A Look at the Competitive Twin Cities Real Estate Market

A Look at the Competitive Twin Cities Real Estate Market

How Home Prices Have Gone Up in MinneapolisWhen it comes to selling a home in the Twin Cities, now might be the time to jump on the real estate market. 2017 has seen an explosion in selling prices for Minnesota homes from people looking to move into the area with their families. Because of this, Minneapolis has become a profitable area to sell a home in Minnesota.

Home Prices Higher Than Previous Years

Up from 2016, 2017 real estate properties in Minneapolis saw an increase in price at a median of 9.6 percent. This is higher than the national median home price gain of 6.9 percent and the state average of 5.8 percent. There have been several reasons why home prices in Minneapolis have increased higher than the inflation rate.

Low Housing Inventory

While home inventory hasn't dried up in Minneapolis, buyers are burning through listed homes faster than ever. During May, 8,744 new listings went on the market—around the same as in the previous year—but buyers are closing on them quickly, resulting in a 17 percent decrease of home listings on the market compared to previous years. Home buyers are offering higher prices in hopes of getting the homes they want and putting an end to the drawn-out house-hunting process. Pending sales have surged in Minnesota, especially in the new home market, as these developments are offering everything that homeowners are looking for in a great location and preferred amenities. As long as sellers and builders continue to place available homes on the listings at a steady rate, the housing market for the region is expected to remain healthy.

This aspect can have an interesting effect on buyers and sellers. If the inventory continues to become tight, prices could spike dramatically as sellers take advantage of low inventory to significantly increase the price of their homes. Buyers may find themselves in bidding wars for certain desired properties and have few choices in finding other homes.

High Cost of Rental Properties

Rental properties are increasingly costly in the Minneapolis area. Combined with lower-than-expected interest rates, more homeowners are interested in newly constructed or existing homes to purchase outright. When it comes to renting a home or paying a mortgage that equals the amount they would pay to rent, more people are opting to take the home purchase route. This surge of home purchases is led primarily by first-time home buyers, who feel better in a position to buy under such favorable conditions. The competitive market, however, serves as a barrier.

Despite Higher Prices, Buyers Are Still Finding Deals

Perhaps the biggest deciding factor for people who are debating about looking for a new home in Minneapolis in 2017 is the currently low mortgage rates. Homebuyers can lock in a low interest rate, resulting in a more affordable home. It is expected for these rates to remain low, at least below 5 percent, for the remainder of the year. In hot real estate markets in places such as Blaine, such a mortgage rate is too good to pass by as people don't want to wait and take the chance of it increasing next year.

Finding a Place Now as Home Values Appreciate

Early predictions are coming in for the Minneapolis real estate market, and experts are seeing that Twin Cities home values will continue to increase by as much as 5.8 percent for the year, and the market is only expected to further tighten for prospective home buyers. For a person who has always wanted to find a first home or a dream home in the Twin Cities area, now may be the right time to locate the right property before home values appreciate to the point where prices are outside your financial range.

Yet buyers should still give themselves enough time to find the ideal place and not just jump on the first home that they see because they are worried about the low home inventory and increasing prices. Purchasing a home that isn't what you wanted will only lead to more financial and emotional woes later in life. Instead, completely evaluate your present financial situation for purchasing a home, take into consideration the types of amenities you want in a property, and make the best decision for you buying situation.

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