Minneapolis Minnesota Downtown and the Stone Arch Bridge at Sunset

The Current State of the Minneapolis Real Estate Market

The real estate market is booming all across the country in 2021. With people snatching up homes at record speeds, buying or selling a home can seem like a daunting task. Luckily, if you’re in the Minneapolis area, we’re here to help.

If you’re looking to buy or sell a home in the Minneapolis or St Paul areas, this is the guide you need. Read on to learn about the current state of the Minneapolis real estate market.

Minneapolis Real Estate Market Trends

Let’s start with a look at the statistics. Numbers don’t always tell the whole story, but it’s a great place to start.

Houses are getting more expensive, there’s no getting around that. Depending on which realtor statistics you look at, median house prices range from $340,000 to $350,000 which is not cheap. These prices represent an increase of between 13% and 15% from this same time last year, an unheard-of one-year price jump.

Not only are houses getting more expensive, but they’re also getting harder to buy. Homes in the Minneapolis area are spending an average of around 7 days on the market, less than half the time they were on the market last year. So not only do you need to spend more money on a house, you need to decide on it faster.

Inventory Versus Demand

If you’re wondering why houses are getting so expensive and selling so quickly, the answer isn’t simple. However, one huge factor plays into it, and that is the number of houses on the market versus the number of people trying to buy a home.

Inventory has plummeted in recent years, even as overall home sales have gone up. That’s because of the extraordinary amount of active home buyers. While the number of home sellers has stayed consistent or even gone up a little bit, the number of buyers has well outpaced that, resulting in limited inventory and a competitive real estate market.

Buyers are Taking Risks

Because of how competitive the real estate market is in the Minneapolis and St Paul area, buyers are taking risks they normally wouldn’t.

For example, some realtors are seeing up to 30 or 40 percent of their buyers waiving house inspections in order to rush the purchase along and secure the home. Others are paying well over the asking price without considering if the house is worth it.

Get the Upper Hand in the Minneapolis and St Paul Real Estate Market

Just because the Minneapolis real estate market is extremely competitive, it doesn’t mean that you need to get caught up in the frenzy. At Elhm Realty, we’re here to help you buy or sell your home in a safe, informed, and competitive way.

Whether you’re looking to sell your home and want to take advantage of the favorable market, or you’re trying to navigate your way through buying a home, we’re here to help. Check out our inventory of houses today, contact us to talk to one of our incredible realtors, and we’ll do the rest. Happy house hunting!

House.

Undersupply: Understanding the Current Real Estate Industry

There’s no denying the real estate industry is soaring. In October 2020, year-over-year new home sales were up an astounding 41%, paving the way for 2021’s real estate market.

But what does this mean for buyers and sellers alike? How are interest rates and house stocks affecting sales?

During volatile economic times, investors are often quick to sell off stocks and bonds. As demand increases, so does the price. This then lowers the interest payment.

The result? Lower bond yields (interest payments), and lower mortgage rates.

To understand more about the current real estate market, home value, and why it’s a sellers’ market, keep reading for information every buyer and seller needs to know.

Current Housing Market

Did you know that more homes were sold in 2020 than in the last 14 years? This may have you wondering how long trends will hold out.

It’s expected that the housing market will remain hot throughout 2021. The results are sellers receiving over-asking-price for their homes, and multiple-offer situations occurring.

Multiple offer situations are ideal for sellers, since they’re able to sell their homes quickly while turning a sizeable profit.

But what’s driving buyers to purchase property with gale-force speeds?

Record Low Interest Rates

Record low interest rates are making the American dream of homeownership a reality. Interest rates dropped approximately 14 times in 2020 alone, dropping to numbers as low as 2.71%.

However, as the economy recovers, so will interest rates. Rates have already increased by .5% since the start of the year. Even though the current housing market favors sellers, there are more buyers than there are available homes.

This past April, St. Paul residents have seen a 6.1% increase in home sale prices. On average, a home in St. Paul sold for $260,000 after being on the market for only two weeks.

In April 2020, 327 homes sold. However, in April 2021, 404 homes sold. It’s obvious the market is still hot, and there’s no time like the present to become a first-time homebuyer, purchase an investment property, or move up to a larger house. Luckily, low inventory has been on the rise, something that affects the forecast for investors.

Other Factors in the Real Estate Industry

Record low interest rates and the desire to purchase larger homes have played a contributing factor in the real estate market. As more people work from home and provide homeschool instruction, the need for separate offices increased, as well as space to conduct virtual learning.

Families also invested in vacation properties in rural areas, looking to escape city life as the pandemic gained traction, causing people to remain home.

Real Estate for All Your Needs

The real estate industry is hotter than ever before. With homes in demand but an undersupply of inventory, it’s no wonder homes are selling at or above the asking price and in record fast time. Add to the mix low interest rates, and you have a seller’s market.

Whether you’re looking to buy or sell, Elhm Realty has you covered. Contact us today to discuss your next real estate transaction.

House For Sale By Owner Sign in a front yard of a house

First Time Home Buyer and Real Estate Checklist

Did you know that first-time buyers account for more than 38% of all home buyers? That’s a figure that has dropped considerably over the last couple of decades.

Buying your first home can be both exciting and daunting. It may seem like there are lots of hoops that you need to jump through when taking your first steps to home buying.

So, what do you need on your real estate checklist when you’re a first-time buyer?

In this article, we’ll look at the home buying process

Your Real Estate Checklist

If you’re a first-time buyer, the buying process will be completely new to you. Here is a home buying checklist in brief.

  • Determine your budget
  • Get pre-approved for a mortgage
  • Find a real estate agent
  • Visit houses
  • Put in an offer
  • Get an inspection
  • Get an appraisal
  • Close the sale

Let’s take a look at how to buy a home in more depth.

Determine Your Budget and Get Pre-approved for a Mortgage

Before you can even start looking for a home, you’ll need to determine your budget. It makes no sense to start house hunting until you’ve got an idea of what you can afford.

The best way of doing this is by speaking to a mortgage company and getting pre-approved for a home loan.

The lender will review your income and your credit score. They will then agree on a set amount of money that you can borrow. Once you have an in-principle mortgage agreement, you can start to find your perfect home.

Find a Real Estate Agent

Once you know how much you can spend, start speaking to real estate agents. Give them your budget and any requirements that you have from your home. Your real estate agent will then give you some suggestions for homes that suit your needs.

Visit Houses and Put In an Offer

Your real estate agent will then take you on tours of the homes that suit your needs. It can often be helpful if you take a tape measure with you when you view a home so you can see whether your furniture will fit.

It can be easy to become emotionally attached to a property that you view. If you’re 100% sure you like a property, put in an offer on it.

If you know you want to buy a home, submit an offer as soon as you can. It may get sold if you wait.

Get an Inspection and Appraisal

Getting your potential new home appraised and inspected is vital. The appraisal will confirm the property’s value for your lender, and the inspection will let you know whether there are any concerns about the structure or integrity of the property.

Once you’ve had these carried out, you may want to renegotiate your offer if the surveys flag up any issues.

Close the Sale

Once you’ve ticked off every box on your real estate checklist and the deal is going ahead, it’s time to close the deal. That means signing the papers and exchanging funds.

For more help understanding how to buy a home, speak to our team of experts today.