MINNEAPOLIS (KMSP) - Housing prices in the Twin Cities are at an all-time high, according to new research from the University of St. Thomas, making it a great market for sellers and a frustrating one for buyers as inventory nears an all time low.
It's a combination that's hitting first-time homebuyers especially hard, with new home construction nowhere near its pre-recession levels. Experts say that's largely due to the current high cost of land, labor and materials.
"You’re going to have to have some patience and it’s going to be a process [if you want to buy a house]," said Jay Ettinger, who's been a Twin Cities Realtor for nearly 20 years. "A long process potentially."
As much as the market has frustrated buyers, it's also been a major source of wealth creation for Twin Cities' homeowners. Since 2012, the median home sale price in Minneapolis and St. Paul has gone up by $82,300--a gain of 43.8 percent in just over six years.
“A lot of those people who have a house to sell aren’t selling, and that adds to the problem,” said Ettinger. “They’re hearing the horror stories from buyers and it’s scaring them off from pulling the trigger.”
Meanwhile, most buyers want "turn-key" or "move-in ready" houses, which lowers the number of houses available for purchase even further.
Ettinger advises new home buyers to be patient, and know their budget before shopping. In addition, he says it's just as important to hire a team you trust.
"You need to find a real estate agent that’s literally going to hold your hand through the process and look out for you short term and long term," he said. “You want to make sure the people on your side are on your side and not looking out for themselves. What’s best for you is most important."