Here’s what you need to know about our local housing market.

With so much media hype about the real estate market, we understand it can cause a lot of uncertainty and fear. This video is all about what we actually saw in our local market in 2022, and we'll dig into predictions for 2023.

The media is actively publishing crazy headlines designed to scare you and get you to click on them. If you actually read the article behind these headlines, you'll see the information is not as frightening as it seems. First, we have strong buyer demand that continues to drive home values up. The crazy buyer demand we saw at the beginning of 2022 gave people unrealistic expectations. 

However, once mortgage rates started increasing, demand began to fall. That led to a slowing of activity in our local market as buyers and sellers became fearful of what to expect. Uncertainty and doubt spread quickly as national headlines spoke of market crashes, continued rate increases, and decreasing supplies of goods throughout the nation. 

In the last quarter of 2022, we saw some price adjustments. This was the beginning of a more normal housing market in our area, with a continued shortage of housing inventory. Homes priced correctly and in good condition still sold quickly and even saw multiple-offer situations.

“You can still get top dollar and receive multiple offers in this market.”

To conclude, there were many changes to the housing market in 2022, including interest rate increases, fears of the unknown, and a normalization of our Minnesota housing market. Moving forward, experts agree, it's still going to be all about inflation. If inflation is high, mortgage rates will be high as well, but as inflation continues to fall, mortgage rates will likely respond.

There are still looming questions from consumers like, “Will the market crash?” There just isn't enough inventory on the market for home prices to come crashing down as they did in 2008, even though some overheated markets like California and Arizona may experience slight declines. Another question we're hearing is, “What's happening with mortgage rates?” To ease inflation, the Federal Reserve is taking steps to try to tame inflation by slowing the economy, and those decisions are having an impact on mortgage rates.

Until that's under control, rates will continue to respond to inflation. If inflation eases, rates may as well. Home appreciation is cooling as well; however, not as drastically in our local market areas as in major cities on the East and West Coasts.

If you’ve been paying attention to the media, you’ve probably received some mixed messages. Don’t hesitate to call or email us with any questions. We’d be more than happy to speak with you!