After a grueling journey that would break their realtor’s record for showings, Jake Woodbridge and Allie Penson finally found a home.
They were living in the Schmidt Artist Lofts in St. Paul when the bells of matrimony called. With nuptials scheduled for July, it was time to get a place of their own.
They were something of a realtor’s dream, malleable enough to look anywhere from Blaine to Bloomington. But they were also searching in the $190,000-$260,000 range, the most competitive in the Twin Cities. A test of endurance awaited.
Seventy-six homes would see their tracks. “If something popped up on the market, we would literally have to go look at it in 24 hours or it would be sold,” says Jake. Eleven purchase agreements would be written. “If we saw a house we liked, we would literally have to do it that day.”
They would lose them all.
Competition meant bidding above the asking price, sometimes by as much as $15,000, twinned with an offer to pay closing costs. At one south Minneapolis home, their purchase agreement was buried by 50 other bidders.
Owners knew they didn’t have to fix much before placing their houses for sale. The money would find them anyway. And it was useless to make a buy contingent upon inspection. The next guy was sure to forego further scrutiny if a deal could be done today.
In the end, they found a small, ’50s-era home in Richfield that required $5,000 over the asking price. It may not be an architectural gem, but it’s a fine place to start a life. Jake, a filmmaker who specializes in commercials and music videos, works mostly in Minneapolis. Allie, a scientist, works in St. Paul. Both are looking at a mere 10-minute commute.
Welcome to the Twin Cites real estate market, ranked by Realtor.com as the fourth worst in America for millennials.
The problem is one of basic capitalism. After a three-decade standstill, wages are finally beginning to tick up as unemployment ticks down. That means more people can afford a home. Yet this is not the real estate world of yore, and millennial tastes exacerbate the woes.
The half-century path of marriage, children, and a move to increasingly distant suburbs has grown entangled with weeds. Young people are marrying later and waiting longer to breed, carrying a deadening fondness for the farmland subdivisions of their parents’ generation. The good life to them means the city, not 45-minute commutes and dining at an Olive Garden on the service road by the freeway.
That’s causing a glut of buyers in the cites that’s radiating outward, especially in the most affordable price ranges. It’s compounded by empty-nesters feeling the same urge, with superior purses to win bidding wars. All of which is causing fewer people to sell their homes, lest they risk facing the same daunting hunt themselves in finding a new one. It’s simply a case of too many combatants wrestling over a scarcity of inventory.
Not surprisingly, realtor.com’s worst markets for millennials are San Jose and Seattle, both jammed with high-paid tech workers. But the housing crunch then spreads to Flyover Country, with Salt Lake City finishing third and Omaha, of all places, landing fifth. All three cities are finding their own brand of prosperity, while still offering relatively affordable home prices, making them at least theoretically attainable to first-time buyers.
Jake Woodbridge offers cautious advice to those brave enough to enter the fray.
“I guess you just have to have fun with it and don’t let it stress you out,” he says of the trial by paperwork. “It’s supposed to be fun, but holy crap, I’m glad I’m done.”