As is the case throughout the metro, the Southwest housing market remains stagnant — but that doesn’t mean it’s impossible to sell a home, and sell it quickly.
The key, local Realtors say, is offering a home well suited to modern lifestyles and the realities of the post-housing bubble economy.
Realtors say many buyers these days demand features like open, centrally located kitchens; main or upper-floor laundry (after all, who wants to spend time in a dingy, damp basement?); master bedroom suites; proper insulation and energy efficiency improvements; and updated siding.
Linden Hills resident and Realtor Ben Kolkman reports 10 percent of homes that hit the market in Southwest and East Edina through mid-April this year sold in two weeks or less. Almost all of them either came equipped with the aforementioned features or at least had floor plans making remodeling relatively inexpensive.
Another important factor is the “move-in readiness” of a home.
Tighter lending guidelines make it harder for homeowners to access the credit needed to renovate once they’ve moved in, meaning that move-in-ready homes stand a much better chance of being snapped off the market than fixer-uppers.
Brad Palecek, an Edina Realty Realtor, does a lot of business in Southwest, particularly with condos.
When asked what advice he gives to prospective sellers, he said: “For me, that’s a pretty simple answer — it’s all about homes that are in move-in condition. It wasn’t all that long ago — just a couple years — when it was easy for buyers to originate a home equity loan or to refinance, so fixer-uppers tended to sell pretty quickly.
“Now,” he continued, “with borrowing and lending becoming very, very difficult, accessing credit or refinancing isn’t possible for many people.”
By and large, housing market remains stagnant
Some Southwest homes are selling quickly, but data shows that quick turnovers are the exception, not the rule.
According to the Minneapolis Area Association of Realtors, from April of last year through this March, for sale homes in Southwest spent an average of 120 days on the market, about four times longer than in 2006.
The days-on-market number is even larger in Calhoun-Isles, where it took an average home 171 days to sell between April through March, compared to about 30 days five years ago.
Median sale prices have rebounded to above pre-recession levels in both Southwest and Calhoun-Isles, but sluggish turnover and the steady decline in the number of closed sales indicate that the housing market here, as elsewhere in the metro, remains stagnant.
Realtors report there is reason to be optimistic about the medium-term future of the Southwest housing market, however.
Pat Paulson, a Realtor with Exit Realty Metro, has been working in the Southwest market since the mid-1980s. He said 25 years ago, “many prospective buyers were moving out of the city, but now I’ve seen that trend reverse somewhat.”
Southwest Realtor Tom Kendall said he’s noticed the same trend.
“What we’re also seeing at open houses is that a lot of suburban folks are coming into the city,” Kendall said. “Higher gas prices have people worried and they want to be closer to downtown, so we have a strong reverse migration going on.”
The question many prospective buyers face, however, is whether fuel savings, good schools and tree-lined streets are worth the added cost of buying a home in Southwest.
After all, though open kitchens, master suites and new siding are nice, the availability of such features means little if the asking price for a home is too high.
On that note, Palecek said that although he is currently working with two or three clients who are interested in moving from the suburbs into the city, “there is definitely a very big shortage of homes priced under $200,000” in Southwest.