Local real estate agents are calling it historic. Homes are getting swept off the market in record time, gathering multiple offers within hours of being listed. Listing prices are noticeably higher. Sellers are winning. Buyers are frustrated.
Throughout the last year, an inflation storm has been growing in the national housing market. In southern Minnesota, agents are feeling the pressure as they work harder than they ever have before to help their clients race to make an offer. Dar Vosburg, a Mankato real estate agent with Home Run Realtor, has seen her share of hot markets, but said supply and demand imbalance is greater than she’s ever seen in her 24 years.
“We’ve had markets similar to this but not quite this bad where it’s hard to get a house,” said Vosburg. “I usually have a lot of listings and up until a couple days ago, I’ve hardly had any people putting their houses on the market. I have a bunch coming out now, but I don’t know if things are going to change or it’s just me.”
Things began to peter out slowly, and while there is never a perfect balance between those house hunting and the amount of inventory on the market, according to Owatonna Realtor Diane Holland, it was “more normal” for a while. In April 2020, however, the shift began. Despite the COVID-19 pandemic, the Berkshire Hathaway agent said sales numbers remained on par with the year before, but less than a year later nothing looked the same.
“We have only 20 houses on the market in all prices ranges, and the home that was selling for barely $100,000 in 2008 is now being listed for $200,000,” Holland said, noting that three of the homes listed are currently pending offers.
According to statistics provided by the Realtor Association of Southern Minnesota new listings in southern Minnesota have fallen 26% since 2019, while housing prices have shot up. The association covers Rice, Waseca, LeSueur, Scott and Nicollet counties. Region-wide, the median sales price has risen by $33,000 in two years. With the market so competitive, homeowners are receiving an average 102% of their original list price.
The Southeast Minnesota Realtors, which includes Steele County, is reporting a 21% increase in median sales price since June 2019. The number of homes for sale in that region has nearly been cut in half: 567 in June 2021 and 1,068 in June 2020. The number of homes for sale in the region in June 2019 was even higher: 1,494.
With homes in short supply, buyers are in close competition and making high offers to outbid other prospective homeowners.
“I just submitted my fourth offer for a buyer that had been looking for several months. She’s gone over list price every single time,” said Le Sueur agent Amber Seaver with Keller Williams. “I did a run through St. Peter yesterday afternoon, just online, and everything in the past few months that I pulled up within the hottest price points between $150,000-200,000, everything sold at a price point listed above.”
While inventory is at an historic low, it’s difficult to know how many buyers are on the market. Seaver said she typically receives two to six offers before a property is sold, which can happen in as little as a week. Despite rising housing costs, Seaver said many buyers are coming into the market to take advantage of low interest rates.
“Sellers are doing great, but so are the buyers,” she said. “I have a lot of people coming to me and saying, ‘I have to buy a house; it’s free money.’ They can get 2.5% on interest and they want to buy before those interest rates go up. Then the sellers are saying ‘My interest rate is much lower that I can afford to move up and have my dream home now for the same mortgage rate I was paying before.’”
But the high competition between buyers can hurt more than just their pocketbooks. Homes sell at such as fast pace, that many buyers don’t have the luxury of waiting to do home inspections or negotiate a better deal.
“Some of them want a house so bad they don’t care what they pay, but its hard because they don’t get to negotiate,” said Vosburg. “Most of the time the highest offers have to get there by a certain date and you don’t know if every offer is lower than yours. In the past, you’ve been able to write an offer and negotiate. Now there isn’t a lot of negotiating.”
Because there is such high competition, Holland said it feels crucial that buyers move fast when they find a home they love and want. With the state of the market today, she said realtors wear a lot of different hats to try to help their clients continue moving forward in the process of finding and buying a home.
“We like to say the right home will come along, and it will,” Holland said. “It’s just not always in the timeline that we want.”
If one doesn’t need to buy a home, Vosburg’s advice was to wait for the market to change.
“Some people I would tell them to wait, because the market will change if they’re not in a hurry,” said Vosburg. “Otherwise, if they want to take advantage of the low interest rate, offer as high as you’re willing to go, so that you’re OK with it if someone else paid more. But there are some buyers who should wait.”
Seaver recommended that buyers hire an agent to get their offer in the door fast.
“Work with a professional because they’re not paying us the seller is, so it’s to their advantage to have someone that can get them into that house immediately,” said Seaver. “They want to work with an agent that is full-time, that as soon as a house goes to the market, they can get them in that house.”
As far as when the inflation bubble will pop, Holland said there is no way to know, just like how it was impossible to know when the market would recover from the 2008 crash.
“I wish we had that crystal ball, but we don’t,” Holland said. “We don’t know what will happen in the next year, and there is always a change that this market will keep going up.”
The Waseca school district isn’t waiting on any new information to cement its COVID-19 plan for the fall, Superintendent Eric Hudspith reported to the School Board Thursday.
“Some of the American Pediatrics Association and CDC (Centers for Disease Control and Prevention) conversations that have happened in the media — that’s a national conversation,” Hudspith said.
The number of new coronavirus cases in Waseca, he said, does not require the level of restriction being proposed by other jurisdictions around the country. That includes universal mask wearing, social distancing and more.
Hudspith said that he felt it was necessary to remind families that its COVID-19 plan is not responding to any new information at the moment, since he had been asked by numerous members of the community in the preceding days when the district will decide on its COVID-19 plan.
“If something changes locally, if we have a significant outbreak in our community, we’ll have to make an appropriate decision, obviously,” he said.
