The state’s housing market will largely remain a sellers’ market.
The median sales price in Minnesota increased 6.1 percent from January through October of 2018 to $277,059 compared to the same time period last year, according to data provided by the Minnesota Association of REALTORS®. The median sales price in the Twin Cities region increased 7.6 percent to $270,000 compared to the same time period last year.
“We are seeing what is being called a tale of two markets. People who wanted to purchase homes in primary markets or large cities are moving outside to tertiary markets and smaller towns, which has put a huge amount of pressure on those markets, causing prices to rise. However, we are seeing a bit of a stall in some primary markets because home buyers are pushing back on urban prices and choosing tertiary markets to get more home for their dollar,” said Fiona Petrie, vice president and managing director for RE/MAX INTEGRA US operations. “Homes in Minnesota are overall affordable and the outlook for housing in 2020 is strong. Experts predict we may see a general economic slowdown, but that won’t happen until late 2019 or 2020. But real estate is not the protagonist. Buying a home will remain the most stable investment a buyer can make today and into the future.”
There are several reasons why the Minnesota market may begin to balance in 2020 in addition to interest rates:
- Waning buyer demand due to prolonged lack of inventory
- Builders in suburbs and rural areas building more affordable homes
- More millennials and homeowners who sell before they find their next home are renting in market-to-luxury rate apartments
Brokers added that home prices are increasing at a much slower pace than this time last year, which may cause the market to start to balance out in some parts of the state.
I hope this was helpful.
- David Gruis/ Home Heritage Holdings LLC