2018 has started without any indication that the Twin Cities housing market will cool the heck down.
The Minneapolis Area Association of Realtors (MAAR) says that January saw fewer new listings come on the market than January 2017 – squeezing an already dehydrated housing market.
Why is it a nightmare for buyers?
Your heart goes out to anyone buying their first home in this market, as they are dealing with a trifecta of conditions hampering their ability to get on the housing ladder.
2017 was a record-setting year in three ways that favor sellers over buyers:
- Available housing fell to a 15-year low.
- Closed sales reached a 12-year high.
- Median sales price reached an all-time high.
Add those together, and it means that buyers need to act almost instantly a house comes on the market, with MAAR saying they are facing "a competitive environment where multiple offers have become commonplace."
"Sellers are receiving strong offers close to their original list price in record time, which can sometimes frustrate home buyers," MAAR says in its January report.
Closed sales actually dipped in January compared to last year, MAAR says, because the number of houses for sale declined.
People are buying before houses built
Another sign that the housing market is ridiculously competitive is the increasing number of people buying homes before they've even been built.
MAAR says across the Twin Cities metro, pending sales for new constructions rose almost 14 percent last month compared to a year earlier, with townhomes particularly popular.