What is Going on with the Housing Market in the Twin Cities?!
We have an extreme shortage of inventory right now. A lack of listings. Let's take a look at what is causing this - what are the effects - and what can be done about it.
As you'll see in the graph above, we have a -$47% drop in homes for sale in January compared to 2020. The graph is a live feed of Hennepin County. That's 1/2 the number of homes to choose from! That's insane. Many buyers are building new because they can't find a house to buy - great news for builders but what about the rest of the market?
What is causing this?
Our theory is a number of factors and they're mainly related to phycology.
As a society have been beaten-down (mentally and emotionally) over the past year.
The Corona Virus has many of us exhausted. Many people are literally waiting for this to be over. That means they aren't doing much.
We know a lot of people who are planning on leaving MN. They are done/finished with the riots, the uptick in crime, the weather, carjackings and the political atmosphere. They will be selling, but on their own timing.
The election was another stressful time to end and start the new year.
There is also a lot of chatter about a stock market (not a housing) correction.
This all translates to uncertainty. What do people do when they're unsure? Nothing.
Then, there are those who are ready and excited to make a move, which includes selling their home and searching for the next one... They look around on the internet and see this >>
That's not a lot of options! So, what do they do? Nothing, why wait.
What is the Effect?
We are in some Temporary Stagnation. That's obvious so let's not dwell on that.
What Can We Do?
We are all about solutions and action! Did you know, we entered real estate in 2006. We
were just getting out feet wet when all of a sudden, banks started closing in 2007 and the market went into a tail-spin. Not to worry people! This is just a bump in the road. The market doesn't always lineup with our timing and expectations OK? Relax.
This is your life and if you have plans that includes moving to a new house - don't let FEAR get in your way. Remember, we're here with you during the journey.
Have a little Faith
Every home-sale has unknowns. There are no guarantees that anything will workout 100% perfect. Know that there are a lot of homes that will be hitting the market in March and all summer long. We know - we have a big pipeline of sellers that are getting ready. Most likely, we'll have a crazy fall as well. We call this a lagging market, very common since about 2014.
See the Bright Side for a Change
You can't always be a pessimist. Do you have any idea how much your home will sell for? A LOT! Just to give you an idea, we have made our sellers over $150,000 over the
asking price in the past 12-14 months. We are selling, on average, over 105% of the list to sale price. Oh but then you're already mumbling, "yay but I'll pay more when I buy too.." Come on people. Upgrading your home is a lifestyle decision. You'll have a double win. That means, you'll sell high and you'll have a new a better place to live. You might not get a triple-win, which would be Sell high, buy low and get your dream home.
Make a plan
Start by calling Sean and Blanca and scheduling a free consultation. If you don't end up selling, that totally fine! This is what we do. One of our main strategies for when you sell is negotiating a longer (or flexible) closing date. This gives our sellers more time and peace of mind so they can find the next house.
We are your partners in the journey. We are another set of eyes and ears. We are your FOB (Forward Operating Base). We're your boots on the ground. We're your special agents. We're ... ok you get it. But all kidding aside. We help our clients see their blind spots. We run the numbers, we give you all of your options. We point out the hidden factors (good and bad) that you might not see. This is why we have a thriving business.. Don't be shy, call us. Here is a link to The Ultimate Seller Checklist
The Good News
Rates are still low (but creeping up).
High rental prices will keep buyers eager to pay good prices for listings
Spring is near and March Madness will bring new life to the market
The warmer weather and the Parade of Homes will push people to list their homes and add great new listings to the market.
This housing shortage is nationwide. We didn't want you to think that this was unique to MN.
That's it. We hope that this blog post put things into perspective for you. Follow us Call us!
Sean and Blanca