B's Blogs November 10, 2022

Sales Slow as Real Estate Market Enters Off Season

Buyers gain bargaining power as homes sit on market longer
MINNEAPOLIS (November 10, 2022)
— As the selling season slowed in October, closed sales slipped almost 31% compared to a year ago. New listings also decreased, falling 19% below last year with 6,883 properties coming on the market. The median sales price was up nearly 4% to $320,000, although sellers were receiving slightly less than their asking price on average, down about 2% from October 2021. Homes were sitting on the market longer, up 20% to 36 days on average. Slower moving inventory pushed the number of homes for sale up 5.5% to over 13,000 properties across the state. Overall, there was two months’ supply of available housing inventory in October, up 25% over last year, marking the second straight month where inventory hit levels not seen since 2020.

“The seemingly sharp decline in closed sales actually reflects a return to more normal seasonal market conditions after two years of unusually high activity,” said Chris Galler, CEO of Minnesota Realtors. “All the fundamentals remain strong, and the real estate market is robust. Of course, factors like inflation and climbing interest rates are impacting some consumers’ ability to purchase a home. This is especially true for first-time homebuyers. But overall, we’re seeing a normal shift for this time of year. As properties are priced properly for local market conditions, buyers are better positioned to negotiate and purchase a home. Higher inventory levels are opening more choices within a more affordable price range. If you’re ready to buy, this is a good time to enter the market.”

October year-over-year summary of key market indicators:  

  • Closed sales decreased 30.7% to 6,137

  • Median sales price increased 3.8% to $320,000

  • Average sales price increased 5.6% to $374,990

  • New listings decreased 19.1% to 6,883

  • Pending sales decreased 33.5% to 5,373

  • Days on the market increased 20.0% to 36 days

  • Homes for sale increased 5.5% to 13,231

Closed Home Sales Across Minnesota by Region 

In October, closed sales declined in all 13 regions compared to a year ago, bringing Minnesota’s average number of closed home sales down 30.7% year over year. The smallest declines were seen in Upper MN Valley at 7.3%, Arrowhead at 17.0%, and West Central at 17.1%. The largest declines were reported in Northwest at 34.6%, Headwaters at 37.3%, and Southwest Central at 37.8%. See the chart below for more details comparing closed home sales for October 2022 to October 2021.

About Minnesota Realtors® 

Minnesota Realtors® (MNR) is the membership organization supporting all 22,000 Realtors® in the state of Minnesota. MNR is dedicated to helping Realtors® succeed in providing comprehensive and informed guidance to their customers seeking to buy or sell a home. MNR provides Realtors® with a code of ethics, continuing education, real estate transaction forms, legal services and dispute resolution, as well as lobbying and advocating for homeownership rights and the real estate industry. MNR works in partnership with the National Association of Realtors, as well as more than 15 affiliate regional associations within Minnesota. MNR is a non-profit organization founded in 1919, with headquarters in Minnetonka, Minnesota, and a branch office in St. Paul, Minnesota.