Star Tribune
Are Duluthians getting priced out of the local housing market?
DULUTH — A few years ago, Amber Johnson would have been an ideal Duluth home buyer candidate: She could make a 25% down payment and offer above asking for a home in her price range.
But after 10 rejected offers this year, even including money for an appraisal gap, the St. Luke’s physician assistant quit trying.
“The listing price felt like a suggestion,” Johnson said. “I’d go in with what felt like a strong offer and someone would come swooping in with a cash offer. I had no ability to compete with that.”
Johnson is among many in Duluth struggling to buy a first home or upgrade to a better one in the kind of bargain-less market that some real estate agents say they’ve never seen in the Twin Ports. Even as mortgage interest rates jump to the highest level in two decades, most homes continue to sell quickly and at the list price or more in certain ranges.
In a city with a limited supply of single-family homes, local residents compete with investors, Twin Cities buyers who discovered during the pandemic they can work from anywhere and employees in growing industries like health care. They also compete with West Coast residents escaping the perils of wildfires and water shortages to live by the world’s largest freshwater lake. Duluth frequently is cited as a climate haven, a refuge as people flee the effects of global warming, coming for its outdoorsy, rugged beauty and relative lack of catastrophic weather and natural disasters.
And many of these buyers come with cash.
Between September 2021 and August, cash sales made up more than 20% of home purchases in the Duluth area, compared with 14.7% the summer before the start of the pandemic. According to the National Association of Realtors, Duluth ranked eighth in the nation for its annual increase of cash home sales in the first quarter of 2022.
In this market, some sellers won’t accept a financed offer, said Jenna Galegher, past-president of the Lake Superior Area Realtors (LSAR).
Although the association doesn’t track where buyers originate, “site unseen” offers, many from cash buyers, have been abundant in Duluth, she said.
But they’re not all from out-of-towners. Some first-time buyers are borrowing money from older relatives, who turn home equity into cash, said Karen Pagel Guerndt, president of LSAR.
“Once they have the property they refinance it and pay off mom and dad,” she said.
More expensive, no contingencies
Homes in Duluth are also selling for more money. The average sale price of a Duluth home has jumped 45% to $300,674 in the past five years. It’s an increase similar to the Twin Cities, where the average price in September was $365,000, up 47.8% from five years ago.
And back then, homes sold in Duluth for about $3,000 less than list price. Now they sell for $9,000 more than the asking price, or about 3%.
The higher end of the market was more intense last spring, said Brok Hansmeyer, a Duluth real estate agent. He recalled two $500,000-range Island Lake homes both selling for $111,000 over asking. The city’s lower-end market is now where buyers compete the most — the $100,000 to $300,000 range.
“People are living paycheck to paycheck,” Hansmeyer said. “If you need a seller to pay closing costs, it’s almost impossible.”
This week, only 15 single-family homes in Duluth were listed for under $200,000.
That’s the market with the most demand as higher interest rates force buyers to spend less. Many were shut out in the past couple of years and are still trying to buy, but they can’t afford to forgo an inspection or pay thousands over the listed price.
Local buyers who need to sell a house also struggle, said Deanna Bennett, a real estate agent with Messina and Associates.
“You can’t be contingent,” she said. “You have to sell your house first, move in with family or find something to rent. That’s where locals hurt the most.”
Taylor Bjork got 23 offers on his Duluth Heights home listed at $169,900 last spring. It sold for $35,000 more and he was ecstatic, thinking his family of four would be able to buy its “forever home” with nearly $100,000 to put down.
“The timing couldn’t have been worse,” he said. “To give up a surefire security blanket — a roof for your kids — without a backup, was really stressful.”
They arranged a short-term rent-back option with the new owners of their home and also lived with family before finding something in late summer that was suitable, ultimately paying $100,000 more than planned.
City leaders are working to increase housing stock on multiple fronts, including the creation of a Housing Trust Fund and the allocation of millions in American Rescue Plan Act money for affordable housing. Several apartment buildings across Duluth are planned or under construction, but the city lacks space for new single-family homes and condos.
One-level living for folks at retirement age and spec homes are in the highest demand, Bennett said.
‘They think it’s a bargain’
Even as winter approaches, real estate agents expect the market to remain competitive. They also expect more buyers from the West Coast and Colorado, choosing the region for its climate change resilience.
California desert resident and Wisconsin native Jeremy Christensen is one of those hopeful climate buyers, planning to finance a home in Duluth next summer.
“Compared to California, the market is insanely cheap,” he said, for much nicer homes for the price. “But I know I am not alone in thinking about (the area as a climate haven). I have friends who know nothing about the Midwest who are looking for climate-safe properties along the Great Lakes.”
Duluth real estate agent Casey Carbert said she she gets weekly calls from people living outside the area.
“They think it’s a bargain — we have had multiple offers for properties on Lake Superior,” Carbert said. “One million dollars to live on the lake? It’s a good deal if you’re from California.”
