When is the Next Crash?
Recently, I've begun to see a pattern: people from the East and West coasts are inquiring about property in Minneapolis and making the move here. What I think is happening is that they are hedging against economic uncertainty by finding a safe place to invest their cash - right in our city. We have great schools, great parks, and so much to offer, not to mention that real estate on the coasts has become enormously expensive.
So what happens when you have an influx of interested buyers? You have a demand boom. With the growing population, I think Minneapolis land prices are going to go through the roof. There will be ups and downs over the next 70 years, but without a doubt land prices are going to be 10 times higher than they are right now.
I think the market is seeing this pattern very clearly, which is why there is only one month's supply of homes currently available for sale. How long is it going to take for the prices to rise? I really don't know, but what I do know is that it's important to prepare for that change, whatever and whenever that may be.
It's easy to plan for when things go right and life is good. But life throws us curveballs. What if the value of the dollar drops because nobody buys bonds anymore? What if the paper becomes backed by gold? How does that affect real estate prices? What if we go to war, or there is a nuclear bomb? What if the stock market crashes? What will happen if our currency crashes? What will happen if our government defaults on debt?
I'm hoping none of those things ever happen, but it's good to think about the effects so you can adequately prepare your investments to meet your needs. Minneapolis has become a hot spot for real estate, and the trends show that it's going to keep getting hotter. So if you're looking for a home to purchase, make sure to consider your long term plan and what you'll need for the future.