History dictates that when traditional duplex sellers dominate the marketplace, prices go up. And when foreclosures and short sales are plentiful, prices decline.
At least, that’s how it’s been in the past.
The spring Minneapolis and St. Paul duplex market, however, is rewriting history.
For the week ending May 3, 2014, there were 24 Twin Cities duplex, triplex, and fourplex owners who accepted offers on their properties. The vast majority, at 87.5 percent, have equity in their properties and will leave closing with a check in their pocket. And yet, the average final list price on these properties was just $159,569.
During the same week last year, there were 27 small multifamily property owners who accepted offers. Just 51.9 percent did not involve negotiating with a bank in order to sell. However, this was not reflected in the average sales price of $212,104.
Traditional sellers also contributed 87.9 percent of the 33 new listings for the week. Meanwhile, only 61.5 percent of 2013’s new listings for the week belonged to sellers with equity in their properties.
The single family home market saw the number of New Listings for the week increase slightly; up 1.4 percent over last year. Meanwhile, Pending Sales dropped 13.4 percent. The combination of the two helped total Inventory rise 2.6 percent.
For the month of April, the Median Sales Price rose 7.6 percent to $196,425. This may be the result of the persistence of a seller’s market, where home owners are receiving 95.8 percent of their asking price within 89 days of being on the market.
Twin Cities duplex sellers are certainly hoping to see that trend return to duplex prices.