With all the bad real estate news we have had in Minnesota over the past 7 years 2012 was much better and 2013 looks like recovery is in full swing! In 2012 Minnesota home prices saw an average 9.2% increase in home values. Now some cities and areas saw more or less but this average is the best we have seen in years.
Why are Minnesota homes prices on the rise? I think there are a few reasons. One we have a relativity strong economy compared to the rest of this great country, we usually do. We can’t forget about interest rates, those are usually good for buyers. But right now and in most of 2012 our inventory of homes has been low driving up buyer competition and getting new construction back into the mix. New construction is at it’s highest level in 6 years which creates good jobs and thus more money for the economy.
When the home inventory is low this means buyers compete with other buyers for homes which in turn usually means a better sales price for the seller. So in other words the buyers market is long gone. We survived the huge influx of short sales and foreclosures. I’m not saying foreclosures and short sales are over with, not by a long shot. The difference is the ones coming on now are able to compete and help supply our tiny inventory without flooding the market. Remember, a huge reason the market went backwards was a massive supply of homes to which the banks needed to unload quickly and were willing to do so for less money than traditional sellers could compete with. Now that things are slower banks are able to sell homes quicker and even make some more money at the same time.
All this leads to Minnesota home prices on the rise. For your free consultation regarding Minnesota Real Estate feel free to contact me below for a no hassle, no pressure conversation.