Keys to a successful, not stressful spring housing hunt in the Twin Cities

For homebuyers, the only fate worse than falling into a bidding war is losing one.

Though the Twin Cities housing market isn’t as hot as it was two years ago — when mortgage rates were at record lows — battles between buyers are still common, and happy sellers keep reaping the rewards.

More than a quarter of all houses in the metro sold for more than the original asking price during February, according to Redfin. That’s on par with last year but significantly higher than the national average.

The situation is especially challenging for first-time buyers, particularly in the in-demand price range of $250,000 to $350,000. In March, previously owned houses in that range sold in just 37 days, the fastest pace of any bracket.

Here’s expert tips for the battle-weary buyer in this busy spring season to help land a home without busting budgets.

The housing market in Minnesota is seasonal. Homebuyers in Minnesota don’t like the cold, nor do they like shopping in the summer, when many people are busy planning their summer getaways to the lake.

So if you’re looking to avoid the competition, follow the thermometer.

“We’re a seasonal market,” said Jennifer Livingston, an Oakdale sales agent and president of the St. Paul Area Association of Realtors. “In our market, sometimes even in July, you’ll see houses sit on the market a little longer.”

Sales data backs that claim. House shopping in Minnesota typically peaks in June, according to an analysis of house showings by the Minnesota Realtors. Those showings taper as the temps fall; the fewest number of house showings happens at the beginning and end of the year, when the temps are coldest.

“That’s usually a better time to get a deal when they’re out there,” said Justin Fox, a sales agent based in Cottage Grove. “But the sexy ones still go fast.”

Fox noted house shopping in the fall and winter does have its drawbacks. There are fewer buyers to compete with, but there are also fewer sellers. House listings tend to plummet at that time of year. But the sellers willing to brave the cold are often those most serious about making quick a deal.

Another strategy for those trying to time the market, Fox said, is to check the calendar holidays and the radar for inclement weather.

“I’ve gotten some wicked deals during a snowstorm when no one wanted to shop,” he said, “or during the week of a holiday.”

On average, houses in the Twin Cities sold within 58 days last month, but plenty of them take much, much longer.

Stale listings should be prime considerations for burned-out buyers. In today’s market, sellers start itching after just several days on the market.

“If it’s going to sell fast, it’s usually in the first week,” Fox said. “After the first week, you’re less likely to compete.”

If you’re pursuing this strategy, Fox said it’s often best to start negotiating with the seller before they’ve advertised the first markdown. He’s seen sellers cut their asking price then quickly receive multiple offers, fetching them a price that’s ultimately close to their original request.

“If I have people who don’t want to compete, I say, ‘Wait a week [after the property hits the market],’” he said. “If they haven’t sold, they wonder what’s going on, and they’re second-guessing things, and it’s a good time to swoop in.”

Real estate agents can help you identify listings that have been on the market longer than normal, but you can also do it yourself on websites that let you filter search results by days on market. On Zillow.com, for example, under the “more filters” tab, there’s a search field called “days on Zillow.” You can also sort your search results by oldest to newest listings.

The price history on real estate websites also lets you see when those properties listed and whether or not there’s been a price reduction. Sellers who have dialed back the price are often the most eager to make a sale. That’s also an indication you’ll be less likely to encounter competition.

Fox said with houses selling so quickly, many sellers are dumbfounded and frustrated if they don’t receive an offer within the first several days on the market. So many are willing to offer a deal within the first few weeks on the market.

He said it’s often good to target properties approaching 30 days on the market, which is sometimes another benchmark to trigger price cuts.

If you’re willing to share a wall with your neighbor, you’re also far less likely to compete with other buyers.

That’s because condominiums take much longer to sell than freestanding houses. On average, condos in the Twin Cities metro took about 80 days to sell, nearly twice as long as single-family houses, according to Minnesota Realtors.

That’s in large part, some agents say, because of homeowners association fees. Those funds, put toward managing and maintaining the condo building, have been on the rise. Higher insurance and maintenance costs have forced many associations to increase those monthly dues, making the monthly cost of ownership slightly higher than it’s been in the past.

Condos also tend to be far less expensive than most houses. The median price of condos in the Twin Cities was just shy of $207,000 last month. That’s about half the price of a single-family house.

“Certainly, there is opportunity there because there are more of them on the market,” Fox said.

Fox cautioned, though, a condo in tip-top shape and competitively priced is still highly desirable and will sell quickly.

“Anything that’s [interior designer] Joanna Gaines-style that looks nice in the pics and is priced right, those are the ones that go quickly, whether it’s a townhouse or condo,” Fox said. “And if it’s underpriced, that’s going to go into multiples [for offers].”

Like condominiums, newly built houses also tend to take nearly twice as long to sell as a single-family house. But not everyone can afford that option.

The median price of a new, single-family house last month in the Twin Cities metro was $540,000, about $140,000 more than the price of a previously owned home.

Homebuilders have scrambled to take advantage of the shortage of existing houses by building ones that are ready for buyers who don’t want to wait for construction. During the pandemic, builders were selling houses as quickly as they could build them. Today, though, many builders have enough new houses available to last several months.

Builders, however, are leery about maintaining that inventory for too long.

If you’re a buyer who wants to be in the driver’s seat, Fox suggested shopping for a new house at certain times in the fiscal year when many publicly traded building companies are trying to burn through their stock of unsold homes.

“I have gotten wicked deals at the end of the quarter,” he said. “If it’s already built, those are negotiable. Most builders, even local ones, have mortgages they’re paying on, so there’s pain there.”