Finding a home tougher than ever

Published 11:35 am Tuesday, April 11, 2017

MANKATO, Minn. –– The number of homes for sale nationwide is running close to a 20-year low, with roughly 5 percent fewer homes on the market nationwide than a year ago.

With a strong job market, low mortgages and rising pay, people are eager to buy homes in all price ranges right now but finding one is the problem, the Associated Press reported. 

Minnesota-based realtor Angie VanEman-Riley said when she gets a new listing for an entry level home, she may never get the chance to put in on the market.

“I have some ‘coming soon’ houses on my Facebook page. I have one for $145,000 and I’ve had eight requests on it already and it’s not even hit the open market,” she said.

For many would-be buyers, especially those in markets where prices have risen sharply in the past decade, this increases competition for fewer homes and creates more pressure to outbid rivals and accept other less favorable deal terms.

According to an analysis of housing data done by the Associated Press the decline in houses on the market is even more dramatic in the Mankato area than in many places.

Homes on the market in parts of the small, southern Minnesota town were down 26 percent in February compared to a year earlier. In North Mankato the decline in the number of homes for sale was 52 percent.

The number of houses for sales nationwide is down 6.4 percent from last year, according to the National Association of Realtors. At the end of February, there were 1.75 million homes for sale nationally.

However, with the housing stock tight, home builders are seeing plenty of customers, said long-time home builder Bill Feder.

“We’re looking to be as busy as we’ve ever been,” said Feder, who is also based in Mankato. “We’re digging (basements) already. Usually we have three feet of frost in the ground in early April.”

He said they’re building everything from entry level houses to upper-end homes.

“We’re all over the place. Baby boomers are in the (mid-range) homes and want to move up,” he said.

“Right now, when you figure in your (tax deductions) you can build a home for the same as it costs to rent. Mankato has high rent,” Feder said.

Still, the cost of both existing and new homes has risen. With lumber and other material costs soaring, Feder said even entry level homes can come in at $250,000, which includes about $50,000 for a lot.

For first-time buyers who aren’t familiar with what’s out there at different prices, the feeding frenzy on entry level homes can be daunting, according to VanEman-Riley.

“They might be one of seven people looking at a house that day and they almost have to decide on the spot. They don’t have time to go home and think about it and compare things,” VanEman-Riley said.

As a result, many homes end up selling quickly and often over the asking price, which is common in a seller’s market, according to the National Association of Realtors.

Besides a lack of entry level homes, VanEman-Riley said homes in the $350,000 to $400,000 range are also rare.

One part of the market that is flying high right now, both nationally and in Mankato, is upper-end homes, a sector that dragged during and after the recession.

“We’re seeing a lot in the $600,000 to $800,000 range selling. And we’re seeing a lot of them paying cash. It’s crazy,” VanEman-Riley said.

Krohn writes for the Mankato, Minnesota Free Press.