The national unemployment rate is 4.1% for October trending steady. 

October Year-Over-Year Statewide Summary of Key Market Indicators:

• Closed sales: 6,141 (up 2.9%)
• Median sales price: $347,500 (up 5.3%)
• Average sales price: $404,815 (up 5.1%)
• New listings: 8,005 (up 9.1%)
• Pending sales: 5,835 (up 10.4%)
• Days on the market: 42 (up 10.5%)
• Homes for sale: 16,281 (up 8.2%)

Looking at the region, Bemidji is the largest market in the area and a good indicator of the subject's market. Over the longer term, demand continues to outpace supply of residential properties. The following five year charts indicate the local residential real estate market remains robust.

The following key indicators give a more recent perspective with regard to market action.

Days on Market is the median or average number of days between when a property is listed and when an offer is accepted in a given month. Days on Market (DOM) indicates market strength overall and is also a measure of aggressiveness with regard to pricing. Historically 90 days on market indicated a balanced market but 40 days is more reasonable considering the market strength over the last 5 years and the recent monthly trend. The median DOM for the City of Bemidji in October was 37 days trending steady.

The pending sales to new listing ratio is a leading indicator of future price direction. This ratio sheds light on how well the market is absorbing inventory. My analysis indicates a ratio in the 50% to 60% range reflects a balanced market with little price movement. A ratio below 50% indicates a buyer's market with a large supply of homes and low demand. Ratios moved below 50% in 2005 preceding the Great Recession and were a leading indicator of the 5 year price correction that followed. A ratio above 60% indicates a seller's market with low supply and high demand. As can be seen in the center chart above, this ratio has been well over 60% year after year for the previous five years indicating a robust market with upward pressure on prices for the Bemidji area.

Due to the valuable insight the pending sales to new listing ratio provides, I also analyze it on a monthly basis. For October, the pending sales ratio is 92% illustrating that continue to have a seller's market. The larger markets to the south also exhibit continued strength on this metric. The following chart represents the pending to new listing ratio for the City of Bemidji over the last 13 months. I have adjusted the December 2023 ratio to 100% due to insufficient market data.

Please be aware that the 5 year median sale price chart previously displayed is a measure of the "middle" price of homes that sold, meaning that half of the homes sold for a higher price and half sold for less. While this chart in general indicates price trend, it is inferior to paired sales analysis because it is affected by the composition of homes that have sold. For example, a shift in demand toward lower priced homes would cause the median to decline even if the value of each individual home is rising. The median residential sale price for the City of Bemidji is up 9.6% year over year.

The months supply of housing is another indicator of current market strength. This is the inventory of homes for sale at the end of any given month divided by the average monthly pending sales from the last 12 months. The months supply at the end of October for the City of Bemidji was 4.9 months trending steady.

John Gustafson

Certified General Appraiser

Market Update

October, 2024