Are we in a local "bubble" here in Rochester MN and the surrounding area or will real estate prices continue to rise with a favorable Destination Medical Center (DMC) outlook and positive economic news? If you have been watching the Rochester and surrounding area housing market at all, you know that values are increasing by leaps and bounds! However, once we get outside of the commuting distance to Rochester, real estate valuations are, in many cases, growing at a much slower pace. Just a few short years ago prices had bottomed out and foreclosures were easy to come by at bargain basement prices. What a difference a few years makes as sellers are often getting as much as 30%+ above their purchase price just a few short years ago. Many sellers are finding multiple offers come their way. On the other hand, buyers in SE Minnesota are now finding it necessary to spend more on the same home than even a year or two ago, with many homes in high enough demand that we see buyers bidding up prices above the listing price. Yet, with limited options, purchasing a home in SE Minnesota now is still the best bet for both first-time home buyers and move-up buyers. My lender friends tell me that interest rates look to be increasing. A combination of future rising interest rates and home prices and, high rental rates screams, "buy as soon as you can" to this Real Estate Agent. True, increasing rates may effect soaring home prices but would they actually bring prices down from where they sit right now? Not likely. Only time will tell if we are currently in real estate bubble in the Rochester and surrounding area but, with the way things look at this time, as evidenced by the economic growth outlook and high growth of new construction, prices for home buyers look to be on the increase, although at likely a lower rate, for quite some time to come.