Good News for the Housing Market, but Can it Last?
The national housing market is improving. According to a report by the National Association of Realtors, pending homes sales are at their highest levels since September of 2010.
Although the market has gone through several ups and subsequent downs since the bubble burst in 2007, market indicators show that this recent improvement is likely to stick. New construction is up, the percentage of homeowners underwater on their mortgage is down, and according to a report from the S. & P. /Case-Shiller Index, sale prices for existing homes rose in April.
Nationally the outlook is good, but how is Minnesota fairing?
Overall, the housing market in Minnesota is doing well, especially in the Twin Cities Metro Area.
The S. & P. /Case-Shiller home price index indicated that home prices in the Twin Cities were 3.8% higher this April compared to last year, and according to a report, housing starts in Minnesota, based on the number authorized building permits, has steadily increased since the start of the year.
Joe Niece, an Eden Prairie real estate agent explained, in a New York Times article, that “he and his partner have seen their book of listings decline from about 120 properties to 70 properties, about 45 of which are already under contract.” This drop in the number of homes for sale indicates a much healthier market, one in which competition exists.
For now, the housing market is healthy, but sustaining the success is dependant on builders and developers changing the way they do business. The expensive realities of a suburban nation are taking thier toll. Roads and highways that were once easily maintained through gas tax revenues will, in the next few needs, a gas tax increase of at least one dollar to be properly maintained.
Funding a suburban life style has become increasingly unrealistic and increasingly out of line with the direction the state is going. With the construction of the light rail and a commitment to alternative transportation options, Minnesota’s housing market should reflect these sustainable initiatives. Rather than building giant homes in cheap, distant suburbs, builders and developers should focus on restoring current metropolitan housing stock, advocating for more transit oriented, mixed-use, mixed-income housing options.