Yesterday I wrote an offer for a buyer client on a Minneapolis Condo that we knew the seller already had multiple offers. Multiple offers in this real estate market you ask? Yes and the trend will begin to ripple across the market as we see new listings drop (-16.1%), pending sales increase (11%) and closed sales increase (8%) year over year.
The North Loop condo was priced right--arguably under market value, in a financially healthy building with good resale trends. There were already 3 offers on the condo and our strategy was to offer 5% above list price with zero closing costs and non-refundable earnest money to combat the fact that the buyer was financing some of the purchase price as opposed to a cash offer to sweeten the deal.
So believe it or not, we were in a multiple offer situation and...lost to another buyer. When we went submitted an offer we knew there would likely be stiff competition and there was a possibility that we could lose it. Why would anyone in their right mind offer higher than list price you ask? Well inventory has decreased almost 23.6% in the twin cities market--and the good inventory is getting hard to come by.
When the condo came on the market I knew it wouldnt stay long. It was priced competitively; there is a limited selection of this particular type of condo; and it's priced under $250,000 (from what I'm dealing with, a fair amount of buyers in the market are looking at this price range). What surprised me was that the condo had been on the market for 3 days and there was already a pile of offers on the table with more coming around.
Apparently, I'm not the only one seeing this. During the last 30 days, a few other Downtown Realtors mentioned that they were in similar situations, either getting multiple offers for their listings or in a multiple offers situations when representing the buyers. Are we seeing a glimpse of a buyer come back? With rents rising 11% on average year over year and the bottleneck of buyers that have come off the sidelines the logic is starting to make more sense. It may not necessary mean that it will have a significant impact on prices right now but if this kind of thing continues and happens broadly, we know prices are more likely to stay stable for a while.
Back to 2007? Hardly. But we may be starting to see some more balance of power between buyers and sellers, at least for the best deals in the Minneapolis condo market.