Housing Supply Predicted to Continue in 2017

This article originally appeared on the Star Tribune’s website on January 20th and was written by Nicole Norfleet. It can be viewed in its original context here. 

With homes still in limited supply and buyers’ demand not wavering, signs continue to point to a tighter Twin Cities housing market.

Median sale prices for homes are predicted to rise 5 percent this year, according to a forecast released Friday by the Shenehon Center for Real Estate at the University of St. Thomas’ Opus College of Business.

“The historically low supply of homes, which has been most acute since mid-2015, will continue to fuel the median sale price increase throughout the coming year,” said Herb Tousley, director of real estate programs at the university.

The analysis echoes other predictions. CoreLogic has estimated that, from November 2016 to November 2017, home prices in the Twin Cities will rise 5.8 percent. Nationally, home sales are expected to increase 2 percent this year, according to the National Association of Realtors.

Tousley said that in 2017 he expects about the same amount of homes to be sold as last year, when about 60,000 houses sold. More new homes will be built to help bring the amount of available housing to more normal levels, he said.

Before the housing market crash, more than 20,000 homes typically were available for sale at any given time in the Twin Cities, but the number has significantly dropped in recent years. In 2016, from 11,000 to 15,000 homes were available. This year, Tousley expects the range to be from 12,000 to 16,000.