Frustrating time to be a home buyer in Duluth area: Strong seller's market continues this spring and summer
As if buying a home weren't stressful enough, the region's rising prices and low inventory are leaving a lot of house hunters out in the rain.
"We have a lot of frustrated buyers out there right now. We've seen a lot of tears and a lot of anger," said Tom Henderson, president of the Duluth Area Association of Realtors. "This is going to be the year to sell."
In June the area's median home sales price rose nearly 10 percent from last year to $174,500, while the number of homes for sale dropped 9 percent.
Part of the reason behind the lack of listings is the speed at which homes are selling, which is putting pressure on sellers to find their next home before offering theirs for sale.
"That's mostly the story I've been hearing from a lot of people — when I go out to potentially list their homes they are afraid to list," said broker Karen Pagel Guerndt with Real Estate Services. "They know everything is moving rapidly and they can't find the quality they're looking for."
She told of a retired couple who sold their house quickly but had a deal fall through on their next home, leading to their buyer backing out and the whole process starting over earlier this year. Then there have been the first-time homebuyers who are missing out when they don't make an offer as fast as they might need to.
"It's frustrating for them because there isn't really the inventory to be thoroughly looking and investigating," Pagel Guerndt said.
Henderson said the shortage of options is leading to more offers coming in above asking price — occasionally too high following appraisals.
"We know this can't keep on going the way it's been going," he said, warning of a bubble. "This is the third year in a row we've had multiple above-ask offers."
While the region, and really the nation, are all seeing a similar housing crunch, it's easier to be a buyer in some parts.
"While current single-family properties in Duluth in the $100,000 to $200,000 (range) have been on the market an average of 43 days, homes in the same price range in Cloquet are closer to 67 days on market," said Maranda DeSanto, CEO of the Duluth Area Association of Realtors. "For Superior, that number jumps to 129 days on market."
Prices, days on the market and the number of listings vary by neighborhood too, not to mention timing.
Home prices are likely to start coming down in September, as they do every year once the spring and summer real estate rush subsides and sellers get a little more eager to move out before winter comes.
"If you're considering entering the housing market, all is not lost," DeSanto said.