According to the MN REALTORS® Association, in 2016 there was an increase in transaction numbers and home prices. Although affordability was high, property selection was abnormally low. In many markets, there are simply not enough homes for sale, including Chisago County.
This is a two-fold problem: many typical sellers are unsure about the real estate marketplace for their buying needs. Many would like to move to new construction, but have not been able to find a home that suits their desires.
Many of the first-time buyers from the early 2000’s either don’t have enough equity to sell, or they simply bought a home large enough to satisfy their needs for a longer period of time.
The 2017 the marketplace for home sales is projected to be good, but not as strong as 2016. Some Baby Boomers have delayed their move because of older children returning home or a lack of desired inventory. Developers have been working hard during 2016 to get product to market. In 2017 we’ll see more new construction opportunities for move-up home buyers, which will free up inventory as they sell their existing homes.
New households are forming in the Millennial generation as they get married and have children, and then buy a home. In some instances, the new households will have condos or town homes to sell.
Interest rates will rise in 2017, and they have already started in the past few weeks. The increase won’t be tremendous, but will help people recognize that now is the time to purchase. It will cut into the median home price number slightly, but not enough to see it move backward.
Job growth remains strong, and that confidence will lead many to establish roots. Rents in many markets have increased faster than ownership costs. This increase makes it harder for first-time buyers to accumulate the funds needed to purchase a home.
In Chisago County January through October 2016 closed sales were up 5.2% over 2015, the median sale price was up 11.5% to $212,000, new listings were down 2.3%, and inventory was down 24.4%.
A professional real estate agent can analyze your situation and help you develop the best plan to sell or buy your next home.
Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to firstname.lastname@example.org. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.