Minneapolis Real Estate Market Update Feb 2022

February 28, 2022 MaryLeave a comment

A month goes by in a hurry it seems, so here we are! Did a month make a difference with the real estate market? YES. It is notably busier!

Click here to watch. 🙂

I don’t think I’m telling you anything you don’t already know, but the real estate market is on fire. Someone hit the gas pedal on the housing market in February and they have a lead foot. What does this mean specifically? Let’s look at the twin cities housing market as of Feb 18 2022.

signages for real property selling — Photo by RODNAE Productions on Pexels.com

If you are a seller – LIST NOW and you’ll be partying all the way to the bank.

Just about every listing is getting multiple offers in the first couple of days. The supply of buyers is so great and the supply of homes is so low right now – 15% fewer listings on the market than last year at this point!

Why are sellers hesitating? I assume that it’s because they are worried about finding THEIR next home. As an agent that represents a lot of buyers, I can tell you that sellers can not only command great prices for their homes they can still get a closing date that suits their needs. For example, if a seller is considering putting their home on the market, but are worried it will be gone in a blink, there is a great likelihood that the seller can ask for and receive a 60 close, flexible closing, or recently I’ve seen them asking for a seller’s home purchase contingency or lastly a rent back situation after closing remembering that most conventional loans require the transaction to close in 60 days on the buy side so no long term rentals this way! but this way the seller will have cash in hand and be able to buy while also have a roof over their heads while they wait for their next home to be available.

One of the things that I really like about real estate is that EVERYTHING is negotiable – as long as the parties work it out (within the law!) and get it in a signed contract, the parties can work together to find a solution that works for everyone. Do you have a creative way to structure a contract that lets everyone get what they need? Bring it up and there may be a way to make it work out!

This past week we had offer acceptance rates at 15%, which means that sellers are receiving 6-7 offers on average. But the average for the month is hovering around 35% according to Home Free Transaction Coordinators. I’ll give you more info on what they see in a successful offer after I take you through current market conditions.

Absorption rate

It’s a seller’s market, but to what degree? In the past I’ve explained that the way that we determine this is based on the absorption rate or how many months worth of housing inventory we have at a given time if nothing new were added to the market. 5-6 months is considered balanced, more than that is a buyer’s market and less is a seller’s market. Obviously the more extreme the number the more it favors one or the other. That obviously varies by housing type.

Single family homes have a .56 months (about 17 days) supply now as compared to one year ago when they were at .62 (about 19 days). We have started this year off with available inventory down by 21% year over year. New listings this month are down by 15% from last year.

I was looking for a bright spot and looked at new construction. Builders are responding to the need for houses and have started increasing their production too.

This image shows the big dip and now the increase starting in single family new builds between $400 & $600K. Its not dramatic, but any amount helps – if you have 50 more houses that’s 50 buyers that have found something.

If you have been thinking about selling and are curious about what your home is worth today, let me know. I’ll give you a free estimate of what your home is worth today – absolutely no obligation, just for your information if you want to know – just send me an email. We need homes and now is definitely the time to get the maximum amount of money out of your sale! mschumann@kw.com if you’re curious. I’m happy to do it.

Townhouse/ Condo properties are at .97 months (29 days) vs 1.13 a year ago (34 days). Prices on Townhouses are at a median of $267,000 which is UP 12.2%. Average days on market for a townhouse is down 26% to 14.

Condo prices are at a median of $195,000 up 6.6% from last year and are on the market for about 30 days. If you are a first time buyer or someone that likes condo living, this is the softest spot in the market today and your biggest opportunity.

Single family homes in the 14 county metro area have a median price of $370,000, a gain of 12.1% year over year. They are on the market for NINE DAYS. Only about half of what we saw a year ago. And don’t fool yourself thinking you have 9 days to think about it, this is a listing going live on a Thursday, showing through the weekend, closing offers on Sunday and allowing a 5 day inspection period before heading to pending.

The combined absorption rate (all property types) is at .67 months or 20 days of inventory as opposed to one year ago when we had a whopping .75 months or 22 days of inventory.

