Twin Cities homes are selling twice as fast as they did three years ago as buyers race to beat rising prices — and one another.
One-fifth of all houses sold for more than the asking price last month and one-fourth sold within two weeks of hitting the market, according to Redfin, a national real estate brokerage.
As the summer gets into full swing, some houses are moving so quickly — the typical Twin Cities house sold in 80 days vs. 160 three years ago —that sellers sometimes are shocked by the sudden resolution. “It was just unbelievable,” said Greg Brink, who sold his house in Golden Valley days before it hit the market.
This burst of activity is happening amid growing concerns about the pace of the recovery, as sales are down compared with last year. Agents say a brutal winter and fewer investors are partly to blame for the decline, but a lack of move-in-ready houses plays a huge role.
“The lack of supply is really starting to weigh on consumers and on sales numbers,” said Emily Green, president of the Minneapolis Area Association of Realtors.
The limited housing choices are forcing would-be buyers to make mad dashes to get the home they want, agents say. Holly Connaker, an agent with Coldwell Banker Burnet, sold a townhouse in Maple Grove after it was on the market two days.
“There were 10 showings in 24 hours with four offers,” she said. The house was listed for $135,000, but sold for $143,000.
With inventory still hovering near record lows, many buyers have been waiting for a better selection. Brink and his wife, Elena, wanted to spend more time at their Florida condo but didn’t want to sell their house until they found another one. After months of searching, they made an offer on a townhouse in St. Louis Park, then started getting their five-bedroom house ready for sale.
Their agent, Dan Basil, told them that the houses that are selling the fastest are those in tiptop shape, so they spruced up the yard with 100 bags of mulch and decluttered the house. Days before the house was to hit the market, someone who heard about it from a friend made an offer for more than their $424,900 asking price.
“I knew that it would go quickly, but I didn’t think it would go that fast,” Brink said.
Because home values are at their highest level since 2008, fewer people are upside down on their mortgage, enabling them to sell their home and buy a more expensive one. That’s slowly helping replenish inventory, and at the same time it stirs more demand.
For the past two months the number of houses on the market has increased, but not enough to keep pace with demand in some areas. “Yes, there’s more inventory,” Green said. “But not in all areas or price points.”
There’s been another change in market dynamics because of higher prices and declines in foreclosures: Fewer investors are on the prowl for cheap houses to rent or flip. Only 626 of the 8,500 new listings last month were of the lender-owned variety that tend to attract those bargain hunters, a 44 percent decline and the lowest in a decade.
With first-time and move-up buyers replacing those investors, the competition is especially fierce in communities with coveted school districts that are close to shops, parks and jobs. In Edina, the typical house is selling in 63 days compared with 96 last year.
And with empty nesters and young professionals looking for a more urban lifestyle, downtown Minneapolis has become one of the tightest markets. Properties in that area sold within just 71 days and many sell without ever hitting the market, including a riverfront condominium that recently sold for more than $3 million.
In southwest Minneapolis, minutes from downtown and several popular lakes, house prices now exceed pre-crash levels.
Kristy and Matt Wesson decided to shop for a bigger house after 10 years in their south Minneapolis Tudor. “While we love it, we were simply outgrowing the space,” Kristy Wesson said.
They couldn’t find anything nearby that fit their needs, so they bought a bank-owned property on the next block and are replacing it with a new one to fit them and their three kids.
At an open house at their for-sale home last weekend, the turnout was overwhelming: more than 30 people toured. “Considering the low inventory in our neighborhood,” Wesson said, “we hope to sell it fairly quickly.”