28 Oct Our Minnesota weekly real estate update

Our Minnesota weekly real estate update

This is our Minnesota real estate weekly update for October 28th, 2022. We are experiencing a new Minnesota real estate market. The rates are increasing and that has forced a number of buyers out of the market. Inflation is too high, and this will continue to impact interest rates in the near future.

We review real estate facts and future trends

The trends

We are now in a more neutral selling market (neither a buyer nor seller’s market). So, what does that mean to you? You will start to see buyers coming in with offers contingent on them selling their home. A listing agent that has a comprehensive marketing plan is important. And you should strongly consider working with an experienced real estate agent to give you an edge in buying also. Experience is priceless!

The facts

Here are the current facts for our Minnesota real estate market. Our current housing affordability Index for Minnesota real estate for September was 104, and this compares to 140 this same time last year. 100 is the lowest ever recorded. The higher the number means the greater home buying affordability in the Twin Cities. Our current inventory of homes for sale is 9,071. In comparison, we had 8,724 in 2021. So, the inventory of homes for sale is up 4% from last year. A point of interest, in 2009 at the time of our first real estate correction in Minnesota in 40 years, we had over 36,000 homes for sale in the seven county Minneapolis/St. Paul metro area. Minnesota real estate pending sales for the last week, which have sold but not yet closed, was 835. That compares to 1,331 pending home sales last year. That is a decrease of 37.3% from the same week last year (wow!). An average real estate market would have a three-month supply of housing inventory and we have 1.9 months. Last year it was a 1.6 months’ supply.

More facts

Minnesota seller’s benefit financially when real estate values rise. The median sales price (September) increased by 6.3% since this time last year. $362,050 is now the median sales price in the Twin Cities area. A market health indicator is the comparison of our sales price to original list price. For September, the average sale to list price was 98.9%. And that compares to 101.2 % in 2021. That number will adjust downward as we get October figures. For even more Minnesota real estate market information visit my website at https://www.mnrealestate.com/twin-cities-information/area-appreciation-rates/. It features a comprehensive review of our Minnesota real estate market for those that like all the data!

Our current interest rates in the Twin Cities

The low interest rates had been a catalyst for buying power for buyers the last two years, but rates have more than doubled this year. These interest rate increases are designed to reduce the rise of inflation, but they will also impact what buyers can afford. Rates are about the same from last week. Rates for lender paid closing costs are 6.767% for VA, 6.715% for FHA and 7.458% for conventional. Rates for borrower paid are 5.875% for VA and FHA is 5.875% and 6.5% for Conventional. Just reach out to me if you need contact information of a lender with those interest rates.

My opinion of the future of Minnesota real estate

I have experienced different real estate markets in over 30 years of real estate and supply and demand continue to control our market. With inflation forcing the Federal Reserve to raise interest rates we do not have rate increases in our rearview mirror yet. This is having a negative effect on the market and what buyers can afford. As a result, buyers may decide to rent instead of buying for the short term. We are quickly moving into a neutral real estate market.

This is a suitable time to discuss your housing needs for 2022!

Your house and neighborhood in our MN real estate market

We find that price ranges and neighborhoods have its own specific trends and facts. In so if you are interested in knowing the specifics for your home…just call Jeff.

Jeff Anderson

The Anderson Team

www.mnrealestate.com

RE/MAX RESULTS

612-386-8600