Twin Cities Housing Market Outlook for 2007

I am often asked the question, "how's the housing market doing?" My short answer is that the Twin Cities market started to cool about June of 2005 and has remained fairly stagnant since then. The result has been increased inventory of homes for sale, longer times on market, Seller anxiety leading to price reductions and Buyer bargain-hunting. There are still Buyers and Sellers, but the overall volume of transactions has cooled considerably from the feverish pace of 2001-2004. One cause, in this writer's opinion (I love blogging!), is that the stock market has been on such a roll that there has been little incentive to cash out and put the money into real estate. As the stock market cools, as it has been known to do from time to time (that's a slight jab for my financial planner - sorry, Tony!), stock investors will move their investments out of stocks, sell their homes and move up (or buy a second home, a vacation spot, a retirement home, or perhaps one of each).

So . . . what's the future look like? Jeff Allen, staffer for the Minneapolis Area Association of Realtors, stated in the January/February edition of The Realtor, "The first half of 2007 should see an extension of current conditions before buyers begin to reawaken later in the year. The rebound will be gradual enough, faint enough in its inception and occur late enough in the year that the net sales activity for 2007 will hold relatively stable with 2006. But the seeds of recovery will be sown, and the market should show solid buyer gains in 2008."

This is just one opinion, of course, but it gives us some insight from folks that monitor these issues on a daily basis. I'll keep you posted as I gather more expert opinions - and probably offer a few of my own along the way.