Sometimes the Minneapolis, St Paul and surrounding suburbs duplex market feels a lot like Minnesota weather.
It’s sunny and warm in May. But it’s too hot for this time of year. So even though there isn’t a cloud in the sky, it just seems like there’s a storm coming later in the day.
That’s what the duplex market feels like right now.
In April, the 7 county metro area saw 191 duplexes, triplexes or fourplexes change hands. They were typically on the market 34 days, sold at 102.5% of the list price and garnered, on average, $429,096 for their sellers. The highest-selling duplex in Minneapolis was in Linden Hills. It traded for $699,900. St Paul saw a duplex on Portland Ave sell for $650,000. Metrowide, the high seller was in Columbia Heights at $700,000.
In April of 2021, there were 169 properties that traded hands. They averaged 34 days on the market and sold for $385,606.
Prices are up, market time is down, and more properties sold in April this year than last. What’s not to love?
Like the weather, however, something just feels off.
Where in the data is there evidence to substantiate the feeling?
Believe it or not, it’s like the rain. It’s in the percentages.
Of the 169 duplexes on the market, 139 sold. That’s 82%.
Fast forward to April 2022. Of the 127 duplexes, triplexes and fourplexes on the market, 66% sold. One year ago that figure was 82%.
In fact, declining percentages seem to be the trend for the year. In January, 55% of the active listings sold. In February, 33% and in March 69%.
Last year, January saw 61% sold, February 40% and March 69%.
This is likely the impact of rising prices and interest rates. Remember, for every 1% increase in interest rates, affordability drops by $8000. We have had roughly a 2% increase in rates over the last 12-14 months, so today’s buyer can afford to pay $16,000 less than one year ago.
Of course, rents have also increased nationwide. As rental revenue may help those same buyers qualify for a loan, it’s more important than ever for those considering selling to make sure their rent is at or near market price.