When I became a Realtor in December of 2002, the housing market was already on its long march up to levels that no one thought possible. By 2005 we had hit the peak of the market but 2006 was still extremely strong too.
One of the things that’s been largely missing since 2005/2006 is the situation where several buyers are interested in the same house. We did see this phenomenon in 2008 with short sales but that was mostly due to the long time it could take for responses from the bank (3 weeks to 3 months in many cases) providing a huge window of time for buyers to submit offers.
2009 started much the same way but since approximately March 1st we’ve seen a huge increase in buyers in the market and with that, many more multiple offers. In the last 45 days I’ve been in multiple offers on the following:
- A foreclosed home in Coon Rapids that had 3+ offers
- A foreclosed home in South Minneapolis that had 13 offers
- A foreclosed home in Shakopee that had 6 offers
- An estate in Coon Rapids that had 2 offers
These were all properties that I had buyers write offers on… if you count all the houses that my buyers had wanted to see that we skipped due to the multiple offers already submitted or already having an accepted offer and I’d say it was about 1 in every 3 houses on their list.
My experience has been that these multiple offers are strongly clustered on short sales, foreclosures and estate sales as these are the sellers that have the most motivation to price properties to sell quickly. The occasional Traditional Seller still garners multiple offers (much more so this year than last) but many of these sellers are still pricing properties slightly (or sometimes drastically) above market value so their demand is understandably less for many buyers today.
The Minneapolis Area Association of Realtors released March market statistics last Friday that help explain why our market is seeing more multiple offers today than we have seen in several years:
- Prices have fallen substantially since 2005/2006
- Interest rates are near all-time lows
- The Housing Affordability Index has hit ALL-TIME HIGHS
- Inventory of homes for sale is down 17.5% from this time last year
- The number of houses available per buyer is down 23.5% from this time last year… a 2+ year low!
- Pending Sales (accepted offers on their way to closing) are up 18.6% so far this year
Combine all those data points together and it is easy to see why there could be strong buyer competition for the best houses (in terms of total VALUE, not PRICE alone) and given that our buyer activity typically stays strong into July I predict we’ll see many more multiple offers in the coming weeks and months.
[...] may want to subscribe to my RSS feed. Thanks for visiting!Ok so I’ve already discussed the surge of multiple offers this year… in fact I just talked about it two weeks ago. In just the last two weeks I’ve seen [...]
[...] as January and February it was rare to see multiple offers on many foreclosures but since March 1 the multiple offer has become almost as common as the foreclosures themselves! Homes are being priced much better by the banks than they have been in the past and with the [...]