I am certainly not a prophet – not even a Punxsutawney Phil (whose big day is coming again soon) – but since anyone who reads this will undoubtably soon forget what is written here, I will go out on a limb and predict a very good year for Iron Range Real Estate in 2018. Before explaining why this good year is going to happen, let’s agree on what that means – A good year in real estate terms is a period where prices are strong enough that sellers can afford to sell, yet not so high that homes are out of reach for the average buyer. And a good year is one that has plenty of buyers actively in the market, but not so many that competition drives prices to unsustainable levels.
So why are we going to have this “good year” in northeastern Minnesota in 2018? There are four major reasons for optimism….
1) Activity is off to a very strong start. The Range MLS has already seen 25 residential properties sold and closed since January 1. And there are an additional 61 residential properties currently pending as of today across the Range.Our office is seeing solid offers coming in almost daily and our agents here at Johnson Hometown Realty are very busy with buyers in a variety of price ranges. While our local market can change rather abruptly, over the years we have seen that when activity starts early, it is often maintained.
2) Our inventory is about right. There are currently 428 residential listings in the Range MLS, 77 of them in Hibbing, 28 more in Chisholm, and 50 in Virginia. Those numbers vary from day to day, and they may not mean much to the average consumer, but they are about right as far as supply and demand are concerned for our area.
3) Interest rates on home loans remain historically incredibly low. We have been saying that for a number of years now, and rates have been slowly creeping up a little bit over the last few months, but right now you can borrow money in the low 4% range and that is a fantastic rate to lock in at.
4) Most importantly, our local economy is very strong. Everyone knows we are tied at the hip to the mining industry, and right now the mines are all up and running. There are no rumors (today, at least) of strikes or lay offs or shut downs. There is even new mining activity around the edges – The former Essar project has a pulse, the former Magnetation enterprise is apparently back in the game. Even Polymet appears to be gaining traction and Mesabi Nugget, while on life support, seems to have some hope of going forward. All of this mining news leads to things like the big expansion recently announced at L and M Radiator and drives hiring in other mining-related companies. This environment provides jobs and good wages as well as hope and faith in the future which impacts home sales, lakeshore purchases and the buying of recreational property.
So there you have it, my prediction for a very good 2018 for the Iron Range as far as real estate is concerned. I may not be Nostradamus, but I am also not Al Gore. I never predicted Florida would be under water by 2015…..