Twin Cities home sales slid in November

  • Article by: Steve Alexander , Star Tribune
  • Updated: December 11, 2013 - 8:53 PM

Despite the slowdown, the $195,000 median home selling price in the Twin Cities held steady, and was up 13 percent from a year ago.

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sek2undrstndDec. 11, 13 8:33 PM

This will be an interesting time in the real estate business. As the economy improves, the Fed will cut back on QE which will force interest rates higher. Higher interest rates typical exert downward pressure on home prices. The reduced inventory will increase the competition for homes and that may override the pressure exerted by interest rates. However, as interest rates rise and house prices rise or maintain their level, mortgage payments will increase which will take a bigger chunk out of disposable income. With less money to spend, the economy will falter. How much and when all of this will happen remains to be seen but it will be interesting. Might be a good study for an economics major.

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theagonybhoDec. 12, 13 8:46 AM

sek2undrstnd, i couldnt agree more once the feds cut back or stop the stimulous the economy will slow and housing bubble number 2 is just around the bend.

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elcid1Dec. 22, 13 7:15 AM

The problem; interest rates have been kept artificially low for a long time now. In other words, we have a bond bubble. That means the whole economy is being artificially stimulated, including housing prices. As rates go back to normalized levels expect flat to downward pressure on housing prices relative to median incomes. We won't likely see rising housing prices accompanied by high unemployment and falling real incomes. We are probably moving into another housing bubble right now.

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