What can you do if you’re a buyer?

Here are my suggestions and strategies:

1.my office posts properties to agents internally that are off market and that sellers are willing to part with before going onto the MLS, so having that network available helps a lot!

2. make sure you see what is available in “coming soon” and get in there quickly

3. even better if you have the nerve- offer “sight unseen” while in this status. if the seller will do it, you can usually negotiate an inspection this way and if there is something wrong with the property get out of the contract without losing your earnest money, this does require a good offer out the gate. It’s not a way to get a bargain, but is a way to quit losing in multiples.

4. make your offer more appealing are to offer appraisal gap coverage. This means that if you are financing you are stating that you have the ability to make a larger downpayment in order to cover the gap between your offer and what the bank is willing to loan you, having cash is a very important piece of the puzzle in this environment. You can offer any amount of appraisal gap coverage – it doesn’t have to be 100% of the difference!

5 Look at “wallflowers” these are properties that have been on the market for longer than 4 days. This means they have made it through a weekend without getting an offer and may be more willing to negotiate or look at a reasonable but not extreme offer. These can be homes that a buyer got cold feet on, that their financing fell through or other scenarios.

6. Don’t ignore properties that need work! You can get a home loan that rolls a remodel into it. Not everyone can look past a dirty unfinished basement but it’s rarely a bad investment to add finished square footage to a house – especially in an in demand neighborhood.

7. Do you have time? Offer on new construction. You eliminate multiple offers and choose your finishes. Just be aware that contracts allow builders to cancel your contract if the price of materials goes up and you can’t cover the increase. Don’t get yourself in too deep.

8. There aren’t a ton of these available but spec houses are a good option. They may be completed new builds OR they may be nearly completed with an estimated move in date already.

9. my last option coming to mind to look at loans that allow you to offer as if you’re offering CASH – without a financing contingency. This seems like a HUH??! moment, but in my video next week I’ll interview a lender with a program like this that may give you a leg up and I’ll post it here, of course!

Accepted offers

OK – lets look at what’s been going on with offers per HFTC:

Buyers are waiving inspection 46% of the time, this is a lot, but that also means that 54% of the time they are getting an inspection.

Off market sales are at 12% – this is the “private listing network” that I mentioned where agents that have upcoming listings market them internally first.

Sales Contingent on the sale of the buyer’s home is down to 5% of the time.

Average sale to list price is 103.2%. I don’t know where these are happening because my buyers have been offering at 15% over and losing… We would be happy with 103%!

Cash is at 17% of offers, Conventional at 69%, FHA has ticked up to 5%, VA is at 0.

Hey! I would love to hear from you in a comment or an email or a smoke signal … reach out if you have questions!

Home Buying · home selling · market updates · Uncategorized

Minneapolis Housing Market 2022 Forecast

January 8, 2022January 8, 2022 MaryLeave a comment

Hi and happy new year! Who wants to start the year off with some DATA and a look at what the real estate market is doing PLUS what I believe will happen with the housing market in 2022? I actually LOVE data – it tells a very clear story, so let’s dive in and take a look at what that data is telling us.

Prefer to watch rather than read this? 😉

I wish I had a crystal ball to tell you what is going to happen to the real estate market in 2022, I don’t, but I will make some educated guesses! In addition to that I’m going to share with you what the offers that have been accepted have looked like in the past month.

I like that info because it is ALSO a gauge for how strong the market is – what are sellers wanting to see and what are buyers willing to do to win?

in 2021, being a buyer (or a buyer’s agent!) could feel like pushing a boulder up hill. It was hard, tiring, a little stressful but it was ultimately satisfying if everyone hung in there (I’m stubborn – I don’t quit).

The market was really rough for buyers because demand for homes here is HIGH and supply is LOW. I think many of us went into this winter hoping for a bit of a break on the horizon, but the numbers are not making it look like that will be the case.

Inventory of homes was really low LAST January first – historically low! and as of the first week of january this year we have 15% fewer listings on the market to choose from than we did then. We are still in a ridiculously strong seller’s market.

