Will Interest Rates Kill The Minneapolis Duplex Market?

Last week, interest rates went up.

So?

When interest rates go up, buyers plain and simply can’t pay as much for Minneapolis and St Paul duplexes, triplexes and fourplexes.

That means if you’ve been thinking about selling, buyers can pay you more now than they may be able to next year.

Take, for example, the week ending June 1, 2013.  There were 25 Twin Cities duplex sellers who received and accepted offers on their properties. Of these, 48 percent will leave closing with a check in their pockets.

On average, these sellers had a final listing price on their duplexes of $152,892, which is up from last year’s sold price of $143,629 for the same week. In something of an unusual twist for the last several months, however, 81 percent of these 16 owners were traditional sellers, which is more characteristic of this year’s market.

The market continued to be at something of a standstill for new inventory, with 25 new listings becoming available; up one from last year’s 24. Sixty-eight percent of this year’s offerings are being sold by equity sellers; down slightly from last year’s 70.8 percent who could say the same.

Single family home buyers saw a 23.6 percent rise in inventory for the week, with pending sales also up 22.8 percent. Overall, inventory is down 23.1 percent.

It’s also interesting to note that in May, the average Median Sales Price for a home sold in the Twin Cities was $194,950; up significantly from April’s Median Sales Price of $182,000.

As long as interest rates stay low, it will continue to be a great time to sell.