Shopping for a duplex or entry-level single family home in the Twin Cities right now is a bit like shopping at the mall ten days after Christmas.
There’s not much left on the shelves and what is there, is, well, like an ugly sweater.
In October, first time home buyers rushed to find and buy homes in time to close by the November 30 first time home buyer tax credit deadline. Essentially, they had to have a purchase agreement no later than Halloween.
As a result, for the week ending November 7, the Twin Cities market posted “only” a 17.2 percent sales increase from last year. For the week ending October 31, that figure had been a 42.9 percent spike.
New listings in the single family sector were also down 14.3 percent for the period. In all, the Twin Cities region has 12,000 fewer listings than there were at the supply peak in September, 2007.
In the duplex and small multi-family sector, pending sales were exactly twice what they were for the same stretch last year. Of these, 31.25 percent were offered by traditional sellers, compared with a 20.83 percent traditional seller market share last year.
While a greater percentage of traditional sellers has, over the past few weeks, translated to a higher average off market price year-over-year, that wasn’t the case this time. Average off market prices were down just over $15,000.
Here’s the good news if you’re a seller. There’s a whole lot less inventory on the shelves for buyers to choose from. The first week in November last year saw 73 new duplex listings come on the market. This year, there were just 45 new properties for buyers to choose from.
If this trend continues, demand will exceed supply, forcing prices to rise.
In all likelihood, however, there will probably still be a couple of ugly duplexes left on the shelves.