Fun fact – the last time the market was considered “balanced” in the twin cities was 10 years ago. It has favored sellers ever since and doesn’t seem to be lightening up at all.

As a colleague said today, there is a lot of national press saying that the market is loosening up but the numbers tell a different story.

Do tell, National News!

It’s important to look at DATA for the market you’re in and understand what that means for your situation. So let’s look at the data for the twin cities – you know that price is a function of supply and demand, and we have already established that supply is low. It has been consistently low for years and the recent challenges with supply chain and lumber prices are not helping supply to correct that quickly. It’s going to be a long term process.

Absorption Rate

Realtors look at how many months supply we have of homes available to sell if NO OTHER HOMES ARE LISTED in order to determine what kind of market we are in – 5-6 months is considered a balanced market, fewer months worth of inventory favor sellers and the smaller the number of months the more strongly it favors them, and vice versa for buyers.

Currently, the total months supply we have now including ALL property types is 8/10 of one month. .8 months is WAAAAAY less than 5-6 months.

If you break this down further you see that single family homes are at .7 months supply this year (one year ago we had 9/10’s of a month), Condos have been the softer spot and currently have a 1.6mo supply down significantly from a year ago when we had 2.8 months, and townhomes are just like single family homes with .7 now vs .9 a year ago.

An interesting thing to me is that high end homes are seeing the market tighten up a lot now too. That area had more wiggle room last year, but it looks like that is no longer the case.

Median price by property type

If we take a look at prices we see what this high demand has done over the course of a year, single family homes are at a median price of $360,000 UP 10% year over year from $326,300 (emphasizing that this is a MEDIAN price for the entire metro area, obviously prices range widely!)

Townhomes show a similar increase of 8% from $240,000 a year ago to $259,900 now.

Condos despite being the soft spot ALSO rose in price – they are at $191,000 up 11.6% from $171,000 a year ago.

Demand side of the equation

The other side of the equation is DEMAND. What leads to this high demand?

A couple of things that I can think of the first of which are the low interest rates. The Fed is talking about raising them this year but even if they do, these changes are typically incremental as they test to see the effect on the markets for everything – not JUST homes.

If the rates rise a bit – even to 4%? will that tamp down the demand for homes?

I personally don’t think it will have an enormous effect, the demand is so high, and even 4% or 5% are STILL low interest rates. In the past I have paid interest at 8.25% for my first home, 6.5% for my second, we paid 4% and thought we had a steal when we moved to MN! Yes, we refinanced when the rates dipped again, but you get my point. It’s relative, and people want a place to live that belongs to THEM and gives them essentially rent control and a predictable expense PLUS the joys of having your own home.

The second factor in demand is the fact that a very large bubble of millenials is aging into a time when they want to do the things that people do in early adulthood – get married, have a family, BUY A HOUSE. This bubble, or boom, is driving demand for homes.

Tips for BUYERS

If you are thinking of selling, your property will likely get scooped up VERY quickly this year. If you are thinking of jumping into the pool to BUY, I have some advice:

1. Understand that you are going to be in a difficult situation, you aren’t the only one looking at a house and if you decide to offer on it you will be competing with many other people. Do your best.

2.) steal yourself for the process. If you don’t get the first home you offer on, it will likely hurt a bit, get back in the saddle and try again. SOMEONE wins every one of those multiple offer situations – that someone CAN be you. You just need to have the chops to hang in there and keep swinging. If I’m working with you, I’m going to have your back every step of the way and help you present your offer in a way that makes the seller say – YES – that one!

3.) very important! Look at homes listed UNDER your max price. Almost NOTHING goes for list price right now, so you need to put yourself in a position of being able to offer over list.

4.) A corollary to #3 is that you should save as much cash as possible so that you have that wiggle room to cover appraisal gaps or increase a budget and put a smaller percentage down if you need to.

5.) lastly, don’t stop looking at the times when everyone else has stopped looking! If it’s a holiday or WINTER, now is a good time to look because you are competing with fewer buyers even if the supply is lower, too. I love to look on holiday weekends – sign me up for Memorial Day! I’ve not really had a break over the Christmas season this year because listings are selling now as well as buyers getting homes while everyone else is hung over from too much egg nog. STAY IN THE GAME. Take advantage of the situation.

