A housing market in recovery

Southwest sees low inventory of homes for sale

A home at 3121 E. Calhoun Pkwy went on the market in February for $1,079,000. Credit: Submitted image

Southwest Minneapolis’ fastest-selling houses currently stand in the Armatage neighborhood, selling in 2013 for a median price of $250,000 in the Southwest corner of the city. Close runners-up include the nearby Kenny, Windom and Lynnhurst neighborhoods — all of which have been selling in about 50 days, almost half the time of the year before.

“A couple of years ago, it was depressing,” said Sandy Thometz, a realtor based out of Coldwell Banker Burnet’s Minneapolis Lakes office. “People have more confidence now.”

On a recent Tuesday morning, realtor Cotty Lowry breezed through a $1 million home Thometz was showing on East Calhoun Parkway. Lowry makes the rounds at broker open houses every Tuesday. 

“All the whole year, there hasn’t been much to go see,” he said. “But there were a ton of nice ones last Tuesday.”

Nearly every metro-area housing market in the country started or continued to recover in 2013, according to the Minneapolis Area Association of Realtors. Minneapolis’ median prices have increased 30 percent since 2009, a faster increase than the Twin Cities’ overall 14.6 percent improvement. 

“The downturn affected Southwest a lot less than other areas,” said realtor Tom Stutsman. “The chain of lakes area has gotten so expensive, it’s had a ripple effect. … It makes the [surrounding] neighborhoods that much more popular as the prices are more attainable.”

Real estate agent Larry LaVercombe said his clients are often looking at the boundaries between schools to decide where to buy. 

“The schools that serve our neighborhood are very high-demand schools,” he said. 

The Minneapolis inventory of homes for sale was quite low early this spring, though realtors said there were plenty of buyers. 

Thometz said she recently had 19 showings the first day a Fulton house came on the market. 

Real estate agent Corey Collins said he’s seeing multiple offers again, something that’s been a rarity the past couple of years. Even duplexes and triplexes are seeing multiple offers, he said.

Home prices are recovering, particularly in neighborhoods like Lyndale and Whittier, which saw median sale prices increase 47.9 percent and 79.3 percent respectively from 2012 to 2013. Other Southwest neighborhood home prices increased an average of 10 percent in the past year.

Agent Judy Shields said even though inventory is low and demand is stable, sellers should take care not to inflate their listing prices. 

“These prices are still beat up from the bubble burst,” she said. 

Thometz is also seeing buyers a little more conservative with their money. Back in the ’90s, she said, her clients wanted to buy as much house as they could afford. 

“Now people are a little more conservative with their money, and they’re a little bit tentative on the economy,” she said. “They will stay in their house with two kids and be a little crammed.”

Another notable market trend in Southwest is the prevalence of new construction. 

“There is an unbelievable amount of teardowns and new construction activity, especially in Linden Hills,” Lowry said. “I’ve never seen anything like this.”

About half of homes priced $700,000 or above in Linden Hills and surrounding neighborhoods are new construction, he said. 

Lowry and other agents think the cold winter weather slowed the market, but inventory levels should pick up in the coming months as more homes come on the market.

“I think we’re going to see a break in the logjam this spring,” LaVercombe said.

 

Note: Market stats are from the Minneapolis Area Association of Realtors