Housing report

Housing report shows higher prices despite market cooling

Minnesota Realtors released their latest housing report and it shows the market may be slowing slightly.

Pending sales fell 16.6% in June compared to the same month in 2021. Completed sales also fell 13.7% during this period.

“2021 was the best year ever for sales, so we knew this year was going to be like that, and as interest rates started to rise, we also knew it was going to slow down,” said Chris Galler , CEO of Minnesota. Real estate agents.

The average 30-year fixed mortgage rate has risen from around 3% at the start of the year to around 5.5%. This increase affects what buyers can afford.

“Now they don’t look at Cadillacs,” Galler said. “They have to readjust their priorities.”

RELATED: Rising Interest Rates Complicate an Already Competitive Housing Market

St. Paul landlord Mary Olsen told 5 EYEWITNESS NEWS that higher rates were a factor as she and her husband figure out their budget for a new home. The couple recently bought a house near the beach at Lac Sainte-Croix.

“We were at a 3.2 interest rate, and there was no way to get it again, Olsen said. “We came in at 5.75, but that factors in when you think about payouts.”

They are closing their new home on Tuesday.

“If you really want to buy now, I would make sure you sell first,” Olsen said. “We knew in advance, when entering, what our plan was and what our landline number was. [of what] we would go.

The sale of their current home will also be finalized on Tuesday. Olsen worked with Dunn Realty Group to sell their St. Paul property, and they received several offers.

“They listed and we sold in about a week,” said Olsen, who said she and her husband sold their home above the asking price. “We priced quite aggressively, not as much as six months ago, but it worked out really well.”

According to the Minnesota Realtors report, the median sale price increased by approximately $20,000 from June 2021 to June 2022. It rose from $325,000 to $345,000.

Galler explained that there are still only about six weeks of housing available statewide. A healthy market would be a 12-16 week supply.

“We’re probably talking 24 to 48 months until we get back to a normalized market,” Galler said. “Last year was a banner year, and the year before that was a banner year.”

As the market slows slightly, it encourages potential buyers to take another look at what’s on the market.

“There are more opportunities now than six months ago, a year ago, two years ago,” Galler said. “Go out and look again. Understand that interest rates have increased so you may not be looking at the same product as before and there are still several offers going on.

For sellers, he recommends patience.

“It’s not going to sell out in a week,” he said. “It’s going to take a few weeks, you’re going to have to be competitive, you’re going to have to get your property in top shape.”