Twin Cities housing market heating upby Jessica Mador, Minnesota Public Radio
St. Paul, Minn. — In their sunny St. Paul apartment kitchen, first-time homebuyers Evan and Anna Schwartz relax on a weekday evening.
They know exactly what they're looking for in a house, Anna said.
"At least four bedrooms and at least three baths, and a good size living room and kitchen," she said. "And also the location is also very important. We want to live in a good school district and easy access to schools, community centers, a gym and easy access to all of the highways."
So far, the newlyweds, both PhD's, have looked at about 20 homes in the inner ring suburbs.
They're not looking for a starter home, Evan said. Anna, 32, and Evan, 29, want something bigger their family can grow into. But finding what they want in their price range of $250,000 to $450,000 has been tougher than they expected.
After several years of bad news, the housing market is showing signs of rebounding. Although home prices continue to decline, the pace at which they decline is slowing.
And homes sales are heating up this spring in the Twin Cities as buyers compete over a tight inventory of homes.
"There are a lot of people out there wanting to buy and we are finding that the good houses are going quickly," Evan said.
They want to get into a home by the beginning of next year. They hope it doesn't take that long, Anna said.
"Right now, everyone knows it's a good time to buy with the historically low mortgage rate and the ten-year low housing prices," she said. "We definitely want to take the opportunity to get a house, if we can find the dream house. That is a condition. We are not going to settle for just any house. It has to be a house that we are happy with."
The numbers show lots of buyers are being choosy this year.
The most recent data from the Minneapolis Area Association of Realtors show inventory from February was down more than 27 percent over the same time last year. This is the biggest monthly drop in inventory since the beginning of 2003, when the association began tracking data.
"Inventory is low in the first time homebuyer market as well as the move up," said Cari Linn, president of the Minneapolis Area Association of Realtors. "Finally those move-up buyers can move. They are selling their homes and they are moving up into the next housing bracket so that inventory is slim as well."
Prices in the metro are still dropping but seem to have leveled. Unseasonably warm weather, low prices and historically low interest rates are drawing homebuyers back into the market, Linn said.
Sellers are seeing multiple offers again. This year is a big change over last year when buyers were more likely to hold back for a good deal, said St. Paul-based realtor Dennis Breining.
"I ran into that a lot in 2011 and a fair amount in 2010, actually, where buyers were just afraid to make offers because they felt like if they waited the price would probably come down even further," Breining said. "There were many, many listings in virtually every neighborhood around the Twin Cities where that was absolutely true."
Breining says this year, sellers have to work harder to attract buyers.
"They have to price right and they have to do a certain amount of updating in this market to attract today's buyers," he said.
Sally Rousse, 48, didn't have to update her home. Her 11-year-old, 3,500-square-foot home sits on a third of an acre near Cedar Lake. But she did lower the price by almost $150,000 to just over $700,000 since she first tried to sell last year.
When the house didn't sell after a few months, Rousse took it off the market.
"I guess I felt I took it personally at first. I thought 'Why don't they like my house.' and I didn't really understand the market and how it works, and how people wait and wait and wait and see what'll happen and if you'll drop the price," Rousse said. "I didn't really understand that we needed to market it."
The market in Rousse's price range near the Minneapolis lakes is slow and prices have dropped significantly. She needs to sell her house this year to cut her family's expenses.
"Every month that we stay here is more money that we are spending that we could be saving for things that we want to do," she said.
Rousse plans to relist her home to try and sell it this month.
"You only need one person to love it. We don't need everyone to love it. We just need the right person to love it," she said.
Later this week, new data will come out about the Twin Cities market in March, giving an indication of how the rest of this year's homebuying season could look.
- Morning Edition, 04/09/2012, 6:40 a.m.