number of new listings.
This is particularly pronounced in the affordable end of the market – new listings for houses for less than $190,000 falling by more than 40 percent, while homes valued at more than a $1 million saw a similar drop.
The smallest drop in new listings occurred in the $350,000 to $500,000 market, which saw a 7.8 percent fall in new listings.
Still, there are still signs of motivated buyers despite the virus and subsequent unemployment increase, with the cumulative days on the market for a listed home dropping 17.5 percent to 47 days.
"March started off strong and that strength returned later in April and into May; however, the latter half of March and the start of April saw set-backs due to COVID-19,” said Patrick Ruble, President of SPAAR.
"Realtors are busy, and we’ve seen gains for both buyers and sellers in late-April and May."
"We expected much of the pull-back resulting from COVID-19 would show up in April, so the shift isn’t that surprising," said Linda Rogers, President of MAAR.
"But showings are a leading indicator for purchase activity and they’ve reached new highs for the year. We expect this to translate into stronger sales activity once the health situation stabilizes."