Current inventory levels in the Twin Cities are at an 10+ year low. We typically see less homes available on the market during the beginning of a New Year, however this coupled with the slight increase in interest rates over the past few weeks are creating the perfect storm for selling this Spring or sooner. Last year (2015) started off with a huge bang – we saw multiple offers on just about everything we put on the market. So what is different heading into 2016?
Less inventory. Less homes for sale in the marketplace creates a higher demand for what is available. Higher demand typically results in multiple offers and homes selling for over asking price. In order to do this, the home has to be show ready and marketed properly or the seller will run the risk of just sitting on the market. We are encouraging our sellers to get their homes prepped right now and get it on the market within the next 30-60 days before the rest of the competition floods the marketplace. There is nothing better when selling a home than turning it live on the MLS and have several showings begin to over-lap. When serious buyers begin to see other buyers come through the property at the same time as their showing, there is a “Fear of Loss”. Fear of loss leads to offers at or above list price.
Interest Rates. In Dec. 2015, the Fed voted to raise interest rates for the first time in almost a decade. Interest rates still remain low, however with the indications of rates on the uptick vs. status quo, we may see more buyers wanting to get in while rates remain historically low.
These two factors alone should make for a very busy start to 2016 and the Spring Real Estate market. If you would to view the full Monthly Indicator report from SPAAR, click here for the link.