MINNEAPOLIS (WCCO) –We’ve been waiting six years to tell you this: Median home prices in the metro finally topped $200,000.
And that’s just the beginning of the story.READ MORE: Driver Leaving Argument In Car Crashes Into House, Police Say
According to the Minneapolis Area Association of Realtors, the number of people who signed contracts to buy homes is up almost 15 percent. And the number of new listings is up 20 percent.
Dave Doran, a broker with Exit Realty Metro, says many homes for sale in south Minneapolis are getting multiple offers.
“They were worried that they were unable to break even or make enough for a downpayment for their new home. With the recent shift in the market, they were actually able to sell in a week, and make enough on that sale to put 20 percent down on a new construction home,” Doran said.
As a result of raised home prices — new construction is picking up.
“They’re starting to see that and say, ‘Well…maybe I only have to spend 40 or 50 thousand more to get a brand new home or a modified custom home, you know, I might make that leap…versus buying an existing home,’” said Mary Bujold, the president of Maxfield Research Inc.READ MORE: Free Beer For COVID Vaccine: Brewery Works To Incentivize More People To Get Shots
Maxfield Research is a real estate research and consulting firm, and Bujold says one of the reasons that median price is higher is because there are fewer short sales bringing down the average home price.
“Because of the economic recovery, we’re seeing many…fewer distressed properties in our market,” she said.
Another indicator of consumer confidence is that traditional homes, on average, sold for 97.7 percent of the original list price.
“Homes are fairly priced, and buyers are seeing that value,” Bujold said.
So how do mortgage rates play into this? Right now, they’re around 4.5 percent– that’s up a bit from past months.MORE NEWS: 4 Former Minneapolis Officers Indicted On US Civil Rights Charges In George Floyd's Death
Bujold says older buyers who bring more equity from previous homes are less phased by small increases in rates. First time home buyers, however, tend to be more nervous.