Minnesotans experience shortage in housing market.
The housing market in 2013 has had striking similarities to a game of Where’s Waldo. Competition amongst buyers has remained steady as houses receive multiple offers at a fast rate. By the time a home is listed online, it may in actuality already be off the market. Inventory levels are beginning to rise, relieving the stress prospective homebuyers have felt during the search for home sweet home.
Rising values bring more sellers off the sidelines, putting more homes on the market. The housing market has bounced back as the latest report from the Minnesota Association of REALTORS shows. Now is the time to buy AND sell. An 18.1 percent increase in new listings has resulted in the median sales price maintaining its steady growth. Statewide sales prices have increased from $153,000 to $172,513, a 12.8 percent increase as homeowners receive 95.5 percent of their original price. Now is the time to list a home so why is there a housing shortage?
- Homeowners are waiting for values to go up. “A relatively small housing inventory mixed with low interest, makes for a great time to sell” said Chris Galler, CEO of the Minnesota Association of REALTORS® . Galler cautions against holding out hope that home values may continue to rise back to the days of 2005 and 2006, saying that is not likely. “This is the new normal,” he added. Meaning, the housing market has recovered to prices that are more in line with a stable economy, not inflated as they were before the housing market collapse.
- Homeowners are upside down. This homeowner is reluctant to sell because they owe more on their mortgage than the home is worth, also known as being “upside down.” Those who are “upside down” with their mortgage should probably stay put and not enter the rat race that is the housing market. As home prices continue to increase, fewer homes will be upside down. If you are upside down with the mortgage, only sell if you can either pay the difference in cash or if you qualify and can prove a hardship you may be able to do a short sale.
- People are biding their time searching for the dream home. This way of thinking is a catch 22. There no longer exists the possibility to perfectly time selling a home and buying a new one. With so few homes on the market, when you do see a home you like, most likely many other people will too. By the time you put your home on the market, the home you wanted will probably already have sold.
- Less foreclosures and short sales. While economically being a positive trend, a decrease in foreclosures and short sales does result in less homes on the market.
Chris Galler, CEO of the Minnesota Association of REALTORS® believes the increase in new listings is a good sign. “We hope to see this trend continue as we get deeper into the busy summer selling months,” said Galler. “Potential buyers and sellers should take advantage of the solid housing market we are currently in.” Homeowners who want to take advantage of this market should list their homes for sale now when more buyers are actively looking.
The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry.