It's shaping up to be a strong year for the real estate market in the south Metro area. Here are four reasons why Northfield buyers and sellers should be optimistic for 2015, and one reason to worry.
1. Inventory is low, hovering around 65 listings in Northfield in December and January so far. This is low even for this time of year. In order to get back to the "usual" number of listings, 100 properties would need to come on the market in the next 4 months. While that would seem to be a huge flood of listings all at once, the pent up demand from buyers should enjoy the variety of choice, but it may also create a stampede of buyer competition for good quality listings. I've had over 40 showings on a few of my listings in the last year, so I know that buyers are out there. From the feedback I get from them it's clear that many are getting anxious to buy, having been looking for a year or more for the right property.
2. Affordability continues to be the rule of the day. Interest rates and mortgage are affordable, new loan programs are being rolled out in FHA with even lower premiums being considered. Down payments of 20% or more are always a good idea for a number of reasons from financial benefits in savings on mortgage insurance to peace of mind from an equity perspective. But if a buyer is short on cash, FHA and USDA Rural Development (yes, Northfield still qualifies) have programs for 3.5% down and $500 down for those who qualify, making home ownership within reach for many career renters and newcomers to the housing market.
3. The market continues to improve after a good 2014 in Minneapolis and surrounding communities. Though listings are fewer the quality has been better with fewer foreclosures and more traditional sales. Many communities saw increases in average sale price with the same or less time on the market. Read all the metro data here for 2014. Northfield's 2014 had fewer listings but more sales than 2013. Read about Northfield's 2014 stats here.
4. Northfield has received recent accolades for being a highly desireable place to live, making the top of lists for national rankings of small towns in 2014.
The challenge that I keep seeing in the Northfield real estate market relates to reason #1, the low inventory. I keep hearing from buyers that they can't find the type of property they like where they want it. Many sellers are reluctant to list their property for sale before they've found a place to go. It's a common problem in a small town because we just don't have the suburbs and connectedness of a larger city. Northfield is a small town, which is great in some senses and limiting in others. Many buyers end up looking in other surrounding towns like Lonsdale, Cannon Falls, Farmington, and some end up choosing a location like Lakeville or Apple Valley to be closer to a larger variety of services, dining establishments and everything the metro area has to offer.
Here's a good read on four reasons for optimism (and one for worry) in 2015:
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