There are many stages in life where living in a rental makes sense. However, Inver Grove Heights home sellers know that there has been a considerable increase of people converting from renting to owning. This increases the number of buyers competing for first-time owner homes in the local Inver Grove Heights market. Part of this drive may be due to many company’s business models rolling over into home-based work. Another phenomenon that has come to light, more wealthy investors are updating their investment plans to move with the market, making their second home purchases for retirement earlier than previously planned, increasing the shortage of available properties on the market.
Riding the Wave
Like a wave, new housing production is growing, but the cost of materials and labor is pricing new homes at an all-time high. Because of that surge, it leaves a backlog of properties completing for the hungry buyers who want them. Let alone the rise in demand that has emerged since the pandemic. Low-interest rates also push buyers into the market that may not have otherwise been able to afford as much housing. There are even state programs for first-time homeowners who can get into a house with as little as $1000. We have, as agents have helped many use that program during these competitive times.
The National Association of Realtors reported in October of 2020 that there were fewer homes for sale now than ever. Here in Minnesota, the number of houses sold in January 2021 vs. January 2020 was up over 25%, while inventory dropped 17%. If no other homes were listed on the market starting now, there is just over a one-month inventory supply available in the twin cities. There has also been a stall in the number of homes listed by sellers that would typically be making an upward move in housing, such as moving up from a starter home. Many homeowners choose to stay in place to see how they are involved and settle out before risking what they have in place. These factors have combined to create an epic seller’s market. This lack of housing, coupled with the surge in demand and shortage of housing units available, has caused a perfect storm. The result is causing prices to soar. Read on to discover what Inver Grove Heights home sellers should know about the real estate market Inver Grove Heights.
The Trouble With Bidding Wars
While a seller’s market may sound like a scenario, most sellers would like, Inver Grove Heights home sellers should know that bidding wars affect the real estate market in Inver Grove Heights. When buyers bid above the amount the home will appraise, they come in at an acceptable loan to value the mortgage. There is a potential to lose your buyers, should they find themselves in a bidding war. Some decide that it is not worth all the effort after losing a couple of houses to bidding. They may not have the finances to afford the higher monthly payments and a higher principle, let alone the additional cost of mortgage insurance. And may not have enough cash on hand to cover any shortage between the appraisal and the final purchase price.
What Goes Up Must Come Down
All good things come to an end. To understand the current market for Inver Grove Heights, you need to know that housing has continually cycled up and down through the years. Prices had already begun to trend upward before the pandemic and continue to rise this year. Under the current conditions, most first-time homebuyers facing the rapid jump in listing prices cannot afford the average home. Inver Grove Heights home sellers should be acutely aware that the current rising price trend on the real estate market in Inver Grove Heights cannot continue indefinitely, and the real estate market may crash in the future. Indicators are that short sales and foreclosures, from the forbearance that is on hold now, will rise among households as we go into the summer months. Around 2.75 million mortgages are in forbearance under the CARES act’s protection at this time, with approximately 10 percent of all FHA-backed mortgages more than three months behind on payments in Minnesota.
Avoiding the Risks of Selling
Avoiding selling for too long may mean that sellers miss out on this rare opportunity to strike while the market is at or near its peak. Investors who purchased when the prices we low are now cashing in on the profits and selling the portfolios. When it comes to traditional listings, a significant number of people simply do not want to take the risks of meeting with strangers to negotiate or do business. Many would prefer not to have showings where buyers walking through their homes. With stress already at an all-time high for many home owners, the mere thought of the additional pressures of selling a home, especially when school and work are home-based, is too much to consider. Inver Grove Heights home sellers should know that there is another way to sell their home on the real estate market in Inver Grove Heights, by selling to a direct buyer like Minnesota Cash Home Buyers.
Ready to learn more about what Inver Grove Heights home sellers should know about the real estate market in Inver Grove Heights? At Minnesota Cash Home Buyers, we are here to listen and help you handle all of your problems. With fair prices, straightforward easy to understand contracts, and quick closings. Working with Minnesota Cash Home Buyers means there’s no need to delay selling any longer! Minnesota Cash Home Buyers will walk you step by step through the process and help you determine what is best for you! Send us a message or call Minnesota Cash Home Buyers at 6124445088 today!