Real estate in Minnesota is expected to remain a sellers’ market into 2019, despite rising interest rates and increased inventory. The median sales price in the Twin Cities continues to trend towards $300,000, making it still challenging for first time homebuyers.
After several years of historically low interest rates, homebuyers may perceive 5-6 percent interest rates as unaffordable, causing them to hesitate to purchase a home, especially coupled with increased housing prices. Buyers will take their time and be less willing to make an offer on just any home in their price range.
Expectations that the Minnesota market may continue to balance in 2019 are due to:
- Rising interest rates that will price some buyers out of the market
- Waning buyer demand due to continued lack of inventory
- Builders will start building more affordable homes in the suburbs and rural areas
- Construction of market to luxury rate apartments will provide options to first time buyers who are priced out of the market and for homeowners who sell before they find a home to buy.
The Minnesota economy is strong which will contribute to housing remaining affordable. The 2019 predictions for the Twin Cities are:
- Average Market time to remain like 2018’s 35 Days,
- Average Sales Price will continue to increase — 2018 median price increased 7.60%,
- And increased inventory due to pent up demand of sellers wanting to sell.
Source: RE/MAX Integra Midwest – Regional Office