18 Mar Real Estate in MN is a Fractured Market. What Does that Mean for You?
Causes of a Fractured Market
We are seeing a fractured market right now meaning there is low inventory in single family homes from $200,000 – $400,000 and far higher inventory in the $400,000 and above range. The tricky situation with an unbalanced inventory is how intertwined the two sides are. The higher priced single family homes are usually bought by people leaving their $200,000 – $400,000 dollar houses. However, the low inventory of this price range shows these buyers aren’t on the market. This leaves the high number of higher priced homes sitting on the market with no demographic to buy them.
Sellers at the lower end of the price scale will benefit. You are rare, which means that your house will be sought after. You’ll also have plenty to choose from when upgrading to your new house. As for Sellers from the higher end of the price range, you need to be competitive with pricing and willing to negotiate. Your choices will depend on the type of house you are looking for next. If you are aiming for a smaller single family home or a townhome you will have to fight for it. If you are aiming for a duplex or moving into senior living you will have far more choices.
I crunched the numbers and made a chart showing the fractured market. These are all the listings from 01/01/2019 to now. As you can see there isn’t a single south of the river suburb that doesn’t have more homes in the $400,000 and up price range than below it. Lakeville is especially skewed with 26 vs 92! In a market with low inventory on lower-priced homes, luxury homes above $400,000 will have to play the game different.
With the market we’re seeing now you should be accepting Contingent Offers. There aren’t enough luxury home buyers to wait for a non-contingent offer with Spring Market officially starting. As things get busier, I’m hopeful we’ll see more inventory in the $200,000 – $400,000 range, and consequently, more buyers for $400,000 and above homes.
For comparison sake, I made a chart showing the houses sold from 01/01/2018 to now. Here you see plenty of homes in the $200,000 – $400,000 range. In fact, these numbers show the opposite of what we’re seeing now. This might mean the inventory will shift during Spring Market, but it could also mean the large number sold last year will lead to less this year. Unfortunately, inventory is low all over so far this year. Even with some improvement, low inventory problems will continue.
For more Real Estate statistics and information of the inventory read some of my other blog posts including:
If you have any questions, please let us know. We’re always happy to help. You can give me a call at 612-889-6496 or send an email to [email protected]