Here’s what low housing inventory means for the future of our market.

Today, I would like to discuss the real estate market and whether we are experiencing an inventory problem or an interest rate problem. Over the past year, the topic of interest rates has been on everyone's mind. Rates have doubled, currently sitting at 6.75% for those with a decent credit score in a conventional loan. Government products like FHA and VA have slightly lower rates at six and a half percent. The high rates have led to the question of whether we have an interest rate problem or an inventory problem.

From my experience, I believe we have an inventory problem. The supply and demand in the market are so far apart that almost every house in every micro-market is in multiple offers, regardless of the price point, except for foreclosures, distressed properties, and multimillion-dollar properties.

“There’s a lot of room for creativity in

this market.”

Buyers are starting to realize that this rate environment is unlikely to change significantly. While we have rates that exceed 7% for bad credit, we only have 700,000 homes for sale in America, and in Hennepin County, which comprises Minneapolis and the surrounding suburbs, we only have a thousand homes for sale. Until we see inventory change, I don't think supply and demand will change because it is historically low at this point.

If you know anyone looking to buy or sell a property, I would love to chat. We can do a lot of things with buyers and sellers off-market due to the significant difference in buyers versus sellers. Last year, 6.2 million homes were sold in America, while this year, it is expected that only four million homes will sell.

Call or email me with any questions. I look forward to hearing from you!