Comments Off on Is Your Minneapolis Duplex Right For A First Time Home Buyer?
A recent news story about the lack of houses for sale for Twin Cities first time home buyers said a lot about the duplex market without ever naming it at all.
According to the broadcast, there were fewer houses on the market in January of 2017 than there have been in any other month in the last 14 years. The biggest shortage of inventory is in homes priced below $300,000.
While the story didn’t say it, the same is true of duplexes. In fact, in January there were just 253 active duplex, triplex and fourplex listings on the Multiple Listing Service; compared to well over 800 at the height of the market in 2005-2006.
What do starter homes have to do with duplex values?
When the prices for houses in the first time home buyer category (below $300,000) rise and become less affordable, buyers start exploring other options; like duplexes.
If you’re a duplex owner with a property in a highly walkable neighborhood that’s in great condition, this is good news for you. One of the first alternatives first time home buyers explore as a means of keeping payments within their budget is duplexes. After all, the rent allows a more expensive duplex to actually be more affordable for a homeowner than a less expensive single family home.
One of the first alternatives first time home buyers explore as a means of keeping payments within their budget is duplexes. After all, the rent in effect reduces the cost of a more expensive duplex for the owner occupant, making as, if not more affordable than a single family home.
As a result, duplex prices go up as a result of increased demand from home buyers.
Right now, demand is high because supply of both quality duplexes and entry level single family homes is so low.
This has resulted in rising prices, making it a good time to be a duplex seller.