“Mega Multiples” and “Super Neighborhoods”: What’s Different About Multiple Offers in Today’s Housing Market

Then & Now, Compare & Contrast

Pervasive multiple offers were a staple of the 2005-2006 housing market, too.

But back then, at least in my experience, once the listing agent had received 4-5 offers, other prospective Buyers tended to bow out rather than contribute to the feeding frenzy.

Today, that no longer seems to be the case.

Anecdotally, there now appears to be an outbreak of multiple offers in the Twin Cities where the Seller receives 15, 20, or even 30+ offers.

What the $%#@&! is going on?

“Multiple Offer Runners-Up’s”

I’ve got a couple guesses, but most likely it’s a blend of the following:

—Technology:  Electronic signatures were still very much over the horizon a decade ago.  Today, they’re pervasive.

Assuming the Buyer is a couple, one person can be in LA, another in Boston, and their agent can be in Miami Beach (ahh, nice thought) and they can collaboratively put together an offer in an hour — less if they’ve just gone through the process (see next).

–Virtuous (Vicious?) Cycle.  All those multiple offers are breeding hundreds of multiple offer runners-up’s.  It gets old, fast, bidding on homes and coming up empty.

So, Buyers who’ve lost out previously tend to get more aggressive the next time.

—Hot (“Super”) Neighborhoods.  While the Twin Cities housing market overall is characterized by a shortage of inventory now, the squeeze is particularly acute in a handful of high-demand, closer-in neighborhood that appeal to first-time home buyers.

Those spots include St. Louis Park’s Birchwood neighborhood (west of 100), Bryn Mawr in Minneapolis (just west of Downtown Minneapolis), and the neighborhoods straddling the River (Seward and Longfellow in Minneapolis, Mac-Groveland and Highland Park in St. Paul).

Linden Hills and Fulton in Minneapolis, Edina’s Morningside neighborhood, and Fern Hill in St. Louis Park, used to be on that list, but they’ve appreciated so much that’s arguably no longer true (unless you’re a first-time Buyer with a $500k budget).

—Newbie agents.  This is pure conjecture, but I’m guessing that when a veteran Buyer’s agent calls the listing agent and hears that there are 27 offers already in, they relay that info to their client, coupled with a “You SURE you want to do this?!?” followed by, “Exactly how much over asking were you planning to go?”

A newer agent says nothing (maybe they need the practice writing offers).

Listing Agent (Administrative) Headaches

Regardless of the explanation(s), the rise of “Mega Multiples” — and all those spurned Buyers — raises the bar for the listing agent coordinating everything.

So, listing agents must take care to present every offer, no matter how non-competitive, to the Seller (which means carefully scrutinizing all those offers); communicate well with all interested parties over what can be a very intense 2-3 days (and typically, nights); then, after the fact, retain copies of all offering documents from all parties, to keep the Minnesota Department of Commerce happy (fortunately, electronic copies suffice).

If all this sounds like a lot . . . it’s because it is.

If you see any shell-shocked Twin Cities Realtors wandering around at the moment, that’s probably why . . .

See also, “Runner-up Home Buyer Lament:  ‘But, I Would’ve Gone Higher!‘”; “Prospective Home Buyer:  ‘The House I Want is in Multiples; What Should I Offer?’”; “Once Bitten, Twice Shy? Not in the Housing Market“; and “The Consequences of ‘Highest & Best’ in Multiple Offers, or, Would Coulda Shoulda.”

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