09 Jul Our summer real estate home market in the Twin Cities
Our summer real estate home market in the Twin Cities
So many people ask me “what direction do you think our real estate market will go this summer?”. I understand they know I have seen over 30 years of trends and market fluctuations so they would like my insights. Ok, I am going to give some predictions. Here we go.
Since interest rates are a major driving force of this market, I am going to start with that. The federal reserve has said it will not begin to slowly increase interest rates until 2023. I predict rates will continue to be below 3% this summer and we might even see a slight decrease in the coming months. Inflation is a concern, but it has not impacted 10 years Treasury yield recently. So, these low interest rates will continue to improve a buyers purchase affordability.
What can I expect with housing inventories?
I believe the worst is behind us for low housing inventory. We will very slowly begin to have more homes on the market. But we will continue to have a shortage of homes and multiple offers. I see no end in sight for that. An example, we have 6,000 homes on the market now but last year we had 11,000 in the middle of a pandemic. We could have 11,000 now and those would be bought up quickly. Demand exceeds supply.
Will there be a market crash and are we in a housing bubble?
I read those articles from so call experts who say that we are in a bubble. Honestly, they are clueless. My background is economics and those who make those baseless claims have no idea what supply and demand economic principles are. The last time we had a real estate market correct was 2009. At that time, we had over 36,000 homes on the market and marketing times were substantially longer because we did not have enough buyers to purchase all those homes. Now we have record interest rates which helps purchasing power, we have only 6,000 (1/6 of that inventory of 2009), more buyers in the market than 2009 and an economy which is growing quickly from out of the pandemic. There are no parts of the equation that suggests we will see a slow down in our market in 2021.
If you have any questions about my predictions…do not hesitate to contact me.
Also, if you need advice on anything in Minnesota, just call me at 612-386-8600.
Look for more articles and videos in the future on different aspects of real estate and our state of Minnesota.
Real estate is a wonderful investment!
The Anderson Team