MINNEAPOLIS (WCCO) — There are signs the housing market may be taking a turn for the better.
Especially when it comes to a certain type of house.
“Don’t want a huge house, because it’s just going to be me,” Phil Kim said. “Don’t want an overly small house, because, obviously, I don’t want to live in a shoebox.”
Kim is looking to get out of his Minneapolis apartment and become a home owner.
Problem is, so are a lot of other people right now.
“There are places that I would love to buy and then you talk to a real estate agent and they’re like, ‘Okay, it’s gone,'” he said. “Well it just got on the market this morning, ‘But yeah, it’s gone.'”
That is especially true for homes priced under $140,000.
For the past couple months those homes have been going onto the market at a rate of about 1,100 a month. And they are being sold at a rate of about 900 to 1,000 a month.
“It’s one of those things,” Kim said. “For a buyer you have to be ready to just pounce on it.”
That’s because if you are looking to buy a $140,000, two-bedroom house in Minneapolis, you may find that your mortgage payment is similar to your rent payment.
If you factor in a 4 percent interest rate for 30 years and add in insurance and taxes — you are looking at a monthly payment of about $1,061. On the flip side, the average rent for a two-bedroom apartment in Minneapolis is about the same price — about $1,000 a month.
Of course, that varies depending on where you are looking in Minneapolis and even the surrounding suburbs. But with a very low interest rate, houses are going for what some condos and townhomes went for five years ago.
While experts aren’t quite sold on this trend, they believe it’s a good sign.
“We are hoping that this time is for real, that there isn’t anything that’s going to come along and derail this,” said Herb Tousley of the University of St. Thomas. “Because we have had a couple months of good numbers, so we are hoping that it’s going to continue.”
Tousley helped conduct this study. He said traditional home sales are also up. And foreclosure sales now make up less than 50 percent of the total homes sold.