The big story of 2016 was twofold: the median sales price reached an all-time high; while closed sales reached an 11-year high. Closed sales nearly broke their all-time record, but fell 0.3 percent short of their all-time 2004 high. Seller activity declined 1.1 percent. Near-record sales activity combined with flat-to-weaker seller activity created a supply shortage. Active housing supply levels fell to a 14-year low. This shortage has created a competitive environment where multiple offers have become more common. Sellers are receiving strong offers in record time, but this fast-paced market can frustrate some consumers. Days on market fell to a 10-year low. Absorption rates fell to 1.6 months of supply at year-end, a record low. Foreclosure activity fell for a fifth straight year and is back below 2007 levels. Although single-family homes made up about 75.0 percent of all sales, both townhomes and condos showed a stronger increase in sales. Similarly, previously-owned homes made up about 93.0 percent of sales but new construction showed a much stronger increase.
2016 by the Numbers
- Sellers listed 76,531 properties on the market, a 1.1 percent decrease from 2015
- Buyers closed on 59,988 homes, a 6.2 percent increase from 2015 and the highest figure since 2005
- Inventory levels for December fell 26.3 percent to 8,197 units compared to 11,125 in 2015—a 14-year low
- Months Supply of Inventory was down 30.4 percent to 1.6 months, also a 14-year low
- The Median Sales Price rose 5.5 percent to $232,000, which is an all-time record high
- Cumulative Days on Market declined 15.8 percent to 64 days, on average (median of 33)—a 10-year record low
- Changes in sales activity varied dramatically by market segment
Single-family sales rose 5.1 percent; condo sales rose 9.5 percent; townhome sales rose 9.9 percent
Traditional sales rose 10.0 percent; foreclosure sales fell 25.0 percent; short sales fell 31.1 percent
Previously-owned sales rose 5.7 percent; new construction sales rose 14.9 percent
“The most important achievement of 2016 was erasing the losses in prices and equity caused by the downturn. As sales surpassed their 10-year high, Twin Citizens demonstrated that they are just as committed to homeownership as ever. There are some manageable challenges, but a favorable affordability picture, attractive rates, job growth and wage growth will continue to sustain a healthy real estate market,” said Cotty Lowry, President of the Minneapolis Area Association of REALTORS®.
“We reached some key milestones last year, and hope to continue with this momentum in 2017. It is a great time for those considering listing their home, as buyers are looking for more options. With median sales price at an all-time high, now is a great time to find out the current value of your home,” said Tina Angell, President of the St. Paul Area Association of REALTORS®.