Duplex Chick

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Just like Isaac Newton proved the existence of gravity, I can prove there is a shortage of Minneapolis duplexes for sale.

Take the week ending January 21, for example. There were 24 duplex, triplex and quadraplex property owners who received and accepted purchase agreements.

Of these, 4, or 16.7 percent didn’t need a bank’s permission to make the decision to sell.

Last year during the same week, there were 22 Minneapolis and St Paul duplex owners who accepted purchase agreements. Four of these duplex sellers had equity in their property.

So, year over year, while it’s only a difference of two sales, it’s fair to say Minneapolis duplex sales were up, right?

But here’s the catch. One year ago during that week there were 33 new listings.

This year, there were just 19 new listings.

 Higher sales + less inventory = duplex for sale shortage.

While conventional economic logic would suggest that less inventory coupled with higher demand would result in higher prices, this isn’t yet the case. Last year’s average sold price for the week was $112,074, compared to this year’s average off-market list price of $113,140.

In this market, generally speaking, average sale prices are less than the amount the property was last listed at. As a result, we can expect the average sale price to be below last year’s mark.

My theory can also be proven in the single family home market. There, the number of new listings for the week decreased 8.2 percent, while pending sales increased 29 percent.

The median sales price in the month of December, however, was down 6.5 percent to $145,000.

I haven’t been able to substantiate a rumoured March release of bank-owened inventory, but for the buyers currently in the market for a Minneapolis duplex, it would be welcome.

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If it seems like there’s a shortage of Minneapolis duplexes for sale, it’s because there is.

Perhaps it’s because for many weeks we’ve seen statistics like this:

For the week ending January 14, 2012, there were 20 new duplex, triplex and quadraplex listings to the Minneapolis MLS.

During the same week in 2011, there were 40 new listings.

In other words, the amount of new inventory for the week had dropped by half.

In both cases, exactly half of that new inventory was brought to the market by traditional sellers– as in people who didn’t need permission from a bank to sell.

Ironically, there were just 14 Minneapolis and St Paul duplexes where sellers received and accepted purchase agreements the second week of January. Only one of these duplex owners decided to sell without bank interference.

On average, these properties pended at a list price of $78,299.

This number is down from that week in 2011, when 20 duplexes pended or sold on the MLS. Of these sellers, just less than one-third had equity in their property.

These sellers received an average sales price of $136,920.

Single family home listings followed duplexes, reporting a 5.2 percent decline in the number of new listings to hit the market. In all, there are 23.8 percent fewer homes for buyers to choose from than there were last year.

Pending sales, however, were up 29.4 percent.

The tightening market has yet to impact sales price in an upward direction.

Can’t wait to see what spring brings.

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For the moment, the Minneapolis duplex market appears to be stable.

Before we all go singing “Ding, dong, the witch is dead”, let’s see what happened the week ending January 7.

There were 17 duplex owners who accepted purchase agreements on their properties. Of these, 41 percent did not need a bank’s permission to sell. Of these, the average price they left the market at was $95,350.

Last year, there were 12 Minneapolis and St Paul duplex owners who came to terms with buyers during the first week of the year. Similarly, 41.7 percent had equity in their properties. On average, these duplexes sold for $94,228.

There were 29 new listings that became available for purchase during the first week of 2012. More than half; 51.7 percent to be exact.

In 2011, there were 26 new listings during the same week. Of these, 53.8 percent were brought to the Minneapolis duplex market by traditional sellers.

And while this seeming “more of the same” could be cause for comfort, it’s important to remember that according to Lender Processing Services, more than 6 million loans nationally are more than 30 days behind in their payments. Nearly 2 million of these property owners are actually more than 90 days behind.

At some point, those properties will have to work their way onto the market.

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I can’t believe there aren’t any headlines or special news bulletin interruptions. After all, what is a balanced real estate market?

One where there are an equal number of duplex buyers and sellers in the Minneapolis market.

The easiest way to measure this is with the Months Supply of Inventory statistic. Essentially, this number comes from the calculation of, if nobody put another house or duplex on the market, how many months would it take to sell all the ones already for sale?

A balanced market is one at which there’s a 5-6 month supply.

Anything bigger than that, and it’s considered a buyer’s market. Like what we’ve had the last few years.

Anything smaller than that, and we’re in a seller’s market.

In statistics released by the Minneapolis Area Association of Realtors today, in December, the Twin Cities had a 36.2 percent decline in inventory, resulting in a 4.6 month supply.

Which means, for the moment anyway, the market favors sellers.

And I certainly haven’t heard any word of this in our local media outlets.

For the week ending December 31, 2011, there were 20 Minneapolis and St Paul duplexes, triplexes and four unit apartment building sellers who received and signed purchase agreements for their properties.

