ST. CLOUD – A shortage of houses for sale is prompting buyers in the St. Cloud area to pay more for properties — often more than the asking price — and submit more competitive offers.
From January-March, the median sales price of houses in central Minnesota — Stearns, Benton, Sherburne and Wright counties — was up nearly 20% over the first three months of 2020, according to data from the Minnesota Realtors organization.
That's almost double the statewide increase in median sales price of 10.5% year-to-date.
"It's just getting really, really competitive out there," said Nancy Costanzo, president of St. Cloud Area Association of Realtors and agent with Premier Real Estate Services. "We're really pushing (buyers) to cover their own closing costs and have more money saved to put down initially."
In March, home buyers in the St. Cloud area — covering most of Stearns County, as well as Sauk Rapids and Foley in Benton County — paid 100.2% of the original asking price, up 3.2% from March 2020.
"We're also seeing offers coming in forgoing an inspection — just so they can have an upper hand," Costanzo said.
Buyers are scrambling due to a "stubbornly persistent shortage of homes," according to Chris Galler, chief executive of Minnesota Realtors.
Homes for sale in the St. Cloud area were down 62% from March 2020, leaving only a one-month supply of inventory. A balanced market typically has about six months of inventory, Costanzo said.
The supply is further stifled by homeowners who are reluctant to sell their properties for fear of being unable to purchase an affordable home where they are relocating, according to Galler.
"There's no doubt that we will be in a seller's market well into the future," Galler stated in a release.
Costanzo recommends prospective buyers build a relationship with an agent, get preapproved for a mortgage and connect with a lender that will be punctual and accessible — "somebody that can get you a preapproval letter on a Saturday afternoon when you're writing an offer."
Buyers should also consider having more money up front. For the past several years, sellers often contributed some of the closing costs, Costanzo said. By doing so, sellers could get a higher selling price but the buyer wouldn't need as much money up front.
"One way buyers are losing offers is if they need help with that additional closing cost," she said. "We're starting to educate our buyers: maybe you need a few more months to save up that additional closing cost."
Jenny Berg • 612-673-7299