Four Explanations
“Man came by to hook up my cable TV
We settled in for the night my baby and me
We switched ’round and ’round ’til half-past dawn
There was fifty-seven channels and nothin’ on”
–Bruce Springsteen; lyrics, “57 Channels (And Nothin’ On)”**
It’s not just Buyers’ imagination: there really IS a dearth of Twin Cities housing inventory at the moment.
Specifically, there are only 12,202 listings metro-wide right now.
That compares with more than 30,000 units at the height of the market almost a decade ago, and translates into a super-tight 2.9 months of inventory (4-5 months is considered balanced).
Seller’s Market Redux
Given that shortage of inventory, to many Sellers there appears to be even less for sale than there really is.
What accounts for that perception?
Here are my four theories:
One. A disproportionate percentage of the properties for sale are leftovers.
Warren Buffett famously observed that “you don’t know who’s swimming naked til the tide goes out.”
Last Summer, thousands of new-to-the-market Twin Cities home sellers priced their homes, aggressively, in the wake of the sizzling hot 2014 Spring market.
What happened next?
The market decelerated — and lots of those homes turned out be overpriced.
Some of those listings cancelled, others rented, but many are still sitting on the market, at prices that are lower — but still not low enough.
“Blink and You Missed It” Listings
At the other extreme (“Theory #2”), there are all the homes Buyers missed out on because they sold 
soon after debuting on the market.
If not before.
The leading venue for such deals: Edina Realty’s proprietary “Network One.”
See, “Have a House/Need a House“; “4 Post-New Year’s Deals; Average Market Time? .25(!) Days (Note the Decimal)“; and “Does Networking Really Work?”
While plugged-in Buyers’ agents are finding homes for their clients before they come on the market, more casual and/or slower-moving Buyers — or ones watching the market on Zillow or Trulia — always seem to be a half-step behind when it comes to hot, new listings.
Three. Too-narrow Buyer criteria.
Buyers looking for a nicely updated, 4 BR/3 Bath home with around 3,500 square feet in Plymouth or Woodbury . . . have lots of nice choices.
However, someone who has their heart set on a Mid-century Modern in high-demand East Edina . . . may have to be (very) patient.
Four. Unrealistic price criteria.
Returning to those nicely updated, 4 BR/3 Bath Plymouth and Woodbury homes with 3,500 square feet . . .
While every home is unique, the going price range for a Plymouth or Woodbury home meeting those criteria appears to be $425k – $500k now.
So, a Buyer hoping to score such a home for high $300’s (or less) is looking at very slim pickings.
News flash to such Buyers: even if such a home falls into your price range, beware: there’s usually an explanation (or three).
Like, it’s a short sale or foreclosure, full of mold and/or next to a freeway.
Advice to Buyers (in ANY Market)
Net it all out, and what’s the bottom line for Twin Cities Buyers right now?
Every market presents challenges and opportunities.
However, whether it’s a Buyer’s market or Seller’s market (like today’s), Buyers improve their odds of getting the home of their dreams if they work with a plugged-in Realtor; do their homework; have their financing lined up; and are prepared to move quickly on a home that meets their (realistic) criteria.
**In case those “57 channels” struck you as a mite low: Springsteen wrote the song way back in 1992.
Today, the number of channels would 500 or 1,000!
