Springtime generally means more people are looking to buy a new home, but those potential buyers are finding there are fewer listings than previous years.
During April there were 710 new listings in the southeast Minnesota market, that’s down 10.5 percent from the previous year, according to the Southeast Minnesota Realtors monthly housing report.
"It’s not uncommon for a house to sell in the first day or two," said Adam Howell, the SEMR Director at Large.
In April, there were 432 closings, 4.1 percent more than last year. Pending sales, an indication of future closings, were down 2.4 percent. On average, houses sold in just 66 days, about ten days faster than they did last year at this time.
"The baby boomers are now in the position to sell their houses, but the problem is getting them to sell their houses," said Howell.
The deepening imbalance between sellers and buyers could explain in part why property values are on the rise, meaning home buyers didn’t wait to place an offer.
Despite the soaring costs of homes and rising 30-year-mortgage rates, buyers say they’re still optimistic.
The median price of a previously owned home in April was $183,500, up nearly 2 percent from a year earlier.
Eric Robinson, a real estate agent for Edina Realty says homes sell quickly when they come on the market – especially smaller, lower-priced homes–causing some buyers to make panic purchases.
"The homes are moving fast," said John Tuseth of Rochester, who recently put his house on the market and is looking for a new home. "You better make quick decisions because someone else will snap it up before you do if you’re not quick at the trigger."
People who work in Rochester have an incentive to look at homes in cities surrounding Rochester like Oronoco and Byron where prices of homes are lower.
"If they don’t mind driving a little further, most times you can get a little bit more for your money for the inconvenience of the drive," said Robinson.
This has many residents doing an exercise in fiscal gymnastics: balancing rent, commuting costs, space, safety, and logistics.
Howell, of the SEMR, says the longer-than-normal winter this year dimmed sales, making it a month behind schedule. Last year, the median sales price slightly increased by 1.7% from March to April. Howell says he expects the housing market to soften, and that May’s housing report will be a stronger indicator on whether housing prices will continue to rise or if they have reached a "plateau."