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If you’ve had your fingers crossed for a less crazy housing market, 2022 might be your year.
COVID remains a wild card in the market, but Gary and Susan Wahman aren’t predicting any major surprises going into this year. Their main piece of advice is to act now as home values continue to increase.
“COVID has had a big impact. People are spending more time at home and wanting more space in their home, and people have been driven away from common living situations,” says Gary.
Buyers can expect less panic this year as new inventory comes on to the market. Gary predicts that people will start to return to downtown Minneapolis if COVID subsides later in the year, which should free up some of the inventory that wasn’t available last year.
“Still, inventory might be tight depending on where you’re hoping to live,” Gary says.
Homes in the southwest suburbs are estimated to increase, especially with the onset of the light rail and demand for shorter commutes as people return to the office.
In general, the value of Twin Cities homes is expected to increase this year, but not at the same pace as last year. “It definitely depends on the community,” says Susan. “We can effectively see a five to ten percent increase in the Edina area. And while people might look at that and think ‘oh prices have increased so much.’ Really what has happened is that prices have caught up to where they should have been if it wasn’t for the Great Recession.”
The market is still recovering from 2008, especially in the homebuilding market. Since the recession, the homebuilding market hasn’t been able to keep up with the demand for single family homes, making existing homes even more valuable.
The long-term trend is that it’s going to get increasingly more difficult to buy a home. While buyers might catch a break as early inventory frees up, the Wahmans say that there is a whole generation of millennials who have been waiting for a good opportunity to purchase their first homes.
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“The buying pool for millennials is so large. It’s just such a large cohort. Just in the Twin Cities in general, the population is increasing,” Susan says.
With plenty of factors driving demand, there are things buyers can keep in mind when purchasing a home this year.
The Wahmans recommend getting some professional help when it comes to purchasing a home. A series of inspections and appraisals can still make a difference in the home buying experience.
“There are still mistakes you can make, and those mistakes can be expensive when it comes to home buying. That’s why it’s important to still go through with those inspections.” says Gary.
Aside from making sure buyers’ finances are in order, keep the old real estate axiom “location, location, location” in mind since the location of the home is going to ultimately drive its long-term value.
Their last piece of advice is that buyers might need to be ready to do some home improvements themselves. Buyers might get a better value buying a fixer upper than a more expensive home with brand new construction.
“If there are any great bargains on the market, it’s probably the houses that need just a little bit of work,” Gary explains.
With a little extra hope in the Twin Cities market, 2022 might be the year to find a place you call home.