Peaks & Valleys

June 14, 2017 by Meg Decker

There’s a lot happening in real estate lately and there’s something for everyone to pay attention to. The whole Downtown Resource Group keeps an eye on and answers questions daily about the market from homeowners and people curious about condos and lofts. Home prices are hitting new heights across the country and the market here at home is no exception:
 

• U.S. home prices have increased for 59 consecutive months
• Prices rose 1.3% between February and March
• Home prices have risen 5.8% year-over-year so far in 2017
March Home Price Index, Black Knight Financial Services
 

These numbers can be seen as a good news/bad news situation: They show that homeowners are building equity and getting great return on investment, but they can be intimidating to potential home buyers. It’s understandable that some people might wonder if they’ll be renting forever in light of the fact that eight of the 20 largest states have reached new home price heights this year. Couple that with the fact that there’s a shortage of homes for sale in certain price ranges, and it’s easy to see why renters might see this as bad news for them. The numbers here in the Twin Cities absolutely support the rising price, falling availability fear:
 

• Average sales price of homes is up 7%
• Number of homes on the market is down 19.8%
Minneapolis Area Association of Realtors (MAAR), April 2017
 

But the bright spot for home buyers looking for lofts, condos and single family homes comes courtesy of interest rates: Mortgage rates hit their lowest point of 2017 in the week ending May 25 according to government-sponsored entity Freddie Mac. Rising prices can have some effect on buying power, but not nearly as much as rising interest rates.
 

The real estate market is moving fast and new stats are constantly released. It’s important not to make assumptions or base major decisions on information you read, see or hear in the news. The recent price and interest rate numbers have something for everyone:
 

Home prices….
Homeowners: It’s time for a current market analysis and equity position review. What are your plans for the next 1, 3 and 5 years? The new numbers might be game-changing for you.
Renters: Prices are climbing, but don’t be intimidated. Interest rate movement has more impact. If you haven’t started looking or you’ve been looking for a while, it’s a good idea to get pre-approved or review your approval numbers in light of recent developments.
 

Mortgage interest rates….
Homeowners: Have you done a refinance? Is there a vacation, second or investment home on your mind? We can show you different scenarios that take advantage of the great rates.
Renters: While low inventory and rising prices may seem to be working against you, interest rates are on your side. A single percent increase can mean having to settle for less or not being able to qualify, so it’s important to act quickly to give yourself every advantage in a competitive market.
 

The good news for everyone is, our teams at Downtown Resource Group and our lending partner LeaderOne Financial are here to help. We can provide current market information, analysis and discuss options for Minneapolis homeowners and buyers. Now may or may not be a good time for you to make a move, but it doesn’t take long to see what’s possible.

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