Locked In to Historically Low Rates, Potential Sellers Stay Put
Spring home sales are following a pattern seen last year: ones that are on the market are selling fast. Jennifer Buhring found that out firsthand. Her Maple Grove home sold in just a few days.
“They talked about the first weekend, putting the house on the market on Thursday and by Sunday they hoped it would be sold, and I was very surprised. That’s how things played out,” said Buhring.
By last Sunday Buhring received eight offers on her 4-bed, 3-bath home. Listed at $399,900, the home sold for considerably more.
Realtor Michael Doyle said homes in that price point go fast due to inventory levels that remain near historic lows. Doyle says the inventory shortage continues to be a struggle for first-time homebuyers.
“It’s still tough for the first-time homebuyers because there’s a lack of good quality inventory,” said Doyle with the Doyle Real Estate Team. “We’re about a third of buyers now actually purchasing new construction because they just cannot find a suitable, existing home to buy.”
Another challenge, said Doyle, is potential sellers are locked in to lower mortgage rates, making it less enticing to put their homes on the market, contributing to the inventory shortage. While rates rates have stabilized around 6 percent, a relatively low rate in historic terms, many homeowners refinanced during the pandemic when rates plummeted.
“It’s kind of a struggle with the move-up buyers because you’re talking to somebody in a house that has a 3 percent interest rate,” said Doyle. “That is why we’re having a shortage of inventory.”
Buhring’s situation was different. She and her husband are retiring and decided to move a lake home in northern Iowa.
“There’s a lot of emotion in all of those things. And they kind of came together with selling the house,” Buhring said.
Also See: MSP Home Tour Features Plymouth Remodel, New Design Ideas