It's winter, but Minnesota real estate is still hot

Many Minnesotans are conditioned to think winter is not the time people are buying houses, but between people relocating for new jobs at the first of the year, or simply sky-high rent, experts are seeing a lot of interest in buying homes long before the snow melts.

The average rent in Minneapolis moved into the top 10 most expensive in the country late last year according to at least one national real estate database, and with interest rates are sitting at historic lows -- 3.8 for a 30-year mortgage -- Herb Tousley, Director of Real Estate at the University of St. Thomas says it's no surprise plenty of people are anxious to purchase.

"If we really start to see the economy take off we could see interest rates go up a little bit," Tousley said. "I don't think we are going to see them go up a lot. I don't think they want to choke off any recovery, and even if they go up a little bit, they are still historically low. I don't think if they went up a little bit it would have a huge negative impact on the market."

According to the Minneapolis Area Association of Realtors, closed-home sales across Minneapolis and St. Paul ended 2014 at the second-highest level since 2005. Plus, even though the active supply of homes fell to a 12-year low, home buyers had more choices during the critical spring and summer selling season.

If history repeats itself, as many expect, agents could see similar spring bidding wars.

"It was crazy fun for a real estate agent," real estate agent Dayna Murray said, "And we were getting multiple offers on everything, and there were multiple offers on everything because there was no inventory, and the buyers were just scrambling."

Murray cautions waiting too long for that spring flood, because serious buyers are ready.

Tousley expects median sale prices to increase at a moderate rate in 2015, about 5 percent, while short sales and foreclosures are expected to drop for the third year to about 10 percent. Both are healthy signs of the economy improving.

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