“The Preference for Pottery Barn” (Decor)
Contrary to popular perception, not every Twin Cities home new to the market is immediately getting snapped up in multiple offers right now.
What kind of home is?
Here are the four attributes that such homes seem to most often share:
One. Price point, i.e., they occupy the lower rungs of the housing market.
Most of the homes attracting multiples are financially within reach of the biggest pool of Buyers. In the Twin Cities, that’s under $500k or even mid-$300’s.
Conversely, I can’t recall any $1 million-plus listings — at least recently — that went in multiples (agents??).
If you need an image of the prototypical hot listing, think, “an updated 1.5 story with 3 BR/2 Baths and 2,000 finished square feet that’s walking distance to the lakes for mid-$300’s or less.”
(Did I include, “and has nice character and curb appeal?”).
Two. Asking Price. One of the biggest myths in residential real estate is that you can’t overprice in a Seller’s market.
Unh-unh.
I can personally attest to at least 3-4 Twin Cities neighborhoods where overpriced homes came on the market last Summer and promptly . . . sat.
When newer, nearby listings entered the market a few months later, the result was a supply logjam (a few have yet to clear).
Three. Condition. Younger Buyers with good jobs and credit qualify for still-cheap mortgages.
But downpayments for such folks are harder to come by — never mind money (and time) for post-move in fix up.
Result: there’s a strong preference for homes that are “done” (perhaps too strong, given the premium such homes seem to be commanding).
Four. Neighborhood amenities.
Super hot Twin Cities neighborhoods like Linden Hills, Fulton, and Nokomis (Minneapolis); South Harriet Park and Morningside (Edina); and Fern Hill (St. Louis Park) are close to good restaurants, coffee shops, and groceries.
Proximity to lakes, parks, biking and walking trails are huge, too.
Ditto for public transportation, including Light Rail.
Last but not least, especially for slightly older Buyers with young kids: good public schools.
Bottom line: while multiple offers grab a big share of the media’s attention — and are certainly fun to blog about(!) — they command a relatively smaller slice of the housing market at any given time.
