Cash back, new appliances: Sellers sweeten Twin Cities home deals

Twin Cities home sellers are learning a painful truth about today’s housing market: A price cut isn’t always enough anymore to lure buyers.

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To close deals, some sellers are now covering buyers’ closing costs, paying their homeowners association fees and even buying down their mortgage rates — concessions agents say they haven’t seen since the Great Recession.

These sweeteners cost sellers thousands of dollars, making it harder for them invest in their next home, pay off debt or build a savings cushion. With higher mortgage rates eroding buying power, pending sales in the metro have dropped sharply in recent weeks, and showings statewide are down nearly 17% so far this month from a year ago, according to Minnesota Realtors.

“Everyone is saying, ’We’re going back to the buyer’s market,’” said Janice Robinson, a Twin Cities sales agent. “We’re not going back, we’re already there.”

At the same time, listings are outpacing the pool of buyers, making it especially difficult for sellers to attract offers.

It’s not just the Twin Cities experiencing this market shift. On Thursday, the National Association of Realtors said existing-home sales fell to a 16-year low, declining nearly 9% compared with last year.

Expanded image view

Shown is the lower level of James Kujawa's three-bedroom, two-bathroom home in Brooklyn Park. He's a few dozen showings but no offers since he listed it at $395,500 in August, which is an example of how the market has shifted.

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• Anthony Souffle/The Minnesota Star Tribune)
• New normal: price reductions, concessions

Sellers offered concessions to nearly 45% of all buyers in August, the highest figure for that month in over six years, according to Redfin, the online brokerage.

And 16% of all sales included both a price reduction and a seller concession, a record for any August.