We are in the midst of a robust housing recovery in the Twin Cities, with recent reports showing that median home prices in our market were up 17 percent in July 2013 over a year prior.
While homeowners are cheering, many are wondering if these spikes are an indication of another housing bubble. At Edina Realty and across the industry, experts agree that these double-digit increases are not a long-term trend. While it's true that prices are rising as fast as they did during the bubble years, median home prices are still lower than they were, even when adjusted for inflation. While pricing gains are likely to continue, it's all part of the slow market correction we've been witnessing for the last two years.
So, what else is preventing us from another bubble? Well, the uptick in pricing isn't set to last. Right now, buyers are entering bidding wars and offering contingency-free in order to purchase from limited inventory while mortgage rates remain low. We do expect continued growth, but it will become more moderate as homeowners come above water and begin selling, and as mortgage rates continue to increase. Additionally, government oversight and tighter lender regulations have led to greater consumer protections.
Wondering what your home is worth? Get in touch for a free home value estimate today!