Twin Cities Real Estate Market 2023

The Twin Cities Real Estate Market in 2023: Trends and Insights

As we move into the second half of 2023, the Twin Cities real estate market continues to exhibit resilience and stability, defying earlier gloomy predictions. While sales have slowed compared to the frenetic pace of 2020-2022, the local market remains vibrant, with stable prices and strong buyer demand. In this update, we delve into the key factors influencing the Twin Cities real estate landscape and what they mean for buyers and sellers.

• Stable Prices
  Despite fluctuations in the national real estate scene, the Twin Cities region holds its ground. The diversity of industries in the area contributes to strong employment, shielding our local market from severe fluctuations.

  From a national perspective, over 68% of homeowners in the United States have at least 50% equity in their homes, which bodes well for the residential real estate market’s stability overall

• Varied Home Prices and Location Impact
  

  Local home prices have been interesting this year. More than ever prices vary based on location and housing type. Here are the median sale prices in the Twin Cities over the past year based on property type – condo, townhouse, and single-family:

  Townhomes – $295,000
  7.2% increase

  Condos – $200,000
  2% increase

  Single-Family homes – $400,000
  3.9% increase

  Location is a significant variable affecting median sale prices around the Twin Cities as seen here:

  Edina – $580,000
  0.9% decrease

  Shakopee – $395,000
  9.7% increase

  Maple Grove – $391,000
  1.6% increase

  As you can see, it is hard to generalize the local market because of the variables.

• Supply and Demand Dynamics
  

  There has been a substantial decrease in new listings this year which has resulted in a decrease in sales. Through June there have been 26% fewer closed real estate sales; that is a significant decrease! Some of this can be attributed to increased interest rates, which has caused some buyers to take a break from home searching. However, the bigger factor is the lack of new listings; there have been 20% fewer homes listed this year compared to last. This has presented challenges for buyers, especially those competing in the most active areas. We believe the shortage of new listings, coupled with high buyer demand, has benefited home sellers by keeping prices stable.

  

• Mortgage Interest Rates and Market Outlook
  

  Lastly, mortgage interest rates have been teetering between 6.5%-7.25% for months. The most recent data indicates that rates will remain in this range through the remainder of 2023. Gone are the days of the 3% mortgage; we doubt we will experience rates that low for many years. While mortgage rates in the 7% range seem high, they are lower than the 50-year average which is 7.76%.

  What happens next with interest rates is anyone’s guess. The local real estate market will slow considerably if rates exceed 7.5%, which is possible. On the other hand, sales would see a significant boost if rates decreased to 6.5%. We will be watching and listening closely to the Federal Reserve these next weeks and months to be ready for whatever direction the rates trend.

• In Summary

  Overall, the Twin Cities residential market is in good shape. It is not an extreme seller’s market, but in some instances, we are still experiencing multiple offers with buyers offering high prices and making concessions. Most properties are still selling for list price; the average seller has received 99.3% of the asking price, compared to 101% a year ago. However, the pace and intensity of competition among buyers have diminished, allowing buyers more time to make decisions. As mentioned earlier, market conditions vary greatly.

At Fazendin Realtors, we take pride in keeping our clients informed whether they are in the market to purchase a home or not. A home is not only a place to live but also a significant investment. From that perspective, our goal is to keep clients informed about the market dynamics that influence the value of their homes.

We know that every client is unique, and we strive to customize our services and marketing to fit each individual’s needs. For personalized insights into market conditions in your desired area, don’t hesitate to reach out. Whether you’re a potential buyer, seller, or simply curious, we’re here to provide you with tailored information and exceptional real estate services.

Explore the Twin Cities real estate market with Fazendin Realtors today. Contact us for expert guidance and insights into your real estate journey.