Michael Smith Group November 2020 Real Estate Market Update
Has there been a better time to sell and purchase a new home in South Washington County MN? The housing market is incredibly HOT in Cottage Grove and Woodbury! Amazingly low interest rates combined with very high buyer demand, the statistics do not lie that 2021 will be an incredible time to move into a new home
In comparing year over year statistics of November 2019 versus November 2020, the numbers are staggering of how robust of a year it was for home sales. South Washington County including the cities of Cottage Grove, Woodbury, Afton, Stillwater and many other communities saw incredible growth in house listings.
Closed sales for the month of November 2020 were 5.8% higher versus 2019. The median sales price rose 13.6% in 2020 versus 2019. The number of homes that were listed for sale and placed under contract saw an increase of 10.6% in November 2019 versus 2019. The immediate result of this was a decrease in days on market by a whopping 25.5%
With numbers like this, a common assumption and fear many people have is the market is being set up for a “bubble” to burst like it did in 2008. The rational for why that is not going to happen will be discussed in a subsequent article but the principle to apply to the housing market heading into 2021 is simple economics.
Benefiting Communities – Cottage Grove | Woodbury
The greater Twin Cities real estate market has consistently been bolstered by the very strong economy and job market. Major Fortune 500 companies such as 3M, Medtronic, Ecolab, General Mills, Wells Fargo, US Bank, Cargill, Securian, and several others provide a robust job market. This strong job market attracts individuals looking for solid employment and with employment is the need for housing. Many of these companies are located in the East Metro area with cities such as Cottage Grove and Woodbury experiencing peak buyer demand due to the short commuting distance to work.
Mortgage Interest Rates
The next factor that is driving this market are mortgage interest rates. Mortgage interest rates are at historically low levels and buyers understandably want to take advantage of these rates while they are still here. To purchase or build a fantastic home in Cottage Grove or Woodbury and to be able to save thousand of dollars over the term of the mortgage just makes economic sense. Buyers at every level of the market are taking advantage of current rates. Older buyers “downsizing” but choosing to use a mortgage versus paying cash because they can invest their assets to achieve a better rate of return in retirement. First time home buyers are of course reaping the benefits of these rates and move-up sellers are taking advantage of this opportunity as well.
What does all of this mean moving forward for people looking to buy, sell, or build a new home? It means, if you have confidence in your employment security and have the funds available for your down payment, it is a fantastic time to purchase a home and to lock in your housing costs. Waiting for prices to drop will not likely work in your favor as mortgage interest rates will likely rise over time as will prices so making that move later will likely cost you significantly more than in the very near future. Ultimately, entering any investment involves risk and you should carefully weigh your options based on your circumstances.
Thank you for visiting my blog! My staff and I welcome your feedback and comments. Please let us know how we can assist you in taking advantage of this fantastic market!
