MANKATO — The price of homes continues to rise amid an ongoing shortage of listings and multiple eager buyers making offers.
“Overall the market’s been very good,” said Mankato Realtor Dar Vosburg. “I already exceeded what I did last year and last year was my highest in the 24 years I’ve done this.”
The median price of homes sold in the local region jumped to $242,450 in July, according to the Realtors Association of Southern Minnesota.
That’s up 10% compared to July of last year and up 26% from 2019 when the median price was $192,900.
But a trend of low housing stock that started in the spring of 2020 continues. “There’s still a lack of houses. It’s still pretty slim,” Vosburg said.
There were 235 new home listings in south-central Minnesota in July, up just slightly from the same month last year but far below the 292 listings in July of 2019.
Sales, however, remain strong.
There were 236 homes sold in the region in July, down 13% from last year but ahead of the 227 sold in July 2019.
Vosburg said she’s seen a few problems with homes not appraising for enough to satisfy loan requirements, an issue driven by multiple bidders driving prices up beyond the asking price and value of the home.
And she’s noticed fatigue among buyers who repeatedly get outbid.
“Some buyers get tired of looking and making offers and they just decide to hold off for a while.
“It’s not fun to tell a buyer they didn’t get the house they wanted. But it’s fun to tell sellers they got five or six offers.”
Vosburg said the market is also complicated by the fact people selling aren’t sure they’ll be able to find a new home to move into.
“People are afraid of selling their house if they don’t know where they’re going.”
She said agents have been doing a lot of contingency agreements, in which a seller agrees to a buyer’s offer but won’t finalize the deal until the seller finds a new home.
She said the increase in contingency agreements led the state Realtors association to create a new contingency form for agents to use.
She said there is good activity in all price ranges. “Under $300,000 are selling a little faster, but I get offers on higher-end homes, too.”
Vosburg said area communities are also seeing a lot of activity. “I had six offers on a Waseca listing a month or so ago. I had four offers on a Janesville listing for $375,000. I’ve been going to New Ulm a lot, they’re selling well there, too.”
She said continued low interest rates — still at about 3% or under for a 30-year mortgage — bolsters the market even as prices rise.
The housing market was defined by three things during the first half of 2021 according to Minnesota Realtors: the lack of inventory, booming closed sales and rising prices.
The association said that despite low inventory the Mankato and south-central region produced closed sales in the double digits for January and April compared to the previous year, with some declines reported in May and June.
The market was vigorous locally with 18% more closed sales than January 2020. But at the same time, new listings were down 24% over last year. This rose slightly in February when 201 homes came on the market, and closed sales bumped up 4% over 2020.