You've been searching for a home for the past few years. You've gotten into countless bidding wars only to lose out each time. And now you're not sure if you can even afford to buy a house anymore.
Or maybe you decided to sell your home after seeing other houses on your block sell for thousands over the asking price. But now your house is sitting on the market. Where are all the buyers?
Whether you're buying or selling, it's clear that the real estate market has changed over the past year. Minnesota real estate is no exception. Keep reading to learn more about trends you can expect to see in 2023.
Minnesota Real Estate Trends
After the real estate boom in 2021 and 2022, the market is starting to slow down. Some say we may even be headed for a crash. But this isn't necessarily the case for the Minnesota real estate market.
Minnesota's housing market has slowed down, but it's still more stable than other areas of the country. Below is what to expect for local trends in 2023.
The Federal Reserve started raising interest rates in 2022 to curb inflation and more increases are expected in 2023. As interest rates increase, so will monthly mortgage payments. This impacts buying power, especially for first-time homebuyers.
Higher interest rates are also convincing homeowners to stay put. Rather than leaving their current low-rate mortgage, many homeowners are choosing to remodel.
Even though the market is slowing down, the average home value in Minnesota continues to increase. This shows that the housing market is still healthy and stable. Buyers can expect to find many properties available at various price points.
While average home value across the state is increasing, this isn't the case across the board. Home values in the Minneapolis area are starting to decline. Home values around Duluth and Rochester are projected to continue increasing.
The inventory of available homes remains low. Minnesota is still in a seller's market, so buyers can still expect higher prices and bidding wars. But due to declining home values, Minnesota will start to lean toward a buyer's market in 2023.
Minnesota Real Estate Forecast
It's expected that the trends listed above will continue throughout 2023 and for the next few years. Mortgage rates will continue to increase in 2023, but may stabilize soon after. Until that happens, inventory will stay low and home prices won't drop.
Some sellers who have been hesitant to put their house on the market may give in soon, increasing the housing supply. A modest increase in inventory may lead to a balanced market rather than one that favors buyers or sellers.
Minnesota Real Estate in 2023
The Minnesota real estate landscape looks very different in 2023 than it did a year ago. Increasing mortgage rates and home prices will cause many potential buyers to reconsider.
If you're planning to buy a home in 2023, we can help. Our experienced team of real estate agents can help guide you through the process. We also offer property management services for those looking for an investment property.
Contact us today to let us know how we can help!