Minneapolis Duplex Sales Reflect Tax Credit
There were fewer Minneapolis and St Paul duplex, triplex and four unit apartment building sales for the week ending April 30, 2011, than there were for the same week last year.
That’s no surprise, as last year’s figures include those who rushed to have a signed purchase agreement in hand prior to the end of the first time and repeat duplex buyer tax credits, which expired April 30, 2010.
For the week last year, there were 38 duplexes and small multi-family properties that left the market with purchase agreements for the week. Nearly 53 percent of the sellers involved did not have to receive permission from a bank, nor signed their names on behalf of the lender.
In other words, they were traditional sellers with equity in their properties.
This year, just 19 Minneapolis duplex owners came to terms with duplex buyers on their properties. Of these, only 21 percent had equity in their properties, and didn’t need to get any one’s permission to determine what they felt was an acceptable price.
Traditional, or equity sellers, as well as demand, help determine value. As such, last year’s average sold price of $149,047 is significantly higher than this year’s average off market Multiple Listing Service (MLS) price of $122,000.
In spite of the expiration of the tax credit, the last week in April in 2010 saw 65 new listings come onto the market. Of these, 29, or 44.6 percent, were offered by traditional sellers.
The last week in April this year saw just 32 new listings hit the market, half of which belonged to equity duplex sellers.
The single family home market also saw a decline in new inventory, with 3.9 percent fewer homes coming onto the market than they had for the week one year ago.
Needless to say, the number of signed and accepted purchase agreements was down as well; 37.4 percent to be exact. In all, there are 10.8 percent fewer homes available for buyers to select from than there were last year.
Next week’s numbers should finally help us gain proper perspective of how the Minneapolis and St Paul duplex market is truly doing.