The Minneapolis housing market would usually be in a deep freeze by now, but just the opposite is taking place. Buyers signed nearly 16 percent more contracts to purchase existing homes at the end of November than at the same time a year ago, according to the Minneapolis Area Association of Realtors.
“It should be a cold time of year, but our market is really hot,” said John Schuster, a real estate agent with Coldwell Banker Burnet in Minneapolis. “It’s not as cold as it usually is, so that’s helping the market. We’re selling homes with multiple offers.”
The average temperature in the Twin Cities this November was 41 degrees, vs. 25 degrees last November. The 41 degree average also ranks 7.5 degrees higher than the average over the last 30 years, according to the National Center for Environmental Information.
Meanwhile, tight supply of homes for sale, down 25 percent from a year ago, is keeping values on the rise. The median Minneapolis home price hit $216,000, a nearly 4 percent increase from a year ago. It is taking less time to sell as well, with the average days on market down to 70.
“Inventory is down because literally all of the distressed sales are off the market. Three years back it was over half the listings we had,” said Schuster.
Minneapolis wasn’t exactly a front-runner in the foreclosure crisis, not nearly as bad as Las Vegas, Phoenix and so much of Florida. It did, however, suffer plenty, and is now finally coming out from underneath all that distress. Foreclosures and short sales are now less than 10 percent of total activity.
Minneapolis home prices were also skewed by investors in the distressed market. Three years ago, Blackstone’s Invitation Homes, the leader in the new, institutionally owned, single-family rental market, bought more than 1,500 homes in the Twin Cities and continues to own and rent them.
“It’s really just finally come back to a traditional buyer/seller market. We’re able to find the true market value because the hedge fund money is finally out,” said Schuster.
Buyers, he warns, are looking for turnkey listings. The listings that are not updated do age and don’t sell. He is getting more calls from sellers now, who plan to list in the spring. Many, he said, were sidelined and waiting for one more year of positive prices before taking the plunge. The majority of home sales in Minneapolis take place between February and July; he is just hoping there are enough listings to meet demand.