The Minneapolis real estate scene has been booming in recent years. With the population steadily rising and the housing supply getting tighter, the city, along with neighboring Saint Paul, has become a seller’s market.
Certain trends in the Twin Cities’ real estate market are expected to continue into the latter half of 2019, while analysts predict some interesting new developments.
Here’s a closer look at what real estate insiders predict for the Minneapolis real estate market for the rest of 2019.
Demand will continue to soar
In March, 2019, the Twin Cities set a new record for median sales price in the area at $275,000, which was a 6.5% increase over the median price in March, 2018. This was despite the fact that there was too much rainfall, which could have accounted for the lower figures for closed sales and new listings compared to the previous year.
By May, 2019, however, pending sales reached their likely peak for the year, and new listings were at a 9-year high. The median sales price also increased by 1% to $285,000, setting another record.
Consistently rated as one of the best places to live in the US, the Twin Cities have seen a continuing influx of residents, a trend which PWC’s Emerging Trends in Real Estate predicts will not end soon. As such, the demand for properties here can only go up.
The demand for investment properties will rise
As home prices continue to increase in the Twin Cities and the under-44 population rises, rentals will likely be in high demand over the next few years. This makes it a good time to invest in rental properties in the city, including single-family and multifamily properties for rent.
New homes will hit the market
To keep up with the rising demand, builders are expected to double their efforts in developing new properties, which could turn the market into a balanced one. In May, 2019, a total of 9,402 new homes and condos were added to the market – the highest in nine years. This is 22% more than the number in April, 2019, and 2% more than in May, 2018. The added listings raised the inventory by 11% month-over-month.
How this plays up in the market remains to be seen. In 2018, the trend had also been for rising inventories until October, when it started to taper off. A report by the Shenehon Real Estate Center of the University of St. Thomas states, however, that the rate of new homes being added to the market is not keeping up with the expected rise in population, and this will likely result in another record high for median sales price by the end of 2019.
The mortgage rate as of May, 2019 was 3.84% for 30-year fixed loan – almost the lowest in two years. If the trend continues for the rest of 2019, this will encourage more home buyers to close a sale this year.
By all indications, the real estate market in the Twin Cities continues to be a very healthy and robust one. If you’re looking for homes for sale in Minneapolis, or are planning to sell your existing property, get guidance from the local experts. Get in touch with us here or call 612.807.9650.