Of these, 35 percent have equity in their property and do not have to get a bank’s permission to sell.

These 20 properties left the market at an average list price of $158,300. This is up from last year’s sold price for the same week of $117,310.

Of course, one year ago, there were just 11 Twin Cities duplexes that sold that week. Of these, only 18 percent did not involve a bank’s input on the sales price.

Last year during the week, there were 12 new duplex listings for buyers to choose from. There were the same number last year.

However, while traditional, equity sellers contributed 42 percent of the inventory during the final week of 2011, just 25 percent of those sold the same week in 2010 did.

Before we start looking for signs of CNN trucks and Anderson Cooper in our neighborhoods, it’s important to note happy days, are probably not here again.

After all, on a national basis, there are reportedly well over 6 million homes and duplexes at some stage of the foreclosure process.

But right now, we’ll take any bit of good news we can get.

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Before we dash into 2012, we need to take a look or two over our shoulders at exactly what happened in Minneapolis duplex sales at the end of 2011.

For the weeks ending December 17 and 24, for example, it’s interesting to note pending duplex sales were up over the same weeks in 2010.

The week ending the 17th saw 22 Minneapolis duplex, triplex and four unit apartment building owners receive and accept purchase agreements. Of these, 18 percent did not have to consult with anyone at a bank in order to come to terms with the buyer.

For that week in 2010, just 13 duplex owners accepted offers. Slightly more of these sellers (23 percent) were people with equity in their duplexes.

For the week ending December 24, 14 Minneapolis and St Paul duplex sellers accepted offers on their investment property. While this total is just one higher than the same week the year before, the good news is 36 percent of these sellers have equity in their property. For the same week in 2010, just 15 percent of the pending transactions were not distressed duplexes.

The amount of new inventory on the market continued to decline, with just 26 new listings appearing on the MLS the week ending the 17th. Of these, 31 percent were offered by equity sellers. In the same week in 2010, there were 41 new duplexes for sale in the marketplace, with just 10 percent being neither foreclosures or short sales.

During the week ending December 24th, there were 19 newly listed Minneapolis duplexes for sale on the MLS. Of these, twenty percent were offered by traditional sellers.

For the same week in 2010, there were 22 new duplexes for sale. Nine percent of those listings were not foreclosures or short sales.

As we start the New Year, it’s important to note there is a continued shortage of duplex inventory. This does not mean, however, that we are seeing any sort of price increase. In fact, for the week ending December 24, the average off-market price was $140,270.

For the same week in 2010, the average sold price was $140,330.

As most MLS-listed properties are currently selling at approximately 92 percent of list price,  odds are we are continuing to see a downward trend in value.

With a lender-promised spring acceleration of backlogged foreclosures on delinquent duplex owners, 2012 promises to be yet another interesting year.

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If people gave Minneapolis duplexes as Christmas gifts, this year recipients would be getting the equivalent of a whole lot of ugly sweaters.

It isn’t that the gift givers have bad taste. It’s just that, well, there weren’t a lot of choices left at the store.

For the week ending December 10, for example, there were just 20 new Minneapolis and St Paul duplex, triplex and fourplex listings for buyers to choose from. Just 30 percent of these were being offered for sale by traditional duplex owners.

One year ago during the same week, there were 35 newly listed duplexes for sale. Of these, 31 percent didn’t need to involve a bank in negotiating a sales price.

There were 13 Minneapolis duplexes that sold during the week. The parties involved in twenty-three percent of these transactions did not have to consult with a lender to arrive at the final price and terms.

In the same week one year ago, 17 duplex sellers received and accepted offers on their properties. Of these, 17.6 percent did not need a lender’s permission to sell.

The single family home sector also continued to see a decline in new listings for the week, dropping 11.3 percent from the same week the year before. Meanwhile, pending sales continued to increase; up 31.7 percent over early December 2010 figures.

If you want to sell your Minneapolis duplex, it’s a great time to do so.

No, prices aren’t what they were in 2006. But remember, those prices were a little like flying reindeer anyway.

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I have to confess, I love it when I’m right about Minneapolis duplex sales.

Especially when they’ve gone missing.

You see, all year, I’ve been complaining– well, you might actually call it whining– about the lack of duplexes for sale here in the Twin Cities.

Every week it seems there are fewer new listings than there were during the same week the year before.

For the week ending December 3, 2011, for example, there were just 23 duplexes, triplexes and four unit apartment buildings that came on the Minneapolis and St Paul market.

Compare that with 36 during the same week in 2010.

Of the week’s new listings, 52.2 percent were offered for sale by traditional sellers. Last year, just 27.7 percent of the new listings were.

If you think these weekly drops of 10 – 15 new listings don’t add up, consider this: in 2010, there were 2,320 duplexes made available for sale in the seven county metro area.

