Duluth home sales tank in July, August

Richard and Marsha Eisenberg are ready to sell the four-bedroom home at 2902 E. Superior St. that they've lived in since 1972.

They've had it on the market since April, first for $319,000, then for just under $300,000, and currently for $274,900.

No nibbles.

"We've had one showing," Richard Eisenberg said on Tuesday from Minneapolis. "Four people came to an open house."

The couple own a townhouse in the Twin Cities where they plan to live to be closer to their three children and seven grandchildren after Richard, 68, retires from the Medical School at the University of Minnesota Duluth, where he's a founding faculty member.

The Eisenbergs, who are only the third owners of the home built in 1924, aren't convinced further lowering the price would help, Richard Eisenberg said.

"I don't see anything moving at any prices," he said. "I just don't know that there are many buyers out there."

The city of Duluth's data on housing sales this summer seem to confirm that observation.

Home sales dropped from the year's high of 95 in April to 28 in August. For July and August combined, 79 homes were sold, down from 170 a year ago. The median sales price in August was $139,874, slightly better than the median price of $137,250 for the year so far. That represents a continuing decline since 2007, when the median price in Duluth was $150,000.

Houses listed for Duluth on the Multiple Listing Service are on the market an average of 96 days, said Jackie Sathers of J S Realty.

Mike Peller of Gables & Ivy Realty, who is president of the Duluth Area Association of Realtors, said there's a 15-month supply of inventory for Duluth housing. That means it would take 15 months at the current sales volume to sell all the houses on the market. That number is unusually high.

"Right now we do have a much higher inventory than normal," Peller said.

From a buyer's perspective, that's great news, he said. "It's a great time for people to buy a house. Interest rates are hovering over 4 percent."

Sathers, whose company has been in business more than 31 years, was sanguine about the market. "We're holding our own and doing quite well," she said.

But a large inventory means a challenge for sellers. "It's a pricing war and a beauty contest," Sathers said.

Eileen Gannon, a real estate agent with Edmunds Co., has noticed the challenge. "What we are finding out is that there are no buyers out there right now," she said.

Gannon told of a couple who have been trying to sell their home in the Congdon neighborhood for a year. They originally listed it at $195,000, took it off the market during the winter, brought it back out in the spring at $190,000, and have it listed now at $185,000.

"They should be able to do this at the price we're selling it at," Gannon said.

But sellers may have to accept that what seems reasonable might not attract buyers in the current market. "We're suspicious that prices haven't come low enough yet," she said.

The Duluth numbers reflect national figures. Last week, the Commerce Department reported that sales of new single-family houses fell 12.4 percent from a month earlier. That came a day after an industry group reported sales of existing homes had dropped 27.2 percent.

One factor in the summer slump could be the end of a tax credit for first-time homebuyers that expired at the end of April, the real estate agents said.

But Peller said he believes that will even out in the latter half of the year. He predicted September numbers for Duluth will be stronger, reflecting closings of deals that were made in August.

"August has actually been pretty decent," Peller said. "We all say how busy we've been in August."