Minnesota Real Estate Market Slow Down--It's a Buyer's Market!
The average Minnesotan may have noticed it last spring (2005).
The real estate signs popped up right on schedule with the
spring tulips just as the snow melted and ground thawed. Soon
neighborhoods were filled with signs advertising new listings
and open houses. But as Memorial Day came and went, many Twin
City residents began to question why the house down the block
had not sold. At spring baseball practices and graduation
parties, people across the metro were asking, "Hasn't that house
been on the market for over a month?" The usual answer was,
"Something must be wrong with the house." As the summer
progressed and more houses came on the market, observant
neighbors began to realize no "SOLD" signs were going up.
Minnesota homeowners were hit with the reality of a Buyer's
Market.
So what is a Buyer's Market? For many Minnesotan's it may be
hard to remember. After all for the past eight years or so we
have experienced a red hot seller's market. There were many,
many more buyers looking for houses than sellers wanting to
sell. A homeowner who chose to sell could set a price on his
property, put the listing on the MLS and get an offer in days.
Many sellers were faced with multiple offers with some exceeding
the asking price by thousands. Ah, the good old days!
A Buyer's Market is just the opposite. The Twin Cities (and
greater Minnesota) now has an inventory of homes on the market
that is expected to last 3-4 months, with no new listings. In a
typical area, a buyer might have 10-20 homes that will meet
their needs and price parameters. If the buyer is flexible on
location and amenities, they can have upwards of 50 homes to
choose from. With so many options, home buyers are taking their
time, becoming educated, and being very picky before making a
home purchase.
So what should Minnesota homeowners do if they are considering
selling their home? It may be hard to wait out; a typical market
swing can last 5-7 years. (It was a seller's market for almost
eight years, after all.)
*Get your home in tiptop shape! Fix everything! Yes, that does
mean you need to put on a new roof or fix the shower or strip
off the ugly wallpaper in the kitchen. Whatever needs repair or
is outdated needs to be fixed. Project houses do not sell well
in a buyer's market unless they are very, low priced.
*Work with an experienced Realtor to price your home
realistically. The refinance appraisal you received last fall
will not be applicable. It is very important to look at the
current competition in your neighborhood and surrounding areas
and compare all of the amenities. If there is a better deal out
there, the buyer's won't consider your home at all.
*Consider FSBO only as a last resort. This is not a market
where an MLS listing and a sign in the yard will sell your home.
Work with a professional Realtor to get the most from your
investment.
*Be Patient! Even with professional marketing, it will take
time but homes do sell in Buyer's markets. It just takes longer
both in preparation and duration.
Copyright 2006 Teri Eckholm