What’s in Store?

In keeping with my patented formula for predicting future housing prices — extrapolate current trends — herewith is my forecast for the second half of 2011:

–Continued, record-low mortgage and interest rates;

–Brisk demand for affordable, updated homes in high-demand Twin Cities neighborhoods (think, Linden Hills, Morningside, Fern Hill, Tyrol Hills, etc.);

–Anemic demand for upper bracket (> $1.5 million) properties, especially larger ones needing significant updating;

–Increased tightening in the Twin Cities rental market, where vacancy rates are only 3% and falling.

–More working off of lender-mediated inventory (short sales and foreclosures).

The big variables to watch?

What — if anything — succeeds QE II; any legislative progress to resolve Fannie Mae and Freddie Mac; and how the U.S. debt ceiling standoff plays out — specifically, whether the resolution involves paring back housing incentives/tax breaks such as the mortgage interest deduction.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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