A sluggish November for home sales and stagnant fall inventory has given buyers the upper hand in the Twin Cities housing market — but it may be short-lived.
Sellers who put their homes on the market for fall hoping to fetch higher prices seen earlier in the year are becoming anxious after house hunters pulled back in October and November. That could benefit buyers as winter takes hold.
“There’s kind of a hangover of inventory from the fall that isn’t selling,” said Amy Jurek, a sales agent with Re/Max Advantage Plus. “Buyers seem to be back in the driver’s seat this winter. They have a decent amount of properties to choose from with amazing interest rates.”
Last month, 3,213 home sales closed in the 13-county metro, a 17 percent decrease from the same period a year ago, the Minneapolis Area Association of Realtors reported Wednesday. With fewer foreclosures in the mix, the median price of those sales rose to $205,000, a 5.1 percent increase from November 2013 but down from last summer, when the median nudged $220,000.
The November numbers suggest a return to normal seasonal patterns, which agents say will help move the market toward a balance of sellers and buyers.
“When comparing to last November, it looks like a slow down, but last November was different because it really still had a range of pricing, so people were scrambling to grab those low-cost homes,” said Emily Green, president of the Minneapolis Area Association of Realtors. “We are moving back to a traditional buyer and a traditional seller, which are those who really prepare for a purchase for months.”
New listings dipped 12.8 percent in November year-over-year, also suggesting a return of traditional winter behavior.
Jurek says price-sensitive buyers have about two months of market control before the spring inventory picks back up. “I would love to be a buyer right now because you are going to get a home on a discount,” she said. “If you wait until spring, you might be in to more of a multiple-bid situation.”
In the second-to-last monthly report of 2014, the year-to-date metrics dropped across the board. Nearly 46,000 home sales closed in the Twin Cities metro area from January to November, 7.6 percent fewer than the same period in 2013.
Twin Cities home sales this year have failed to keep pace with 2013 largely because there were fewer investors in the market. Distressed sales — foreclosures and short sales — represented just 13.4 percent of all closings last month compared with upward of 20 to 40 percent at various times last year.
Despite the slowed pace of sales, the housing market continues to see winners. Michael and Emily Slates recently hired Jurek to help them trade up to a larger house. The couple quickly sold a starter house they bought when house prices were nearly at bottom, and were able to convert that equity into a sizable down payment on a newly built house.
Bruce Erickson of Coldwell Banker Burnet says agents are struggling to discern who is in charge of the market at this point.
“It’s unpredictable. Experts think they are going to sell overnight, and they’re not selling overnight,” he said. “Sometimes it feels like it’s a seller’s week and a buyer’s day.”