Home Selling / Buying Season May be Unpredictable in the Twin Cities
The real estate news in the Twin Cities is a mixed bag.
The final month of the home buyer tax credits and fewer foreclosure homes available for purchase raised home prices in April. The median sales price of a home sold in the Twin Cities metro area rose to $169,800. That is an 11% increase from April 2009. It was the fourth consecutive month of year-over-year price increases. It was also the fourth straight month of month-over-month increases, with prices up more than 8% since January.
This good news for home sellers may be short lived, though.
The $8,000 federal first time home buyer tax credit has expired, and so apparently has demand for resitential real estate. Pending home sales in the Twin Cities for the week ending May 15 were one-third lower they were for the same week last year. Buyers who would have purchased a home in May or June decided to speed up the process and take advantage of the tax credit that expired April 30. Less demand may cause a decrease in Twin Cities real estate prices.
Additionally, officials are closely watching the slowly rising foreclosure rates in Minnesota. More foreclosure homes and short-sales could further depress real estate prices for traditional home sales in the Twin Cities and beyond.
There's a flip-side to that, too. There is concern among analysts and experts who believe that low real estate prices and low mortgage interest rates may not be enough to entice people to buy a home. The instability of the recession's recovery and personal financial obstacles may be pushing potential buyers into staying put for a while.
For people who are on the fence now and are considering purchasing a home in the Twin Cities metro area, don't forget that there are more than federal incentives to buy a home. The Minnesota First Time Home Buyer site is full of information about programs to help people buy their very first home.