The 2013 Twin Cities housing market is shaping up to be a story of the haves and the have-nots. In this case the haves are Sellers, who are going to find stronger buyer interest for their home than sellers have seen in nearly a decade. On the other hand, Buyers are the have -nots, as they will struggle to find homes in their price point before another buyer does.
2013 is going to surprise a lot of people with severely restricted housing supply, strong buyer demand, and accelerating price increases. The crux of this situation is found here:
With the number of homes for sale now at 10+ year lows and buyer demand that is the strongest in more than half a decade, we simply do not have adequate supply to satisfy the buyer demand. New home builders are rushing to increase their output and more traditional home owners are putting their homes on the market but nowhere near enough to satisfy demand.
In just 12 months, the number of homes for sale dropped 31% – an astounding 5,500 units! In fact, in just 2 short years we’ve seen the number of homes for sale cut in half!
Buyers are already frustrated and this frustration will only rise come Spring and Summer. Sellers on the other hand are being pleasantly surprised. After years of being beaten down by continual price declines, prices rose strongly in 2012 and are poised to do the same in 2013.
Rising prices will bring more sellers to market, but many are still under water on their loans or psychologically cannot accept selling their home at a discount to what they paid for it and thus will sit on the sidelines until prices rise further.