New data released by the Federal Housing Finance Agency shows that United States home prices have reached pre-recession levels, and that Minnesota’s growth is outpacing the rest of the country and the Midwest, particularly.
The FHFA’s house price indexes show that this metric has reached a peak not seen since the second quarter of 2007. This measure is a weighted index that measures average price changes in homes in repeat sales or refinancings on the same properties
The data shows that Minnesota homes have appreciated by 6.7 percent over the past fiscal year, a full percent higher than the national average. This is the 12th highest rate in the United States, and more than a full percentage point higher than any neighboring state, two points higher for all except South Dakota. Oregon saw the highest rate of growth at 11.8 percent, while Vermont experienced a negligible 0.6 percent increase over the past year.
“[That growth] is concentrated in the seven county metro area around the Twin Cities,” real-estate agent Kevin Dimmel said, “It’s like an island and then there’s the rest of the state. It’s insane how high the prices are here versus out-state areas of Minnesota.”
Dimmel is a realtor with Weichart Realtors, and has been in the business more than fifteen years, earning his license in both Minnesota and Wisconsin. He stated that the high growth percentages reported aren’t necessarily his experience, but that he believes the increases he has seen has been driven by low housing supply.
“There’s a shortage of houses for sale, quality houses,” said Dimmel, “I sold a home today that never even made it to market.”
At a metropolitan area level, the Minneapolis-St. Paul-Bloomington area saw 5.06 percent increase in house prices, ranking 117th nationally. Duluth’s 2.86 percent rate of appreciation ranked 185th nationally, and the Mankato-North Mankato’s area’s rate of 3.55 percent ranked 160th. Rochester placed 167th with a 3.32 percent increase, and St. Cloud clocked in at 145th with a rate of 3.9 percent.
All of this is good news for those looking to sell their home, but the increase in prices is not necessarily bad for buyers either.
“You don’t have to ask above asking price to get a property,” said Dimmel, “You just need a strong offer.”
Dimmel advised potential buyers to ignore the media’s reports about a “sellers’ market” and just to focus on presenting a quality offer with all the financials lined up beforehand.