Home sellers in downtown and Northeast are in a good spot these days as a lack of inventory is driving up prices.
The number of new listings on the market in the downtown area is down 27 percent this year compared to 2013, according to the most recent update from the Minneapolis Area Association of Realtors (MAAR).
The median sales prices for downtown-area condos/townhomes is up 44 percent from 2013 — $293,950 compared to $204,000 a year ago.
Elliot Park has experienced the biggest price gains among downtown neighborhoods since last year, according to MAAR’s latest market update. The median sales price increased 115 percent this year — $385,000 compared to $179,000 a year ago.
Fritz Kroll, a real estate agent with Edina Realty's downtown office, said he'd like to see more condo projects in the development pipeline.
"We need developers to start building again," he said. "There are many buyers that want to make their own selections, and empty nesters are not in a rush to move. There is a lot of upward pressure on prices because there is so little inventory."
Scott Parkin, owner of Northeast-based Verve Realty, said buyers (predominately empty nesters) are looking for a similar floor plan that is sold out — a two-bedroom unit roughly 1,600 to 1,800 square feet with a two-car garage.
The number of new listings on the market in Northeast is also down — 62 this year compared to 77 a year ago. Prices have increased more modestly than downtown with the median sales price increasing 10.5 percent this year over 2013 — $152,500 compared to $137,950 last year. The inventory of homes for sale in Northeast is down 24.5 percent year to date.
Windom Park has seen the biggest increase in median sale prices since last year among Northeast neighborhoods. The median sales price has jumped 163.7 percent — $283,449 compared to $107,500 a year ago.
Parkin said real estate in the Old St. Anthony area along the riverfront remains popular, as do tudor homes on Stinson Parkway.
The real estate trends in downtown and Northeast mirror market activity across the metro area. Inventory levels are hovering near a 10-year low, according to MAAR, and the median sales price has steadily been on the rise for the past 25 months.
“There’s a lot of excitement and positive energy out there, especially among sellers,” said Emily Green, president of MAAR. “Some would-be sellers have been lifted out from underwater by rising prices and less competition from foreclosures, while other move-up buyers are also eager to buy.”
Barb Jandric, president of Edina Realty, has tips for buyers and sellers to navigate the 2014 spring market.
Sellers with homes priced fairly and in move-in conditions in desirable neighborhoods will likely find themselves facing multiple offers, she said, adding buyers will have to be prepared to act quickly.
“Chances are you will have to make an offer more quickly than anticipated, and things can move very rapidly in a multiple offer situation. So the most important thing to do is to be prepared,” she said.
Buyers should be pre-approved by a lender and have cash on hand for earnest money.
“If there are already multiple offers on the table, there’s only one opportunity to make your offer, so it must be your best,” she said. “At all costs, avoid making an offer with any contingencies, with the exception of making it contingent upon a home inspection. If your home doesn’t have any major issues, such as a cracked foundation or a leaky roof, which a home inspection should uncover, a ‘clean’ offer with no contingencies is usually more attractive than the highest offer with contingencies.”
As for sellers, Jandric urges home owners to act now.
“If you’ve been waiting to sell, the time is now," she said. "The market clearly needs more inventory to keep up with demand. Homes that are coming on the market are selling quickly and getting very close to their asking price, and buyers are benefitting from historically low interest rates so they are making their move now.”