Despite the pandemic’s harsh impact, the housing market hasn’t flatlined like other vital sectors. For residents of twin cities, the current real estate market is a seller’s one, with a low home inventory catering for an abundance of buyers. So, what is causing this shortage? Real estate experts believe that many homeowners are now seeking spacious homes; to cater to their new COVID lifestyle.
That’s not all. The mortgage rates remain low and more people are looking to buy vacation homes that offer an escape from the hassle of urban cities. All this has resulted in a surge in home prices. For instance, in Minneapolis, the costs increased by a whopping 8.9% in 2020 compared to the previous year. According to Zillow, these prices could leap by an additional 7.3 in 2021 because of the low inventory.
Gone are the days when buyers and sellers relied on seasonality to decide when to make real estate transactions.
How to Navigate the Current Crazy Housing Market
Tips for Buyers
If you are a buyer, knowing what to expect makes you better prepared. Chances are you might pay more than the seller’s asking price. Remember, since there’s low inventory, sellers are receiving countless offers. So, if you want that house, then you might have to pay slightly more.
Another thing to consider is the location. The pandemic affected the Twin Cities differently, making the buying process different for every area. So, expect either a virtual tour or open-house or both.
Here’s how to navigate the crazy seller’s market happening right now.
1. Obtain a mortgage preapproval
A preapproval is an evaluation of your finances. The lender will look at your credit history, income, assets and debts, to determine your creditworthiness. This process aims to discover credit problems that could prevent you from buying your dream home. With the preapproval letter, you can comfortably gauge your home purchase costs.
2. Go for cheaper homes
Looking at the current Minnesota housing market, your prospective home will likely have several bidders. Therefore, it can be a smart move to go for a home that’s lower than your budget. This strategy gives you an allowance to pay more than the asking price while still sticking to your budget. You wouldn’t want to run through your savings to get that house closing.
3. Get an experienced real estate agent
4. Be patient
It’s not surprising for buyers to choose the first house they see for fear of missing a place, especially if they intend to sell their present home. However, your real estate agent will likely advise against this to prevent you from making a poor financial decision. Remember, your home is an investment. Be patient and only settle on a house that meets all your needs.
5. Be flexible
While you may be dreaming of a particular house for its ideal location, we recommend being flexible to not miss out on other hidden gems. Begin by determining what it is that draws you to that neighborhood. Once you’ve identified this, talk to your real estate agent to help you find areas that have similar features offer the same amenities.
Tips for sellers
As mentioned earlier, home sellers are having a ball. According to StarTribune, home sellers received over 98% of the asking price this year compared to 2020. Also, houses have been selling quite fast, 14 days faster than they did before.
Therefore, the first tip would be to sell now while it’s still a seller’s market. We recommend talking to an experienced real estate agent to ensure smooth transactions. Now, even before you sell your house, chances are you are looking to buy another one that’s either bigger or in a different location. So, you too have to think about this seller’s market as a buyer. This brings us to the second tip.
Two options exist. You either sell your house first but request the buyer to wait till you get a new place. Alternatively, you could opt to buy a new home before selling your current one. We would recommend the latter. The reason is that you’ll pick a house that ticks all the boxes. This option is much wiser since it allows you to move out comfortably without feeling pressed. We’d also recommend getting a mortgage preapproval first to know whether the second option is applicable. To facilitate a quick move, Transition Realty will even buy your house.
Finally, while house viewings have become less complicated, this shouldn’t mean lessening your preparation efforts. Do your research to learn buyers’ trends, such as paint preferences, landscaping, and floor plans.
Working With an Expert Real Estate Agent
Steve Lehmeyer has over two decades of experience in real estate. By working with our team at Transition realty, we guarantee an efficient house sale or closing. We also provide our clients with home valuation reports and a complete home seller checklist. So, if you are looking to buy or sell in this crazy housing market, don’t fret. Call us at 612-298-1900 to get started.
About Transition Realty
Transition Realty owner Steve Lehmeyer specializes in helping people manage real estate transactions in the Minneapolis/St. Paul area. His experience in the Minnesota real estate market spans 20 years. Steve and his team work with clients to buy & sell single-family homes, townhouses, condos, lake homes, and investment property. Download a free home search app for your smartphone or search the MLS at TransitionRealty.com.