Elwood and Zola Thompson are moving some of their last possessions out of the St. Louis Park home they've lived in for the past 35 years. They've been planning for a few years to retire to the family farm in northern Minnesota.
After years of a housing boom in Minnesota, Zola Thompson wasn't expecting a soft real estate market when it came time for her to sell.
"I kept seeing this thing going lower and lower, and I really would like to get as much as we can out of it because we're going to be living on some of this in our old age, and I just wanted to get as much as we could," says Zola Thompson.
In hopes of drumming up interest in their house, not to mention getting the best possible price, the Thompson's decided to hold an auction. The starting bid will be $1. They don't know how much it will sell for, but they know when the offers will start -- 6:00 p.m. Thursday, May 31.
Few sellers have that kind of certainty. In the current market, houses are not moving very quickly.
The latest numbers show it would take about eight and a half months to sell the existing stock of homes on the market in the 13-county metro area. Three years ago, that "housing supply number" stood at less than four months.
"Our economists in our associations are looking at a market that's going to be relatively flat for about two years, three years, " says Edina Realty's Gregg Roeglin, who is a past president of the Minneapolis Area Association of Realtors.
Roeglin says several statistics indicate the current soft market is not likely to improve anytime soon.
For example, for the week ending May 12, the number of sellers with offers was down more than 20 percent from the same period last year, while the total number of homes on the market was up nearly 12 percent from a year ago.
Roeglin says the market is overflowing with opportunities for househunters, and they can afford to be picky.
"Buyers today are not going to go through a house, or three homes, like they were before and get all excited and think, 'We better buy this before somebody else does,'" says Roeglin. "They're out there comparison shopping. Instead of looking at three houses they're looking at 23 or 33 houses. And what's actually quite educational for a lot of sellers is to go out and look at the competition and what they're up against."
The big question for buyers and sellers is how long will the market be flat?
Glen Dorfman of the Minnesota Association of Realtors recommends that sellers accept the market for what it is, and not hold out for a recovery.
“The feeding frenzy that we were in from '98 to about 2006 is going to be hard to repeat.”Tom Musil, University of St. Thomas
"Right now we're in a frightening time of flat and declining market values, so why not cut losses?" says Dorfman.
Dorfman says market conditions are more likely to get worse than better if, as expected, the rate of foreclosures continues to climb. That would dump even more homes on an already saturated market, pushing prices down further.
"I've been saying to everybody who will listen, if you have your house on the market and your realtor tells you to update the living room carpeting, or stage it more exacting than you might otherwise, then you should do that," says Dorfman. "And if you need to reduce the price today $10,000 to $20,000, it's far better to reduce it 10 or 20 than in six months having to reduce it 70 [thousand] or 80 [thousand]."
Others are less pessimistic about real estate prices. Tom Musil, head of the real estate program at the University of St. Thomas, predicts the market won't stabilize until late next year. But even then, he cautions not to expect a return to boom times.
"You have to realize the feeding frenzy that we were in from '98 to about 2006 is going to be hard to repeat," says Musil. "We saw tremendous increases in values and in a short period -- maybe eight or seven-year period -- and when you see houses increase 250 or 300 percent, that's pretty tough to match."
Musil, along with the other real estate industry experts, also says that, while statistics show a struggling market overall, the conditions vary from neighborhood to neighborhood.
As for the Thompsons, they have no idea how much money their auction will bring them. They do know their unconventional approach has lured in streams of potential buyers, at a time when many more traditional home sellers are having problems getting people to come to their open houses.
"All I want to do is get a fair price," says Elwood Thomson. "We bought this house 35 years ago and I paid $38,000 for it. So if I get $40,00, I made money. Right?"