We’ve all heard of pent-up buyer demand.
It’s what economists talk about when economic conditions prevent consumers from buying what’s usually durable good due like a duplex, house, washer, dryer, or new car.
What we hear far less about is pent-up seller demand. And while most in the housing market use it in conjunction with home owners who would love to sell and buy something bigger, it’s a phenomenon I have begun to see in the duplex owner market as well.
Many Minneapolis and St Paul duplex owners purchased their investment properties seven or eight years ago. The market was at its peak, prices at a premium, and it seemed like values would go up forever.
Of course, that didn’t happen.
However, thanks to fewer people being able to qualify for mortgages, rental demand rose and so too did rents. This meant many properties that previously had negative cash flows were suddenly putting cash in their owners pockets every month.
This allowed many owners to hang on until values rose.
I actively prospect for both duplex sellers and buyers. If I had a dollar for every Twin Cities duplex owner who said in the last eight years they intended to “wait until the market came back” or to “ride this out”, I could retire.
I haven’t heard that as much the last six months.
You see, life has changed in the near decade since the boom busted; for all of us.
And what many duplex owners who were either single or newly married when they invested are telling me is that life is suddenly in the way of being a landlord.
Kids are in sports.
Work promotions mean more responsibility.
And aging parents require more care.
Time and again, I am hearing, “If I didn’t have to come to the closing table with money, I would sell now.” Or, “I plan to sell in the spring.”
A lot of people have been waiting it out; and many aren’t sure they can take much more. They just want to move on.
If you are a duplex owner who’s been considering selling, this should get your ears up. You are not alone, and if you “wait til spring”, you may have a lot of competition.
And when supply exceeds demand, prices decline.
What’s the solution?
Remember, the spring housing and duplex market begins the week after the Super Bowl. In other words, to beat the crowds, it may be wise to consider selling now.
Yes, duplexes sell in winter, and over the holidays. In fact, some of the most serious buyers of the year — who are buying due to job transfers, to lessen tax burdens, or because life has simply dictated a change — are oblivious to snow and the elements and actively shopping now.
For sellers, there’s less competition. And that’s always good for prices– meaning it’s a great time to sell.
I work during the winter too, so feel free to call or email so we can get you out before the post winter crowds.