Not all of the interviews were negative; a fair amount of players and parents reported positive experiences with Randolph, some saying they never witnessed him belittling players.
“To me, he was fabulous,” one parent said, noting their child “blossomed” under Randolph.
Terch wrote he was not able to substantiate an allegation that Randolph received payments from the East End Hockey Boosters, although he did find “unusual financial management practices” by the booster club, including a misrepresentation to parents about the use of at least some of what they paid, a commingling of funds between events and “unorthodox” accounting practices. Several parents said they felt they had overpaid many times without explanation. The Minnesota Bureau of Criminal Apprehension began investigating the former East hockey booster club in 2023 for alleged embezzlement. The status of that case is unknown.
In response to the report’s release, Duluth Public Schools Superintendent John Magas said in a statement that he can’t discuss personnel matters, but the district takes all reports from students and families “very seriously.”
“Our primary goal is to ensure that students have the best possible experiences, both in the classroom and in extracurricular activities,” he said. “We are committed to thoroughly investigating any concerns brought to our attention and taking appropriate action” to maintain safe and positive learning environments.
St. Thomas Academy didn’t immediately respond to a request for comment.
Gas prices would increase by as much as 75 cents per gallon in the Midwest, where most refined products come from Canada, according to Patrick De Haan, an analyst at GasBuddy. Overall, the Peterson Institute for International Economics said Trump’s tariffs would cost the typical household $2,600 per year; the Yale Budget Lab said in an estimate released Wednesday that the annual cost could be as high as $7,600 for a typical household. As a share of their income, the poorest Americans would pay 6 percent more with 20 percent tariffs, compared with 1.4 percent more for the richest 1 percent, according to the Institute on Taxation and Economic Policy, a left-leaning think tank.
“We’re not talking about caviar — these are things that people have to buy. They’re essentials,” said Neil Saunders, a managing director at the analytics company GlobalData.
Economists say it would take several painful years for alternative domestic producers to emerge for many goods. For instance, almost all shoes and 90 percent of tomatoes sold in the country are imported, according to the Peterson Institute. And the United States does not even have the climate necessary to produce many food items – such as coffee, bananas, avocados, to say nothing of Chilean sea bass – at the necessary scale to meet domestic demand, said Joseph Politano, an economic analyst who has written on the subject on his Substack.
Trump’s tariffs would also reverberate through Wall Street and global markets, inviting turmoil that would affect investors and companies worldwide. Those effects would probably be felt quickly.
During Trump’s first term, stocks fell on nine of 11 days in 2018 and 2019 that the United States or China announced new tariffs, according to a study this year by economists with the Federal Reserve and Columbia University. Comprehensive tariffs would cause a swift one-time jump in prices before reducing economic growth about six months later, according to economist David Page, head of macro research for AXA Investment Managers in London.
Many analysts are hopeful that a stock market panic would dissuade or prevent Trump from carrying out his plans. The investment bank UBS projected that a 10 percent universal tariff could lead to a 10 percent contraction in the stock market. U.S. multinationals are heavily dependent on foreign subsidiaries, and retailers, auto manufacturers and other industrial sectors would be hit the hardest, according to UBS. Chris McNally, an analyst at Evercore, said Trump’s 10 percent tariff plan could cause a more than 20 percent decline in General Motors’ earnings, with slightly smaller declines for Ford and Stellantis.
Star Tribune
On the Wisconsin-Iowa border, the Mississippi River is eroding sacred Indigenous mounds
Bear and other members of her tribe are serving as consultants on the project, as is William Quackenbush, the tribal historic preservation officer for the Ho-Chunk Nation in Wisconsin, and his tribe. They also lead teams of volunteers to help care for the mounds, which includes removing invasive European plants and replacing them with native plants that reduce soil erosion.
Some are skeptical of this manmade solution to a manmade problem. There are some tribal partners who’ve expressed that the river should be allowed to keep flowing as it wants to, Oberreuter said. Snow also acknowledged that people have been hesitant about making such a change to the natural bank.
But, she pointed out, “The bank is (already) no longer what it was.”
When the berm is complete, Snow said, there’ll be a trail atop it that visitors can walk. That may help protect the mounds better than the current way to see them, which is to walk among them, she said.
The Sny Magill Unit has been part of Effigy Mounds National Monument since 1962, Snow said, but it’s not advertised like the rest of the park. That’s in part because there are no staff stationed there to properly guide people through the mounds. But if people visit respectfully, she believes it’s one of the best places to take in the mounds because it’s on a flat, walkable surface, unlike the rest of the park, which is on a blufftop.
Chilling drawings in notebook of alleged Georgia school shooter revealed in court hearing for father Colin Gray
Former Duluth East hockey coach Mike Randolph violated employee conduct policies
Georgia prosecutor asks appeals court to reinstate 6 tossed charges in Trump case
Chilling drawings in notebook of alleged Georgia school shooter revealed in court hearing for father Colin Gray
Former Duluth East hockey coach Mike Randolph violated employee conduct policies
GIPHY App Key not set. Please check settings