Mood Swing

September 22, 2017 by Meg Decker

National news is mirroring some of what we’re hearing in the Twin Cities Metro market: Potential home buyers are uneasy about rising property prices. The Fannie Mae Home Purchase Sentiment Index (HPSI) saw a significant swing in attitudes from June.
 

• The HPSI dropped 1.5 points from an all-time high in June
• The number of people who said it’s a bad time to buy reached a new survey high
 

Answers to specific questions showed an overall deflation in consumers’ attitudes:
 

• The number of people who said it’s a good time to buy a home fell by 5%, while the number of people who say it’s a bad time rose 2%
• The number of people who said it’s a good time to sell fell 6%, while the number of people who said it’s a bad time to sell rose 5%
 

We don’t know what the survey respondents were basing their opinions on and that’s the tough thing about numbers like this making the news. It’s easy to form a general opinion, but it’s never a good idea to base a huge decision like whether to buy or sell a home based on general information. There are so many factors to consider when deciding to make a move that it’s critical to get specific information based on the home you have, what you’d like to buy, financing options and analyze how certain choices fit into your goals in the short, mid and long range.
 

On another note, several of our urban Realtors here at DRG have talked with people who are concerned that values are rising too much and too fast – and concerns like this could very well be what are behind the July HPSI numbers. The public – nationwide as well as here in Minnesota – remembers the fallout from runaway home price appreciation in the past. But the managing director and chairman of the Index Committee at S&P Dow Jones Indices, David Blitzer has reassuring insight: “Housing is not repeating the bubble period of 2000-2006: price increases vary across the country unlike the earlier period when rising prices were almost universal; the number of homes sold annually is 20 percent less today than in the earlier period and the months’ supply is declining, not surging. The small supply of homes for sale, at only about four months’ worth, is one cause of rising prices. New home construction, higher than during the recession but still low, is another factor in rising prices.”
 

Prices aren’t rising everywhere, uniformly or even necessarily to the extent that people fear they are. Just like individual people should get specific information on options for their personal circumstances, it’s important to check prices and other market information for individual properties and neighborhoods to get the accurate story. We provide the latest market information for renters, buyers and sellers every day. What’s your opinion about our local market? Do you have questions about prices, values or other market factors? Ask us – we’re here to help.

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