The year is half over, which makes it the perfect time to look at what’s happening in the Minnesota real estate market right now. And also to look at what has happened in the first half of the year for homeowners living in Minnesota as well as what you can expect to happen now in the last half of the year. There are always several different elements that are used to predict trends in the market, like inventory in the most popular Minneapolis neighborhoods.
Twin Cities July Real Estate Inventory
Home inventory in the Twin Cities market increased by more than 50% between January and June of 2022. 50.9% to be exact, which is a significant increase from the year before when inventory rose 38.8%. The increase in inventory has relieved some of the pressure on the market which gives buyers a little breathing room when they’re making decisions about which home they want to make an offer on. With more homes to choose from buyers aren’t being pressure to get offers in immediately or lose their chance at a home.
Pending Vs. Active
In the Twin Cities there’s been a big shift in the pending vs. active numbers. The last couple of years have been extremely strong seller’s markets, which was shown in the pending vs. active numbers. Houses were going under contract and becoming pending so quickly that buyers were scrambling to find homes that were active. Whenever there’s a higher percentage of listings that are pending vs. active the market is going to be tilted in favor of sellers.
But in the first half of the year those two numbers are starting to even out. That means that the hike in interest rates along with other factors are having an impact on the housing market. It’s still a strong seller’s market but the frenzied pace of sales has slowed, making it easier for buyers to find a home.
Minnesota is a great place to live.
Changes Ahead, But Not Extreme Ones
Interest rates going up have changed the Twin Cities real estate market and will continue to impact the market in the last half of the year. But, not as much as buyers might hope. It’s still going to be a seller’s market but sellers won’t be able to get the inflated prices they’ve been able to get the last couple of years. There is enough inventory on the market to give buyers the time to see several homes and decide which one they want to make an offer on instead of having to put in offers immediately on multiple homes because the homes were selling so fast.
Sellers whose homes are in prime locations or have upgraded finishes and amenities may still see offers that are thousands over asking but the average median price for a home in the Twin Cities will be coming down in the next few months. That’s partly due to market factors like higher interest rates and partly due to the time of year. July and August are the busiest selling months. As the fall arrives, kids go back to school, and people are thinking about the holidays fewer people will be shopping for homes.
Buyers Still Shouldn’t Wait
Should buyers wait for home prices to drop before buying that new home in the Twin Cities? The short answer to that is no. Even though prices for new homes will be coming down over the next few months interest rates may continue going up. Interest rates continue to go up to try and bring down inflation, and there’s no guarantee that they won’t go up more as the holidays get closer.
If you’ve been thinking about moving to Minnesota now is the time to do it. Even though buyers may pay a little more for a new home now than they would in a few month saving tens of thousands of dollars on interest by locking in a mortgage at the current interest rate is a much better deal in the long run.
Getting ready to buy a home? Wondering what are the best places to live in Minnesota? Download my current home buying guide for free and let me help you find your perfect Twin Cities home. Contact me today!