Duluth real estate agent explains current seller's market boom

Updated: April 12, 2021 09:41 PM
Created: April 12, 2021 08:24 PM

Real estate agents are saying that, right now in the Northland, it is a seller's market.

"Just a lot of people want to be in this area and there's not enough houses for them,” explained Andrew Frielund, an agent with RE/MAX Results. "We can't build our way out of it.  Construction costs are so high right now, so it’s really causing this supply and demand economic issue."

As a result, he explains, the limited amount of homes currently on the market have been selling for a lot and selling quickly. Frielund said he’s heard of a home selling for more $100,000 dollars its listing price.

“The sellers, this is great for them.  They're getting way more money than they thought and their houses are selling really fast.  Of course, in turn it’s exceptionally frustrating to be a buyer making offers on multiple properties and running around like a chicken and not getting anything."

Frielund says buyers are doing things he’s never seen them do before just to remain competitive in their offers.

"Buyers are doing crazy things.  They're skipping their inspections.  They're putting $10,000 in non-refundable earnest money.  They're guaranteeing that if the house doesn't appraise, they'll make up the difference in cash. [These are] things I've never seen before in 30 years of selling real estate here in Duluth"

He also explained that many people from outside the Northland are looking at homes here after the pandemic has made remote work much more common.

"When I've had some rural listings, I've had buyers coming from around the country. I think the change in work habits, where they don't have to be in an office anymore, [makes it] so they can suddenly be in a lake home in Wisconsin."

As far how long this boom will last, Frielund says he isn’t sure.

"It almost feels like it’s a balloon getting more in it every day and its crazy. Tt feels like it could pop, but I mean there are so many buyers that want homes, it’s really tough for me to predict," he explained.  "I'm truly baffled by the situation myself.”

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