Comment
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.
Comment
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.
Comment
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.
Comment
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.
Comment
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.
Comment
Anyone thinking the banks foreclosure freeze hasn’t had an impact on the availability of Minneapolis duplexes for sale, should consider the market data for the week ending November 5, 2011.
There were 12 new duplex listings that came on the market, and 18 duplex sellers already on the MLS who accepted purchase agreements.
During the same week last year, there were 16 duplex owners who received and signed purchase agreements for their properties.
However, there were also 45 new listings for duplex buyers to choose from.
Last year, roughly one third of the new listings came from sellers who did not need to receive permission from a bank to sell.
This year, one half of the duplex sellers will be able to make selling solely their decision.
The presence of traditional sellers in the duplex market also meant a higher average off-market price increase to $144,364 over last year’s sold price of $116,602.
In my opinion, this is not necessarily cause for celebration. According to the Default Servicing News, estimates of the number of about to be repossessed and foreclosed properties yet to hit the market nationally run from 1.6-8.2 million.
Most industry analysts believe the most accurate figure of shadow inventory to be around 4 – 4.5 million homes.
The number of distressed properties currently on the market is somewhere in excess of 1 million.
It is important to bear these figures in mind when considering the single family home market in Minneapolis and St Paul as well. New listings for the week were down 18.7 percent, pending sales increased 20.5 percent, and overall, there are 22.1 percent fewer homes to choose from on the MLS than there were one year ago.
As winter approaches, it will be important to watch for signs of a Minneapolis bank owned duplex inventory thaw.
Comment
Balance, in a real estate market, is when there is a 5-6 month supply of single family home and duplex inventory available for sale in a given market.
When this happens, both home and duplex buyers and sellers have equal leverage. In other words, a buyer can no longer beat desperate sellers up on price.
And, of course, sellers can’t crank up prices on buyers simply because there’s nothing worthwhile on the market for them to buy.
Heads up, those of you looking for a Minneapolis duplex deal…
Buried in today’s market report from the Minneapolis Area Association of Realtors was the following statistic:
- for the month of September, the Months Supply of Inventory decreased 21.9% to 6.8 months.
In other words, in the Twin Cities, we’re .8 of a month from a balanced market.
In the duplex sector, there were 16 sellers who accepted purchase agreements during the week ending October 22, 2011.
Of these, 25 percent were traditional sellers who will leave the closing table with a check to spend on something else.
All of the other sellers will watch proceeds of the sale go to a bank.
Last year, there were also 16 sellers who accepted offers during that week. Of those, however, just 12.5 percent were going to have money left over.
Most of the duplexes this year left the MLS at an average list price of $106,982. This is up from the average sold price one year ago of $92,156.
Here’s where things get interesting. One year ago during the third week of October, there were 44 newly listed duplexes, triplexes and four unit apartment buildings for buyers to chose from.
The same week this year?
14.
There were also 110 property owners who received Notices of Default in Hennepin and Ramsey counties alone this morning. This is up significantly from the daily averages of the last 8-10 months.
Looks like it’s going to be an interesting winter for Minneapolis duplex sales…
Comment
These days, there are so few new Minneapolis duplex listings coming on the market that I’m convinced some one’s going to have to start giving out ration coupons.
Really. There’s a shortage!
For example, for the week ending September 17, 2011, there were 36 new duplex listings available for purchase.
During the same week last year, there were 49. So, from last year to this, we experienced a 27 percent decline in new inventory.
Last year, 51 percent of these listings were brought to the market by duplex owners with equity.
This year, 53 percent belonged to traditional, or equity sellers.
There were 23 duplexes, triplexes or small multi family building owners who accepted purchase agreements in the second week of September. Of these, just 26 percent will not need to consult with the bank before they sell their property.
During the same stretch last year, 19 Minneapolis and St Paul duplex owners accepted offers. Of these, 32 percent did not need permission from their lender before agreeing to sell.
On average, these sellers from one year ago received $107,100 for the sale of their property.
This year, the average property a duplex was listed at before it became a pending sale was $104,560. As sold prices, as of late, have averaged less than list prices, odds are we will see a more significant drop when sold prices are recorded.
While not nearly as dramatic as the Minneapolis duplex market, new single family home listings were down 22.5 percent for the week, marking the 15th straight week of new inventory decline.
Meanwhile, pending sales were up 40.6 percent.
Overall, there are 22.5 percent fewer single family homes available to purchase on the Twin Cities market than there were one year ago.
While I doubt they’re at the place where they’re going to ration home sales, duplex coupons might not be far away.
Comment
There is something coming in the Minneapolis and St Paul duplex market.
Like the song, in “West Side Story”, I don’t know what it is. But it’s a change, to be certain.
For the week ending September 3, 2011, there were 28 Twin Cities duplex and small multi-family owners who accepted offers on their properties.
Of these, 50 percent did not have to talk with anyone at a bank in order to sign the purchase agreement.
Last year during the same week, just 11 Minneapolis and St Paul duplex owners accepted purchase agreements. Only two of them, or 15.4 percent, were able to do so without consulting anyone at a lending institution.
In terms of pended sales, that’s a 254.6 percent year-over-year increase.
The average price a pended duplex was listed at before leaving the market this year was $158,679. It is interesting to note this average included four properties listed for less than $21,000.
The average sold price for the same week last year was $154,375. The lowest sold price included in this average was $55,000.
Duplex inventory continued to shrink, as the week brought just 25 new purchase opportunities to the market. Of these, 52 percent are being sold by sellers with equity.
This figure represents a drop in new inventory of 28.6 percent over the same week one year ago. Of those listings, 57.4 percent were brought to the market by traditional sellers.
It is interesting to note the single family home market appears to be experiencing some of the same phenomenon as the duplex market.
The week saw 14.3 percent fewer new listings than the same stretch in 2010.
Meanwhile, there were 976 purchase agreements signed by both buyers and sellers during the week; a number that represents a jump of 35.6 percent since last year.
All of this would be cause to get up and dance, were it not for continued rumours of foreclosures in the pipeline.
Comment
Well, I can’t tell you Minneapolis duplex prices were up for the week ending August 20, 2011.
In fact, the average off-market price of $119,548 was just $66 shy of the average sold price for the same week last year.
However, according to the folks over at Standard & Poor’s, the average price for a single family home in Minneapolis in late spring was up 3.2 percent, which is good news.
Of the 25 Minneapolis duplex sellers who received and accepted purchase agreements for the week, 20 percent were traditional equity sellers. Last year, 14.3 percent of the pended duplex sales did not involve a bank in the negotiations.
New duplex inventory continued to be a problem, as the 28 new listings for the week were 9 less than came on the market during the same week one year ago.
Of these new listings, 53.6 percent were offered by traditional sellers this August, as compared to 32.4 percent last year.
Single family homes also saw a continued trend of less new inventory, down 11.8 percent from the same week in 2010. In all, there are 20 percent fewer homes available on the market to choose from than last year.
As we finish round the corner and head for the end of the year, keep in mind that sooner or later, as supply decreases, there won’t be enough to meet the demand for Minneapolis duplexes…no batter how few duplex buyers are out there.
