No, we don’t have a balanced market yet, but the mad-scramble days of multiple offers on listings appear to be over, according to those in the real estate market.
Minneapolis Area Realtors President Jerry Moscowitz says while there’s still a healthy amount of buyer demand, potential sellers are a bit more reluctant these days.
“The reason might really just come down to the fact, [potential sellers] refinanced their homes, they’re sitting at a 3.5% mortgage, and now if they go and that mortgage is somewhere around six or the low sixes, that might be something they have a tough time trading,” Moscowitz said.
Industry figures for January show the rate of price growth has slowed, the number of days on the market has increased, and listings are down more than 10% over last year.
But sellers don’t have all the power, as he says would-be-buyers aren’t taking homes “as they are,” as they might have 12 months ago.
“[Sellers] need to have their property in a little bit better shape,” Moscowitz said. “They had deferred maintenance that maybe they were able to get by with a little bit easier in the past because you had buyers that really just wanted to get into a house and were maybe willing to take deal with things that weren’t perfect. Now, with the rise in interest rates, they are sometimes a little bit pickier.”
Moscowitz says that despite what feels like a slowdown, the market is actually normalizing itself, and he still expects a robust spring market as the weather improves.
New data backs up what Moscowitz is saying, as the Minneapolis Area Realtors and the Saint Paul Area Association of Realtors shared in a press release that the price growth for Twin Cities homes matched historic norms, raising 2.7% to just under $342,000.
The 2.7% increase comes after three straight years of almost 10% increase in year-over-year price growth, the groups shared.
“Anyone concerned about runaway home prices should be comforted by the more typical price growth we’re seeing, which gives buyers a chance to catch their breath and incomes a chance to catch up,” Brianne Lawrence, President of the Saint Paul Area Association of Realtors said in a statement. “While the Twin Cities remains a seller’s market, homes are taking longer to sell and sellers are accepting less than their list price.”
The data showed that buyer activity has fallen by 19.3%, with 2,560 sales currently pending, and sellers listing has also dropped, with 10.6% fewer homes being listed compared to January last year. Nonetheless, Moscowitz maintains that the market is still less volatile than it has been this decade.
“Sellers need to be priced right and may not see a dozen plus offers immediately, but most sellers are getting deals done with terms they’re comfortable with, and still more quickly than in the past,” Moscowitz said in the statement.
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