Housing the Long Way Home 2.25.22

On Super Bowl weekend we made a trek to Duluth (I hadn’t been west of Lutsen since October of 2020, so this was a big deal). Our daughter Jess and her kids were traveling from Las Vegas for several days in The Zenith City to do a campus tour and try to find a house. We wanted to spend a little time visiting them.

Last summer, Jess and the kids visited us for the first time since we’d moved back to the shore. It had been more than 20 years since she’d lived here, and the kids were here but once for a two-week visit several years ago. After a week-long stay, while driving back to MSP for the flight to Las Vegas, the three of them decided that they could live up here. Not in Cook County, but Duluth for sure. Husband Matt, who has never been up here, was easily convinced to move. 

Grandson Connor and his girlfriend are beginning college at UMD in the fall. Jess is interviewing for jobs (in health care.) Granddaughter Chloe has decided on the Duluth high school she wants to attend for her senior year. They sold their Las Vegas house last fall and have been renting until they can make the move to Minnesota this summer. 

But now, the real estate market here is messing with their well-being. 

First, it’s very hard to buy a house anywhere from 1,800 miles away, anytime. You have to rely on a real estate agent (and they have a good one) and online video tours. But this was a given.

Then, add in this crazy market. Jess and Matt have made offers on four houses that seemed to meet their needs in the Duluth area. Near enough to campus. Big enough for five people and three dogs. Something within their price range. They made three of these offers long-distance and the fourth on this recent trip. And they lost out on all four. 

The house they saw the Saturday of Super Bowl weekend had six showings scheduled the first day. By Monday, six offers were presented. Jess had offered a premium that was almost 10% over the asking price, along with flexible closing dates and NO home inspection contingencies. And they lost the house anyway.

That’s been the story throughout this process. One offer lost to a lesser all-cash offer. Another lost to a lesser offer that did not require a home inspection for a 65-year-old log home. This is a great time to sell a house if you don’t need to buy another one. It reminds me of the real estate insanity in Nevada during the early 2000s. And like that, I expect a crash to come that will drop home values to a more reasonable level (or further) and leave lots of today’s buyers at or near the financial underwater point.

I looked at Realtor.com to see what properties are available in Cook County. As of today, there are but 10 single-family homes listed ranging in price from $169,000 to $949,900 (average price is $461,050). Of the ten, five have pending sales, one is under a contingent contract, and just four are “available.”

Housing problem?? Seems like it is everywhere. In the meantime, the historically low home loan interest rates are on the rise. 

By Steve Fernlund

Published 2/25/2022   Northshore Journal