Offers that are getting accepted NOW

Let’s look at what types of offers are getting accepted right now according to Home Free Transaction Coordinators – what are sellers looking for and buyers offering in the effort to get a home?

Offer Acceptance Rate: 52% this indicates multiple offers to me. We have been quite low on this in the recent past – under 30%

Inspections were Waived 30% of the time – summer was over 50%, now seems like a good time to buy if you REALLY want an inspection

Pre-MLS Sales: 4.4%, these are sales that happen off market, private network of agents marketing them to each other.

Average Purchase to List Price is the lowest I’ve seen this year at 100.87%, this was up around 105% in summer!

Financing Types:

Cash 19% – this is the highest I’ve seen and I can say that it reflects my own personal experience recently.

Conventional loans 73% – still the big daddy, and always will be.

FHA 2% still tough to get these accepted and that kind of stinks, but when you’re going up against cash, I can’t blame a seller.

VA 4% this is the highest I have seen in a year at least.

USDA 1%,

Other 1%

Seller contribution to Closing Costs: 37.8%, this can be in lieu of fixing something.

Home Warranties included in the sale 5.6%

Offers Contingent Upon the Sale of the Buyer’s Property are at 6.7% – this is actually DOWN quite a bit, I believe not too long ago it was around 10-12%. Try to avoid this of possible. It’s really tough to get accepted.

If you’re exploring communities, check out my neighborhoods and suburbs playlist on YouTube to take a look at different areas of the metro.

Let me know if you have questions or comments – love to hear from you!

Home Buying · home selling · market updates

Twin Cities Real Estate Market Update – Fall 2021

November 5, 2021November 5, 2021 MaryLeave a comment

Let’s talk about the Real Estate Market in the twin cities! It’s been a little bit since I’ve done one of these updates, and typically there is some seasonality to the real estate market, with a big slow down in the fall as holidays approach and things picking up in the early spring. Is that the case this year? Let’s find out!

So, how’s the market? If there is one question every agent hears all the time, this is IT! And I think everyone knows the market has been GREAT for sellers and really rough for buyers, so the question is has that changed? The information I’ll give you here applies to the 7 county metro area, but you should know that every neighborhood has its own micro market and behaves a bit independently from the whole, this information is just a snapshot of the general market behavior right now, if you’re curious about your own little niche – let me know and I get you more specific #’s that apply to your specific area in the metro – just send me an email about that and I’m happy to help.

I was able to get a look at some historical data comparing this year to 10 years ago and one of the things that stood out were that the # of active listings that are available to be sold has continually decreased to nearly HALF of what we had then – we had 10,229 homes to choose from in 2016 and now have only 5,692. This isn’t sudden, it’s a distinct trend line going down over the past 10 years. The inventory issue did not sneak up on us and it isn’t going anywhere.

If it’s prices that are freaking you out they peaked in summer and we are now seeing the fall dip. So this could be the time to get a better deal on a home than getting into the scrum with everyone else during peak season.

If you remember from other updates, I like to reference the “absorption rate” how many months would it take for the market to sell or absorb all the homes for sale on the market if no others were listed?

5-7 months worth of housing inventory is considered “balanced” and any number of months less than that indicates a sellers market and a number HIGHER than that is a buyers market.

Right now we have 1.03 mo supply of single family homes, 1.34 mo supply or condos and townhomes, and 1.12 combined mo supply of homes total. A very distinct sellers market! STILL! but better in some degree than earlier this summer when it was less than one month – somewhere around 2-3 weeks, and that takes into consideration days on market and active contingencies like inspection. Reality was that things were sold in a couple of days. And that is STILL the reality depending the price point, condition and the location of the home.

