In lopsided market, agents try to coax skittish homeowners to sell.
Real estate agent Ryan Ness filled his pocket with business cards one recent weekday afternoon and strolled down several blocks of homes in a Cottage Grove subdivision.
He knocked on front doors, searching for someone — anyone — who might be willing to sell. One by one, he was politely turned away. “They’re leery of the market,” said Ness, a 30-year-old agent with Coldwell Banker Burnet.
With the number of homes for sale at the lowest level in more than a decade, Twin Cities agents are finding themselves working harder than ever to find sellers, even while prices are climbing by double-digit rates in many areas. Some agents are blitzing neighborhoods with mailers: “I have a client who wants to buy your house!” Others are cold-calling homeowners by ZIP code.
The shortage of willing sellers is holding back what has been a promising recovery within the Twin Cities housing market, analysts say. Despite record-low mortgage rates and an improving jobs market, home sales dipped slightly in the metro area the past two months, as a growing backlog of would-be buyers can’t find what they want.
“The tables have turned, and buyers are hungry,” said Jed Kolko, chief economist for Trulia.com. “Buyers and agents are both desperate for sellers — and desperate times call for desperate measures.”
At the peak of the housing market in 2007, more than 34,000 properties were listed for sale in the metro area; today, less than 13,000 are available. New listings aren’t keeping pace with purchases, creating fierce competition in many communities as buyers try to outbid each other for a dwindling supply.
Overall, home prices reflect the rising demand. Last month, the median price of home sales spiked nearly 18 percent compared with last year, according to the Minneapolis Area Association of Realtors.
And yet, only a trickle of houses are being put on the market. Many homeowners — nearly one in five — owe more than the house is worth, forcing them to wait for prices to climb higher.
The shortage of available houses for sale has prompted a back-to-basics within the real estate industry, which has increasingly relied on technology to match buyers and sellers.
Like many agents across the Twin Cities metro area, Ness is finding a rather old-school approach works best to engage reluctant homeowners. Forget his iPad and blog; he’s putting on comfortable shoes and going door-to-door.
“What works for me is getting in front of people,” he said, noting that he has gotten several serious leads.
Tammy Chevalier, a sales agent with Keller Williams, is mailing letters to the owners of houses that suit the needs of at least three buyers in a handful of northern suburbs. Then, she plans to visit each of the recipients.
“I’m not giving up,” she said. “Eventually, someone will be ready, willing and able to sell.”
Nancy Maas of Coldwell Banker Burnet says homeowners are still feeling shell-shocked after having lost so much equity during the Great Recession. She’s so determined to find sellers that she will stop anyone she sees — whether they are raking leaves or walking their dog — to talk about the housing recovery and why it might be a good time to sell.
“What I do today is for the future,” Maas said. “You have to constantly be dropping seeds.”
Such strategies have worked well for Kamie Augustine, a sales agent with Keller Williams, who has sent thousands of unsolicited letters to homeowners in high-demand neighborhoods. She has focused much of her efforts on southwest Minneapolis and parts of Edina, hoping to stir activity in these high-demand areas.
She recently sent a couple hundred letters to homeowners in the Linden Hills neighborhood of south Minneapolis, including a wish list for seven individual buyers, three of whom were willing to spend up to $280,000 on a house that could be torn down and replaced with a new one.
She tries to be as specific as possible to make it clear that her buyers are real and to distinguish her letters from the others.