Minnesota Real Estate Market Update
Minnesota is currently plagued by an unprecedented strain in its property market. Home values are losing their once impressive figures as they took a nose dive last year. This has lured homeowners off the sidelines and enticed some buyers to snap bargain prices.
The Twin Cities of Minneapolis and St. Paul are both facing a downturn in the real estate market. Actuated only by foreclosure and short sales, there is a slim chance of early convalescence in the market. Minneapolis is lucky to have slower home value depreciation compared to other cities. On the other hand, St. Paul is rapidly suffering from a rise in home inventory. Still, the local government is hoping to ease foreclosure rates through the cheap houses that are for sale. Home values for both cities are forecasted to depreciate by 13 percent.
The port city of Duluth is experiencing a lethargic property market. Job opportunities remain bleak in the area as manufacturing and construction companies had weaker balance sheets last year. Home values in the area are considered to be the lowest in Minnesota. RealtyOutlook.com expects a plunge in home prices by only 8.5 percent this year, not bad for a city with more job cuts scheduled in the second quarter of the year.
Rochester’s property market needs to recover from the inundation of vacant single family homes that are quickly losing their values. During December, home sales in the area are already dwindling but come March, it begins to spur more sales eventually. But this will be curtailed by the resets of adjustable rate mortgages. By the second quarter, expect more foreclosures to pile up in the market. In 2009, home values will deflate further by 11.5 percent.
Bloomington, the main hospitality hub in the state, was poised to suppress the impact of the financial crisis when investors were confident enough to build new homes. But the market conditions were not forgiving at all. Homes are still in need of buyers who are willing to risk their funds during this recession. RealtyOutlook.com expects Bloomington’s home values to slow down and fall by 11 percent in 2009.
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