Twin Cities Housing Market: April - 2020
Home builder confidence nationwide suffered the largest month over month decline in the history of the index, in April.
Despite COVID-19’s direct impact on showing volume in the Twin Cities in March, pending sales continued their upward trend with a 22% increase and the median home price moved up 5% for closed sales suggesting that despite the COVID-19 crisis, the Twin Cities housing market cycle remains intact.
COVID-19's Impact on Showing Activity: The pandemic’s impact began to show up around March 7th as rapidly inclining showing activity leveled off. Activity then started declining around March 13th and fell dramatically until about April 2nd. Since April 2nd, activity has recovered significantly but is still off 16% from the peak in March and remains behind the year over year activity level despite a stronger start. If any of you would like me to expand further on the different continua that I believe are at play here, feel free to connect with me by phone or email.
Mortgage Rates: Mortgage rates have stabilized near all-time lows over the past few weeks as the market searches for direction through the fog of both unprecedented monetary intervention from the Federal Reserve and unprecedented fiscal stimulus. While financial markets initially rallied on the news of Federal Reserve support and now appear to be showing initial improvement due to the Senate’s passage of a new small business stimulus, a deep economic contraction continues to loom and uncertainty about the formation of the recovery remains.
Home Builder Confidence: The NAHB housing market index in the US collapsed to a 30 in April. That was the biggest monthly decline in history, the lowest number since June of 2012 and was well below market forecasts of 55.
Closed Sales: We had 4,182 residential closings take place during March. That was up 37%, month over month as expected and up 12% year over year.
The Median Home Price: The Twin Cities’ median home price moved up 5% in March to $297,000 USD. That was also up 8% year over year and up 42% over 5 years and is a new record high.
New Listings: The number of new listings increased by 36% in March with 7,304 new homes and condo listings. That was also up 17% year over year. I think that some of that year over year increase was home sellers trying to get their homes sold ahead of the unknowns of what seemed to be a looming shut down of commerce by executive order.
Homes for Sale: The home inventory level only moved up 5% in March to 8,846 units. That is down 9% year over year and remains near the record low.
Pending Sales: Pending sales volume moved up 22% in March to 5,152 contracts. That was up 11% year over year. I think that some of that year over year increase was also buyers looking to hurry up and buy ahead of the unknowns of what seemed to be a looming shut down of commerce by executive order.
By Nick Leyendecker, Founder | Broker | REALTOR®