House prices in Minnesota continue to rise despite skyrocketing unemployment caused by the COVID-19 pandemic.
The report for April by Minnesota Realtors found that median home prices hit $275,000 last month, a 9.4 percent increase on April 2019.
Furthermore, sellers received 98.8 percent of their asking price, while the average days on the market fell by 12.7 percent to just 48 days.
Minnesota Realtor says the market is showing "surprisingly resiliency" given that more than half a million Minnesotans have applied for unemployment insurance following the COVID-19-related shutdowns, which in turn prevents realtors from holding open houses.
This in turn has seen many companies invest in their websites and launch virtual open houses and showings.
Similar price resiliency can be seen in the Twin Cities, where the Minneapolis Area Realtors Association said that median prices increased by 8 percent to $297,000 as the pandemic unfolded in March.
However, there are signs that there will be some long-term pain for realtors, with the number of homes being newly listed for sale down 25.8 percent in April compared to a year early.
Limited housing supply is nothing new in Minnesota particularly in recent years, but this is now coupled with a 20.5 percent drop in pending sales, which is the first month in the last year that has not seen a year-on-year increase, with the pandemic seemingly causing people to delay moving house.
That said, those that are buying have the benefit of extremely low interest rates, following cuts by the Federal Reserve as the coronavirus spread across the U.S. and hit financial markets.
"Sellers who contemplated listing in the spring, put their plans on hold waiting to see how the pandemic would evolve," said Chris Galler, CEO of Minnesota Realtors, who is warned it may take a while for the market to return to pre-COVID levels with so many out of work, furloughed, or seeing their hours reduced.
"Interest rates are good and after being locked inside for 60 days, some will have taken the opportunity to prepare their house for market," he said.
"That doesn’t mean we’ll see marketing activities as we had before the virus. Consumers will be leery of ‘business as usual' in the near term."