Paul real estate market continued doing more or less exactly what it’s been doing: going strong in the low- and mid-range housing sectors and holding steady, but slower in the upper echelons. At the end of Q1 2016, pending sales had risen 12.6 percent year-over-year and median sales prices had risen a solid 5.7 percent over 2015 numbers. Although local real estate groups have expressed concern over limited inventory (regional levels fell 20.6 percent year-over-year), local tightening has been good for sellers in the area who are, at present, almost 97 percent likely to get an offer at or above list price and be able to sell their home within three months. Of course, that three-month span is large- ly specific to mid- and lower-tier homes; properties priced in excess of $415,000 tend to take a little over seven months to sell. With prices rising steadily since their recent nadir of $167,000 in 2012, Minne- apolis-St. Paul represents great opportunity for real estate investors interested in gener- ating income from their investments a little faster than other markets might allow. Thanks to the low inventory, qualified buying population, low crime rates and steady employment, the Twin Cities are certainly the place where the local population prefers to buy. Investors who
BACK IN THE 1980s, Minneapolis and St. Paul—the “Twin Cities”—had a repu- tation for kidnapping each other’s census takers in order to prevent reports that one city had outgrown the other. That spirit of competition in the Minneapolis-St. Paul area is still alive and well, but these days, the result is a true “sweet spot” in the Midwest when it comes to industry, growth and, of course, housing. While the Twin Cities are not known for astronomical appreciation rates, they are, at this time, ideally situat- ed to generate wealth for investors hoping to access mid-range buyers who value family, safety and stability. ATRUE‘CRYSTAL-BALLMARKET’ In 2014, Trulia researchers, headed by the website’s chief economist, Jed Kolko, pulled all the available housing data from the past 24 years on the 100 largest U.S. metro areas and on the country as a whole to determine which markets, if any, consis- tently foreshadowed larger market changes. Minneapolis-St. Paul won the award for the best “crystal ball” market for local pre- dictive behavior indicating not only the most recent housing crash and multiple dips in the 1980s, but also housing booms and housing plateaus—periods of stable,
predictable growth on a national level. In the report, the team noted that the area was, in its opinion, a “relatively good bell- wether” for the national housing market. Of course, bellwether markets are both good and bad. They are great from an observational standpoint for investors hoping to get ahead of national trends. However, investors active in the area must keep a close eye on market movements because they are likely to get less warning in this area of major changes than they might in other areas of the country. Fortunately, at this time Minneapo- lis-St. Paul is looking good, thanks to a healthy combination of a strong jobs market (unemployment has held steady below the national average for more than a year and presently is hovering around 3.7 percent), powerful industry presence in multiple sectors (Forbes, Inc. and Fortune lists are full of companies with big regional presences in the area) and a steadily growing, warm-but-not-over- heating housing market with plenty of opportunity for investors to sell to buyers with good jobs, steady employment and solid mid- to upper-range housing goals.
THE MARKET AT A GLANCE This past spring, the Minneapolis-St.
90 | think realty magazine july :: august 2016
Made with FlippingBook Online document