The Top Five Questions from Home Buyers & Sellers, Answered

BRIX Real Estate's own Kirk Duckwall is here to answer the real estate questions that everyone cares about.

Where does the market truly stand?

Is it true that the number of homes sold is down by 30% over last year?

Yes. However, what many news outlets fail to mention is that home sales jumped drastically in the second half of 2020 and stayed relatively strong through May 2022. This was because of the demand for single family homes during COVID and historically low interest rates.

As I am writing this mid-December, the number of buyers is tracking with 2015 buyers. So, what was the market then? In 2015, it was a 2.5 on the BRIX Market Meter (brixtwincities.com). Today, we are at a 3.75. Both of these fall within the standard Buyer’s Market range — normal for this time of year.

We also see inventory dropping and prices flattening, both hitting their seasonal bottom. Again, normal trends for this time of year.

If rates stay similar to where they are now, we should see a “spring market” — February through April — perform much closer to historical averages. This would mean we'd swing back to a Seller’s Market during that time frame, at a minimum.

How long will it take for my home to sell?

Again, this is a story of normalization. The era of getting a bundle of offers for your house in a day or two is in the past. In April 2022, the median time on market was 7 days; as of December 2022, we're seeing closer to 30.

But April 2022 was the anomaly. Over the last decade, the average in April has been closer to 20 days. The average days on market in December is in the low 30s. However, with a solid pricing and marketing strategy, days on market can be usually be cut by about half, though different property types and locations vary in their flexibility. Prior to listing, have your agent check the current market for your property.

What should I do to get my home ready?

The good news is, in most cases, you do not need to remodel the kitchen or replace the deck. The main things are general cleanliness and decluttering followed by good flooring and paint. How do you know if you have good flooring and paint? If you look at a stain, crack, wear mark or smudge on the floors or walls and wonder: will a buyer notice or care about this?

The answer is yes, they will. Replacing flooring or painting has one of the highest returns on investment — around 300%. There may be other items you may want to address but I would recommend consulting your agent prior to just moving forward on any projects. I know I have probably saved clients tens of thousands of dollars by not moving forward on unnecessary projects.

Too often a seller will think ‘what would I like?’ instead of the correct question: ‘what would it take to sell with the best return?’

Will interest rates come back down?

From 6.5 or 7%? Most likely yes. Will they come back down to 3 or 3.5 % anytime soon? Most likely no. In the last 20 years, rates have been much closer to 5% than 3%.

Does buying down an interest rate make sense?

It depends. How long are you going to be in the home? Are you planning on refinancing? What is the rate at today and is it affordable?

If you are only going to be in the house for a few years, the answer is most likely no. If you're planning on refinancing within a couple of years, the answer is again most likely no. If your monthly payment is affordable for you, it could likely be no. All of that said, if it was me and rates were at 6% and I was going to be in the home for 5 or more years, I would likely buy the rate down closer to 5%. If an opportunity came up to buy a home that I wanted in my price range, I would figure out how to deal with the rate.

When I buy, how do I avoid overpaying?

Don’t worry about what other buyers are doing. Plan out what you are going to do. These are the questions you will want to answer. Answering these and planning your offer strategy off of these insights can help you avoid overpaying.

If you can find a home that is significantly underpriced even if there's multiple offers, or it's poorly marketed, or it's overpriced but has a longer than normal time on market, it is very likely you have an opportunity to not only avoid overpaying but to get a house at a really good value.

Where is the Market Meter at? Check brixtwincities.com — is it at a 3.5 (Buyer’s Market) or a 8.2 (extreme Seller’s Market)? What does a full comparative analysis show for a value range? How long has the house been on the market? 1 day or 30?