Pricing Trends

Let’s look at what sellers are deeming a good offer right now:

Offer Acceptance Rate: 62% -this has been as low as about 33% this year
Inspections Waived: 31% which is down from the highs over 50%. I am still seeing this come up a lot in multiple offer situations, and if people are bidding on a competitive house getting an inspection can still be a sticking point.
Pre-MLS Sales: 2.74% – this is lower than it’s been for most of this year – we have seen these off market properties make up around 5% of sales over most of the summer
Average Purchase to List Price: sellers are getting of their asking price 100.67% – great news for buyers and not awful news for sellers. You’ll probably get your asking price.

I will say that this is much MORE likely if it is a single family home as condos and townhomes are still soft spots.

The most recent 3 transactions that I have had have ALL had multiple offers, (7-9 offers), one had an accepted offer at 10% over list price, one at nearly 6% over list and the last I don’t know the outcome because we didn’t get it but we offered (and lost) at 10% over list and were told they accepted a cash offer with NO contingencies (no inspection!).

All of these homes were in the tightest price bracket of $300-$500K. No matter what the statistics say this continues to be an area of really fierce competition when it comes to homes that are in high demand areas and in good condition.

Financing Types:

Cash 14%, – if you have the means to make this kind of offer it can really give you an edge. I am aware of some mortgage products that allow you to make a cash offer so if you’re in a competitive price point, and feel like this might be the answer, know that there are options out there and I give help you find out about this.

Conventional loans are still the big dog at 74% of loans.
FHA represented 10% of the accepted offers which is a nice bump up! This is great to see for people that may be first time buyers and need the extra room that an FHA loan grants them. It’s just been difficult to get an FHA loan accepted in this market when you’re being outbid by people that can guarantee appraisal gaps or provide other financial incentives (like cash purchases!).
VA 1% still a tough spot to be in , if you’re not familiar with VA loans, they are a zero down loan. This is a really tough spot when appraisal gap coverage is needed, so if you’re in a position to take any other type of loan, that would probably be beneficial to your offer.
USDA 0% – these are typically on land or rural purchases, seeing a low number here for a metro area is not surprising.
Other = 1%.
Seller Paid Closing Costs: 31% – this keeps going up!
Home Warranties: were included 9.6% – another statistic on the rise – so these indicators all show a very slight softening from the harsh days of early summer for buyers
Contingent Upon the Sale of the Buyer’s Property: 7.5% A little lower than we’ve seen in other months, but present!

Thanks for stopping by! If you’re interested in learning more about the different neighborhoods and suburbs around the twin cities, check out some of my videos highlighting those! I have a playlist dedicated to this with lots of good information if you’re thinking about making a move.

market updates

Real Estate Market Update for July 2021!

August 8, 2021August 8, 2021 MaryLeave a comment

A little breathing room!

If you are a buyer OR a seller, I think you’ll be happy with what is happening right now.

Today I just have a quick update on the Twin Cities real estate market for July 2021, including how the market has changed in the past month and what kinds of offers are being accepted by sellers right now. I LOVE this particular bit of data, it’s SO valuable to see in a higher level view of what types of offers are being accepted. This information started being sent out to us in early spring and while every transaction is different, the trends in offers are enlightening.

After a steady climb in home prices since the beginning of 2021, we are seeing the market flatten out a bit.

The median single family home price for the Twin Cities region stayed nearly level (it actually declined by a whopping $100) at $379,900.

The same can be said for townhouses which are at $259,900 down $100 from $260,000 last month.

Condos in the area that showed a legitimate dip in price, from $203,500 down to $200,000. $3000 isn’t a lot of money n the scheme of things but at that price point, that represents a decrease of 1.5%.

We are seeing an uptick in the number of months supply of single family homes, at one point early this year we were down to a couple of weeks worth available home which actually means that things were selling in a couple of days, usually taking offers on the first day and through the weekend and then being in some sort of contingent status for a period of time.
We are now up to 1.2 months supply. For context we consider it a balanced market at 5-6 months of supply, and the lower the number the more it favors SELLERS. So while we are coming out of that very painful time for buyers to some degree, it is still a seller’s market in the Twin Cities region.