To  date in 2011, there have been 1572. That’s a decline in inventory of 32.2 percent.

And I don’t know about you, but I personally don’t think there are going to be 800 new listings between now and year’s end.

The week after Thanksgiving saw 20 duplex sellers receive and accept purchase agreements. Of these, just 15 percent were traditional sellers with equity in their investment property.

Last year, that weekly figure stood at 22 purchase agreements, with 36.5 percent of them signed by duplex owners with equity.

The average price the week’s duplexes left the market at was $144,180. While this is sure to drop when sold prices are reported, it is, nonetheless, significantly higher than the $110,200 sold price of last year’s group.

Of course, it isn’t just duplex inventory that’s down. The single family home sector also saw a 9.3 percent decline in new listings. Meanwhile, pending sales were up 36.4 percent over the year before.

If you’re thinking of selling in the spring, don’t wait. Right now, there’s clearly little to no competition for your Minneapolis duplex!

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Thanksgiving is about traditions. And when it came to Minneapolis duplex sales for the week ending November 26, the real estate market was too.

Eight duplex owners received and accepted offers on their properties during the week. Of these, half were duplex sellers with equity who didn’t have to talk to a lender in order to sell their property.

Last year, there were 11 Minneapolis duplex sellers who received and accepted offers sometime between eating too much and camping out at the mall. Of these, just three were people who eventually walked away from the sale of their duplex with money in their pocket.

Understandably, there weren’t a lot of new duplexes listed for sale during the holiday week; just 17, as a matter of fact.  Of these, 35.3 percent were people with equity.

One year ago during the same week, there were 21 new duplex investment opportunities that came onto the market.  Just 28.5 percent of these belonged to duplex sellers you could actually shake hands with.

It seems single family home buyers weren’t all at grandma’s house over the holiday, as pending home sales jumped 46.8 percent over the same week last year.

Sellers, however, continued to be lethargic, bringing 601 fewer listings to the market than they did one year ago.

If the number of single family homes and duplexes for sale in Minneapolis continues to decline, watch for a Black Friday kind of spring.

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To some people, doing the same thing over and over and getting the same results is the definition of sanity.

That must mean the Minneapolis duplex market must be pretty sane. Because that’s exactly what Minneapolis duplex sales and newlistings did the week ending November 19, 2011.

There were 25 Minneapolis duplex, triplex, or four unit apartment building owners who received and accepted purchase agreements for the week. Of these, 44 percent were traditional sellers who will leave the sale of the duplex with a check in their hand.

This ratio was true of the newly listed duplexes for sale as well, with 25 coming on the market, of which, 52 percent belonged to sellers who won’t need to consult with a bank in order to sell.

These ratios of traditional sellers might sound paltry when compared with 2005 figures, but when held up to the same measures for the week last year, things look promising.

Back then, there were 24 Minneapolis duplex sellers who received and accepted purchase agreements. Of these, just 29% walked away from the closing table without having to consult with a bank.

There were 27 new Minneapolis duplexes for buyers to choose from during that same stretch. Of these, just 26 percent were brought to the market by a traditional seller.

Single family homes also kept doing the same thing over and over, with the number of new listings down 18.6 percent for the week, and pending sales up 30.5 percent.

Overall, the total amount of housing inventory on the market decreased another 21.8 percent.

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At least the Minneapolis duplex market is consistent.

Somewhat.

The trend of dramatically fewer new duplex listings continued for the week ending November 12, 2011, with just 17 new duplex opportunities appearing on the Minneapolis  market compared to last year’s 40.

For the math whizzes in the audience, that’s a decline of 57.5 percent.

Of these new listings, 8, or 47.05 percent were offered by sellers who won’t have to consult with a bank before signing a purchase agreement. Last year, 50 percent of the duplex sellers had equity in their properties.

There were 15 duplex owners who accepted and signed purchase agreements during the week. Of these, just two will take a check home from closing.

Last year, there were 26 Minneapolis and St Paul duplex, triplex and four unit property owners who accepted offers. Of these,  26.9 percent were sellers with equity in their properties.

What may be perceived as an encouraging sign is last year’s average sold price for the week was $113,631. This year, the average list price Minneapolis duplexes left the market at was $127,253.33.

On average, listings on the MLS are closing at 91.2 percent of the price they were last listed at, so we should see average sold prices finish at or slightly above last year’s figure.

The single family homes market continued to see increased sales and decreased listings as well.

There were 2.5 percent fewer new listings for the week, while pending sales increased 37.1 percent over last year’s tally.

Whether you own a Minneapolis duplex or St Paul home, you may want to consider listing it over the holidays. There is far less competition on the market right now, while buyer activity remains high.