REAL ESTATE: Low supply, high demand makes for sellers' market - FOX 10 News | myfoxphoenix.com

REAL ESTATE: Low supply, high demand makes for sellers' market

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Even with the snow and ice making travel sluggish, the Parade of Homes drew plenty of people out to see what the Twin Cities housing market has to offer. Right now, that's a steadily-paced seller's market.

The real estate climate has been fair in the metro, and housing analysts expect growth to continue from last year at a steadier, more moderate pace because supply is low and demand is high in choice neighborhoods.

Whether it's an old home or a new home, there's a seller's market in Minneapolis, where a 98-year-old Dutch colonial rests off the corner of Fremont Avenue, just a few blocks away from Lake Harriet in the Lynnhurst neighborhood.

"It's around 2,000 square feet. It's got a walk-out basement," said Steve Schlesinger. "It's easy access to just about everything."

Schlesinger and his wife, Nancy, are selling the home. Even though the winter white hasn't loosened its grip on the property, they believe the prime location will get them their asking price.

Home prices rose an average of 13 percent in the Twin Cities in 2013, and with fewer foreclosures dragging down costs, Herb Tousley told Fox 9 News he expects the recovery will continue even if it doesn't match the same scorching pace.

"We'll see an increase in the 4-6 percent range, which is actually healthier," Tousley, director of real estate programs at the University of St. Thomas, predicted.

According to Tousley, a long and sustainable increase could help avoid a housing bubble.

Tousley estimates the average median home price will be around $210,000; however, he added that the housing supply is still low.

"There are so few homes on the market," he said. "Last spring and summer, you saw people bidding homes up -- and you'll still see that in good areas."

Some of the hottest real estate spots include:

- Powderhorn

- Nokomis

- Longfellow

The condo market in downtown St. Paul and Minneapolis is also seeing a resurgence, but some realtors say the communities outside of the first-ring suburbs may not enjoy the same prosperity since many people are trying to stay close to the cities.

Homebuilder Matt Hanish says million-dollar homes like those in Edina are also back in style with house hunters looking to upgrade to a newer home; however, even the nearly century-old home in Lynnhurst is still drawing a steady stream of possible competitors.

"The minute you see one you like, jump on it and don't wait," Katie Abrams said.

Housing analysts believe there are only two things that could stop the recovery in the metro -- a dramatic rise in interest rates and a tanking economy. As for the lack of inventory, realtors believe more homes will hit the market in May and June.

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