For the macro view comparing todays market to a “normal” market (pre-Covid):
Showing activity, which is a measure of demand, dropped 8.0 percent overall, but not across the board! Some segments of the market have increased interest. For example, listings above $300K saw increased showing activity compared to the same time period in July of 2019.

Sellers haven’t been quite as active as they were – listings are down 21.8 percent overall.

This doesn’t hold true for every price range! Homes listed between $500-750K saw a 27.5 percent increase in supply of new listings compared to 2019 while listings priced above this category also saw increased supply on average.

Buyer activity, which was regularly skyrocketing in the first half of this year, has since calmed to follow a more stable pattern of demand, which is a big relief for buyers in general. Will there still be multiple offers? Quite possibly if the home is priced properly and in good condition. However, when sellers try to price at the top of the market it can backfire.
Overall pending sales are level with two years prior, but every price point has a distinct market of its own.

Listings below $250K saw decreased demand, down at least 29.7 percent. This could be due to the uneven job loss disproportionately hitting this with lower incomes.

Homes priced above $350K saw increased demand, up at least 44.8 percent or greater.
As of the end of July, the 30-Year Fixed Rate Mortgage Average in the United States remained at 2.8 percent – still super low!

Now lets take a look at the types of offers being accepted by sellers most recently.

I love looking at this over time because earlier this year it was like a bacchanalian feast for sellers and being sent to into the coliseum in Rome to fight for survival for buyers.
This data is provided to agents by the Minnesota Transaction Coordinators Company that helps agents across the metro process and manage transactions.

The current Offer Acceptance Rate is 55% – earlier this year we were hovering around the 30% mark and that was an exhausting place to be for buyers, especially those that had any contingencies at all.

The current Cancellation Rate on purchase agreements is 8% (mostly during the inspection timeframe).

Inspections are being Waived about 34% of the time. This is also a major improvement over earlier this year when we were seeing rates close to 50%.

I’ll reiterate something I’ve said in the past – I think an inspection is a really important thing for buyers and sellers AND their agents. It protects everyone.

Pre-market sales (private, off market) are UP to 6.60% after a steady couple of months in decline.

Average Purchase price to List Price: 102.5% – still a little low for where we’ve been this year. So you’re likely not going to get a big discount on a home, but it was OVER 105% earlier this year. This stat is still good for sellers and shows things getting a little better for buyers.

How are people financing their purchases?

Cash has increased to 14%, Conventional loans are down a little to 71%, FHA has increased to 8% (what a great thing to see for first time buyers!) VA is up slightly to 4%, USDA loans are at 2%, Other 1% (contract for deed?)

One of the most heartening pieces for buyers is that Seller Paid Closing Costs are included 26% of the time – the highest it’s been since March and it looks like these are genuinely being paid by the seller because the Average Purchase price to List price for SPCC included sales is 100% and only 17% of these waived the inspection.

Home Warranties included in the contract are at 8.12%

Purchases Contingent Upon the Sale of the Buyer’s Property: 10.15%

OK – I have been saying every month to avoid this if possible and I still maintain that is the best course of action but the trends don’t lie. Sellers are accepting this more and more.
Thanks for stopping by!

market updates

Twin Cities housing market update – June & a bit o’ July 2021

July 14, 2021July 14, 2021 MaryLeave a comment

Is the feeding frenzy OVER?!? Not quite, but it seems to be a LOT better? Of course that is relative! and in this case I mean relative to the crazy times we were in in March – May!

In this video and blog post I’m giving you the current conditions of the market for the 7 county Twin Cities area broken down by property type and then I’ll go into a bit about what we see as far as what terms are resulting in accepted offers right now. These are the encouraging signs I’ve been looking for!

This year has definitely been one for the books! It has been the strongest sellers market that anyone I know can remember – and this is AMAZING if you have a home to SELL! Prices are higher than ever and you can dictate the terms for the MOST part – HOWEVER! Buyers! Do not despair! Things ARE getting easier for you now (at least compared to a couple of months ago when it was an all out SCRUM!)

