2017 Residential Real Estate Outlook for Minnesota
Over the years the value of the residential real estate in Minnesota has changed along with the financial condition of the state. If the state financial health is low, it only stands to reason that the real estate will be affected. The Minnesota government is mandated by law to put together an analyst report, twice a year, of the state’s budget and economic forecast. Those in the real estate business or looking to buy or sell real estate use this analyst for an estimated idea of how the interest rates will be for that year. It helps them to determine if the interest rates will increase or decrease for the calendar year. With that in mind, let’s take a look at their recent budget and economic forecast.
Government Jobs Supporting Real Estate Growth
Minnesota budget continues to remain stable but with a slower revenue growth, this should setup Government employees to feel comfortable buying a home in 2017. The balance at this time has increased by three hundred and thirty-four million dollars leaving the balance at six hundred and seventy-eight million dollars. By state law, they are obligated to always keep three hundred and thirty-four million dollars in their budget reserve. With that said, it has more than doubled over the past year. This budget forecast was released and written by the Minnesota Government called “Minnesota’s Government Budget Outlook Remains Stable.”
Will the prices rise or decrease in 2017?
With the U.S. interest rates on the rise, it will give a larger increase demand for U.S. currency. In turn, the residential real estate in Minnesota will still gradually move forward in 2017. Thus, making it more difficult for the average income to be able to afford an adequate housing living space within their budget. In spite of the interest rates, risks, and policy doubts moving forward, overall 2017 is anticipating another good year.
In other words, people are willing to purchase a home even though they are unsure of what the outcome will be. It’s common knowledge that when the state of Minnesota’s budget increases it could bring more job growth to the state. If job growth increases, real estate will increase. It is a prime time to buy real estate in Minnesota and place it up for rent. Because with substantial job growth comes those that can afford to live on their own.
Review from the Urban Land Institute
Across the state of Minnesota, a prediction was made that the housing real estate will have steady, sustainable growth in 2017. The Consensus Forecast from Urban Land Institute (ULI) of the housing market gives multiple surveys to reach their prediction. They use thirty-two of the primary real estate investors, advisories, research firms, and organizations. They predict across the nation that the housing market will be on the rise in 2017.
In the Minneapolis and St. Paul, Minnesota area, the housing market is growing at a much faster rate than the suburbs. Together there has been an increase of 6.8 percent over the past several years. However, don’t dismiss the suburbs in this area because they too had an increase in the housing market of 5.1 percent. The executive director of Urban Land Institute Minnesota Caren Dewar stated that the trend of living in the Urban areas is coming from the empty-nesters.