By all accounts, the Minneapolis duplex market is recovering from the real estate crash nicely.
All year, here and elsewhere, there have been reports of increased sales activity and, more importantly, rising prices.
However, we’ve also read these rising prices have been driven largely by low interest rates and a lack of inventory.
Brace yourself: that may be about to change.
Countless duplex owners who have wanted to sell for years have been sitting on the sidelines, waiting for their chance. And many have begun to seize the opportunity.
For the week ending September 14, 2013, for example, there were 34 duplexes, triplexes and fourplexes that became available for sale in the Minneapolis/St Paul market. Most (70.6 percent) belong to traditional sellers.
Compare this to 2012, when there were just 20 new listings for the week, 60 percent of which were sold by owners with equity.
There were 12 small multifamily property owners who accepted offers the second week of September this year; up just one from 2012. However, 83.3 percent of this year’s happy sellers had equity in their properties. Traditional sellers usually translate into higher prices, and the average off market list price for the 2013 crew was $205,900.
Last year, just 27.3 percent of the sellers didn’t involve banks in their decision, and that resulted in an average sold price of $140,659.
The single family home market has also seen a bit of an influx of inventory, with new listings up 19.5 percent for the week. Pending sales were also up, rising 8.3 percent over last year. In all, inventory is still down 8 percent from where it stood one year ago.
As supply begins to rise to meet demand, keep an eye on stabilizing prices, and a subsequent slowing in property appreciation.