A note about these graphs – I chose to make them show monthly ups and downs without the smoothing effect that softens the seasonal aspects, so keep that in mind as you look at the dips and heights. the market changes constantly, and this shows those changes month to month.

The median SFH price in the Twin Cities sits at $380,000 – that is UP from $326,100 at the beginning of this year.

Median Price TC Metro Single family Homes

You’ll often hear me talk about the “absorption rate” or the # of months supply of housing available to be sold if no other homes were to go on the market. For context it is considered a BALANCED market if there is 5-6 months of supply. We have been UNDER 1 month for different segments of the market for much of this year, mainly anything under about about $600K. Right now we are STILL at .8 months for anything under about $400k. For single family homes in general we are at a little over 1 month’s supply of homes.

Homes are only on the market for FIVE DAYS!!! a year and a half ago it was FOURTY FIVE! And only 6 months ago around 20! So still homes are still flying off the market.

Let’s look at the 2 softer spots – Townhomes and Condos.

The median price for a townhome is consistent with the rest of the market rise in prices and is at $271,000 from $240,000 in January.

For Townhomes there is a little uptick in supply and we have a full month available right now.

Condos! This is the place if you’re looking for any kind of deal! Sellers are negotiating! You can get an INSPECTION! 🙂
Condo prices are at $171,000 for a median price, up a similar amount from the beginning of the year as other property types are.

The supply of condos is where the opportunity comes in – Still a sellers market but for people selling condos it can feel like a whole different world. There are 2.5 months worth of inventory available. This has dropped a small amount since January but has been relatively flat this year overall.

Now let’s look at what kinds of offers are being accepted!

This is a valuable bit of information that the Minnesota Transaction Coordinators gives us on a regular basis and I’ll add my 2 cents to about what I am seeing (although as a much smaller segment of the market)

Offer Acceptance Rate: 42%

Inspections Waived: 31% – we haven’t been in the 30% range since March

My 2 cents: the last 6 contracts (this past month or so) that I have either written or accepted have had inspections included and accepted. that’s 100% of my sales in the past several weeks. I’ve been thrilled for my buyers and I am 100% fine with it for my seller as well because I feel like inspections protect EVERYONE, the buyer, the seller and ME.

Pre-market Sales that happen without hitting the MLS : 2.8%. This is DOWN from earlier this year! It was over 5% for quite a while – maybe due to pandemic fears about having too many people in a home?

Average Purchase to List Price: 102.7% – about the lowest it’s been since the spring market!

Still great for sellers, but also good news for buyers! And a lesson to sellers about pricing appropriately. Things change, you want to not have YOUR home sit because it’s been priced too high as well as understanding that unless you have something really special that the insane bidding wars may be over for now.

I have talked to many agents saying that showings are down from earlier this spring when agents were setting overlapping showings and having the home packed full of people for 12 hours per day. Now there are private showings again. There may be open spaces in the calendar. More than one offer may come in but they aren’t seeing the literal STACKS of offers that they were before.

Financing Types:

Cash 11.5%, which is higher than it’s been

Conventional 68.5%, – a little lower than its been

FHA 8.5%, higher!

VA 3%, Still a rough spot! People that use VA are often choosing it because it is a no downpayment loan, which means they are short on cash. If you can’t make appraisal gap guarantees, or add other sweeteners that need ready cash available this can be a VERY tough time to buy.

USDA 8.5% (this is a high number and I wonder if it is a function of the sample size that they had – if they had 2 transactions it could hit this #). These loans are generally for rural buyers.

Seller Paid Closing Costs: are at 12%

Home Warranties: 5.7% – I was able to negotiate this recently as well!

Contingent Upon the Sale of the Buyer’s Property: 8.5% (this seems HIGH to me! I’m still cautious about having this particular contingency, it can be a real weak spot in an offer if you have any competition at all. I would avoid this at all costs or you may have to make it an offer they can’t refuse due to price, or magically find a seller that wants to stay a little longer.

And that is ALL for this week. I’ll be back next week with some more neighborhood profiles. I’ve been AWOL due to this insane market and actually getting a vacation for the first time in YEARS. No regrets. 😉

See you then!