27 Oct Will home values fall in Minnesota
Will home values fall in Minnesota?
The Federal Reserve has dramatically raised interest rates over 2022 in the hopes of reducing inflation. Rates have more than doubled in that brief time and it has had a chilling effect on real estate sales. In many areas of the country were appreciation hit more than 30 percent they will see the biggest change in values.
What will happen in Minnesota? We peaked at 10 percent year over year appreciation in April and now we are at 6.3 percent. Our inventory of homes is within 4 percent of last year and sales are down 27.9 percent on a last three-month average. We had no where near the needed amount of inventory this spring for all the buyers in the market, now we have less buyers in the market and we are moving out of a seller’s real estate market.
The next 6 months I predict we will have a neutral real estate market with more price reduction on those listings that the sellers where overly aggressive on pricing. I expect the buyer will be able to negotiate for closing costs or price in many instances.
Look for a year-end appreciation of 4-5 percent for Minnesota real estate and next year for a 2-4 percent appreciation. We will not experience the big ups and downs of other areas of the country. It is a supply and demand issue so look for safe, consistent growth in values in Minnesota.
I hope you found my blog on “Will home values fall in Minnesota?” helpful. Look for more blogs on all aspects of Minnesota, real estate, and the world around us.
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The Anderson Team