In recent days, COVID-19 case counts in the United States have more than quadrupled from where they were only a month ago, with cases rising in nearly 90% of U.S. jurisdictions while the highly contagious Delta variant becomes the dominant strain in the country. This has been accompanied by an unexpectedly high incidence of “breakthrough” infections — fully vaccinated individuals testing positive for and developing symptoms of COVID-19 — though hospitalizations and deaths are still almost exclusively occurring among unvaccinated individuals.
Since the Minnesota Department of Education is not requiring it, Hudspith said, the Waseca school district is moving forward with its COVID-19 plan as it was developed earlier this year.
That plan, which is available on the district’s website, includes recommending (though not requiring nor enforcing) masks for unvaccinated individuals, contact tracing for outbreaks, enhanced indoor ventilation and requiring communication from families about positive COVID-19 cases. School buses will also require universal masking, as mandated by the CDC.
Beyond that, school will resume full-time this fall with a regular calendar and activities.
Hudspith concluded his remarks by sharing his three goals for the school year, which include measuring and improving student achievement, increasing community engagement, and making sure that actions taken by members of the School Board to achieve goals are more explicitly linked to measurable outcomes and less “la carte” going forward.
Waseca County will spend up to half a million dollars to remodel the courthouse, creating a larger work space for the administrator and elections staff, and a bigger meeting room on the lower level.
The board struggled to agreed with how to proceed during its July 20 meeting, concerned about modifying the courthouse, built in the 1890s and listed on the National Register of Historic Places and costs to complete the work.
The work, according to county documents, will move interior walls, an old vault and fireplaces to improve operations for the county administrator, Human Resources, and the Auditor/Treasurer and Recorder departments.
"I'm still feeling the sting from Public Health," said Commissioner Brian Harguth, referring to the purchase and renovations of the old Waseca Mutual building on Elm Avenue that now contains offices for county Public Health and MnPrairie staff.
But it wasn't just money the board discussed. County Administrator Michael Johnson reassured commissioners that the courthouse's listing on the National Register won't be impacted by any work done.
"There nothing at all from a legal standpoint that would prevent you from demolishing the courthouse tomorrow," he said, while noting that it would likely be a poor move politically.
The board first considered approving Olson + Hobbie Architects with a budget not to exceed $750,000, but that motion died for lack of a second. It did approve Olson + Hobbie to design the renovated spaces and serve as construction administrator, but then considered a not to exceed $750,000 budget as a separate item. That, too, died for lack of a second.
Commissioner Blair Nelson's motion to approve renovations not to exceed $500,000 passed unanimously, but the constraints imposed concerned Board Chair De Malterer.
"There's a fine line between being very responsible with your money and getting a sub par product," she said, worried that being too focused on the bottom line might not be worthwhile in the long-term.
Harguth agreed with Malterer, but felt it was important to go with a lower price tag, knowing that the architects could come before the board to ask for additional funding if they felt it was worthwhile. That would allow the board to decide whether there is value in the additional expenditure.
"I think the number you gave us is probably spot on, but I think this is our responsibility as a board," he said.
With a $196,000 grant from the state, the Waseca Parks Department is well on its way to making Clear Lake Park what Parks Superintendent Brad Dushaw calls a “destination park.”
The funding, from the Minnesota Department of Natural Resources, will pay for a complete playground replacement and installation of an accessible fishing pier.
“When we got the letter everybody was elated,” said Tom Hindt, Parks Board chair of the June 30 notice. “The playground equipment at the park needs to be replaced.”
The Parks Department has been looking to replace this playground for years, Dushaw said, given that the park is almost 30 years old, and playground equipment typically has a 25-30 year lifespan. At Clear Lake Park, the effect of the playground’s age can be seen in the deterioration of the equipment’s rubber coating, through which metal is exposed in several areas.
“Exposed metal can cut a kid’s shin,” Dushaw said, describing worn stairs or handles that children might fall into.
Dushaw explained that the city does regular playground inspections, which have raised concern and led to repairs. Repairs must be carried out immediately when safety concerns are discovered.
“We’ve had some slides that have broken over the years that we’ve had to replace as well, and you get to a point where you just continue to replace things and (the cost) adds up,” Dushaw added.
The DNR’s annual grants, Dushaw explained, are very competitive — Clear Lake Park’s selection for the funding was not assured from the outset.
“Every municipality in the state is applying for these,” he said. “It’s an opportunity to get projects like this completed that might be delayed if they’re not covered by grants.”
The DNR grant is a 50-50 cost share, meaning that the city of Waseca will also contribute $196,000 to the project.
In addition to improving public safety in Waseca, the Parks Board emphasized its goals regarding inclusivity for both the new playground, which will be ADA-accessible — meaning it can be accessed and used by people with disabilities — and for the new fishing pier on Clear Lake, which will have an accessible shoreline fishing option.
Inclusivity is something the Park Board thinks a lot about with its programs and facilities, Dushaw said — making sure that people of all abilities are able to use and enjoy them.
Clear Lake Park has the amenities and the location — right on the lake — that give it the potential to be a top-end park in the region, he said.
“We look at Northeast (Park) and how much it’s used and how much newer it is than other playgrounds,” he said, explaining that the board put two and two together and realized that the community might take fuller advantage of Clear Lake Park if it were as new as Northeast Park.
While he doesn’t have a completion date set, Dushaw hopes to start installation in summer 2022 and have it ready for use by fall 2022.