Twin Cities Housing Market: December - 2020
One of the three primary impacts that the pandemic has had on the Twin Cities housing market (besides record low mortgage rates caused by monetary intervention and waves of migration from the city to the suburbs) has been a reduction in the volume of new listings, as fear and/or economic uncertainty has caused many people who were thinking of selling or moving in 2020 to put things on hold. With that side effect of the pandemic exacerbating the already seasonal trend of declining inventory, the number of homes for sale in the Twin Cities metro has just fallen below 7,000 units for the first time in recorded history.
Mortgage rates have been steadily declining since November of 2018 and have fallen 50% over that time. If that trend continues, the market is set up for another massive move up in housing prices when demand trends back up in the spring of 2021.
Mortgage Rates: Mortgage rates in the U.S. continued to trend downward through November and December and currently sit at a record low of 2.67% for the average 30-year fixed mortgage.
Home Builder Confidence: The NAHB housing market index in the US fell to 86 in December of 2020 from a record high of 90 in November and compared to forecasts of 88. “Housing demand is strong entering 2021, however the coming year will see housing affordability challenges as inventory remains low and construction costs are rising,” said NAHB Chairman Chuck Fowke.
Closed Sales: The Twin Cities market had 5,658 closings in November which is down 20% month over month but up a whopping 19%, over November of 2019.
The Median Home Price: The median home price fell 2% to $310,000, for closed sales in November. That is up a massive 11%, year over year and up 43% over the past 5 years.
New Listings: 4,061 new listings hit the market in November. That is down 42%, month over month, but still up 2%, year over year.
Homes for Sale: Housing inventory continued to decline in November as the month ended with a record low, 6,770 active listings. That is down 22%, month over month, down 37%, year over year and down a whopping 53% from the inventory level 5 years ago.
Pending Sales: Pending sales volume continued to slow in November with 4,669 homes, condos and townhouses having fallen under contract in November. That is down 27% month over month but still up 14%, year over year.
Showing Activity: Showing activity returned to normal in June and is now almost perfectly mirroring year over year trends.
By Nick Leyendecker, Founder | Broker | REALTOR®