The Twin Cities of Minneapolis and St. Paul, Minnesota is a leader in the national housing market, known for its consistency in home value increases. The Twin Cities has had 29 consecutive months of median price gains, and housing demand is expected to grow along with wage growth and hiring in the area, according to a report by the Minneapolis Area Association of Realtors (MAAR). With housing demand increasing, buyers of Minneapolis investment properties should consider expanding their presence in the market and determine which areas of the Twin Cities are the most profitable.
The housing market in the Twin Cities is stable, which is likely to make it appealing to investors. And the direction the market moves in Minneapolis-St. Paul will likely reflect the national market as a whole.
“While the Minneapolis-St. Paul residential real estate market has been impacted similarly with national shifts, overall it continues at a slow and steady pace in its progress upwards,” said Jenna Thuening, owner of Home Destination, a Twin Cities real estate firm. “The fact that it has fewer swings remarkably in one direction or the other is one aspect that makes investors trust It as a lead indicator.”
Inventory rises in Twin Cities
While pending sales decreased 3.4 percent in July from the same period last year to 5,145, rising inventory in the Twin Cities is expected to help spur growth in the housing market, according to MAAR. Inventory grew as new listings increased 9.8 percent from July 2013 to 8,015. The market had a 4.4 month supply as of mid-August, with sales indicating greater demand for traditional homes sold at greater price points compared to distressed properties, the MAAR report said. While foreclosure and short sale listings plunged 42.2 percent and 45.4 percent respectively, new listings of traditional homes rose 21.6 percent.
Although the number of listings are higher, some realtors are concerned buyers may not flock to the market because of market constraints, CNBC reported.
“Yes, there’s more inventory, but not in all areas or price points,” said Emily Green, president of MAAR, according to CNBC.”The lack of supply is really starting to weigh on consumers and on sales numbers. This market has been supply-constrained for long enough, but the trend is moving in a positive direction.”
With buyer demand weak, investors should consider purchasing Minneapolis investment properties while prices are affordable and demand is high for rental housing.