Hopes For Minnesota Real Estate Recovery Will Have To Wait
The Minnesota real estate market may fall further than previously thought as foreclosures and unemployment worsen. Homeowners who took out adjustable rate mortgages are finding it nearly impossible to refinance due to the drop in value of their home, which will add on to the foreclosure sales that already account for more than half of homes sold in Minnesota. See the following article from Housing Predictor for more. In Minneapolis and St. Paul, neighboring cities known as the Twin Cities, pending sales are improving, but the federal first time tax buyers credit is attracting bargain hungry buyers, who are hunting for discount deals throwing the market into the financial doldrums. Many first timers are putting in low-ball offers even on already discounted bank owned properties. Outside of the Twin Cities in Bloomington, new homes sitting on the market after being finished by new home builders have supplied a boom for first time buyers looking for deals as builders offered incentives to purchase their homes. But with low interest rates and a smaller inventory builders aren't offering as many incentives anymore.
Local Markets at a Glance
However, adjustable rate mortgage resets are making it impossible for many homeowners to refinance their homes since values have dropped so much. Foreclosures are rising as a result and should impact the market and most of Minnesota for at least another two years, barring major government intervention. Rochester is forecast to see home value average deflation of 9.1% in 2009.