The current inventory levels in the twin cities area as of February 2012 is 21,725 properties on the market. This is the lowest level of available homes since 2005 when properties were on the move! This drastic drop in inventory has brought back an increase of multiple offer situations on properties that are priced to sell. We are seeing it primarily in the lower price ranges as this is still where the majority of sales are, but we also seeing it with the higher price ranges when a property prices the home to sell quicker.
There are two areas of the market where this scenario is more common. These two areas are where we have seen the most activity in sales. The first is the first-time home buyer market as this makes up about half of the current sales in today’s market. The second area where multiple offers are common is the distressed property market. Foreclosures and short sales are being picked up at a discounted price, and if they are positioned where they are a great deal they are moving quickly. The distressed property market is also making up about half of the current sales. These two areas are also overlapping often. When you have a distressed property in the first time home buyer price range, there is a high probability that you could end up in a multiple offer situation.
When a property ends up in a multiple offer situation, these properties are often selling at or above their asking price. Due to the quick and high selling price, many banks have started purposely listing properties so promote multiple offer situations. Occasionally, some traditional sellers have used this same tactic to sell their property quickly and at a strong price.
Buyers that are looking at either first time home buyer properties, distressed properties, or both, are often getting discouraged with their home search. Many of these buyers have missed out on a few multiple offer situations before they finally are able to win out on a multiple offer deal.
Over all, in today’s market we have a shortage of available properties on the market, and therefore many buyers are in competition for those properties that are available. Although, this does not mean that owners are able to get an inflated price for their property as buyers are not willing to overpay for a property. For sellers, if you are able to list your property where you are competitive, you will likely move the property in a timely matter as we are seeing such a shortage of properties. Even more, if you want to get a little more aggressive, you will likely find yourself selling quickly and for a strong price.
Brian Webb represents clients in Hudson, River Falls, Stillwater, Woodbury, Oakdale, Cottage Grove, and the surounding Twin Cities Areas and Western Wisconsin. He assists clients with buying, selling, investing, and property management of Twin Cities homes. He offers free advice and consulting services and can be reached at HomesByWebb.com.