Housing Market Report - January 2023

Dated: February 1 2023

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Housing Market Report - January 2023


Watch the video or read about it here>


"It’s winter, the Holidays are over and you’re starting to settle back into “normal” life…

WAIT!

That means you’re either looking to buy a house or sell one and we’ve got some important information you need to know to help guide you to make the right decisions.

According to the National Association of Realtors, Mortgage rates have stabilized around the 6% mark for the last few weeks. The beginning of the new year allows people to start over again and set their resolutions for the year. One of those resolutions may be buying a home.

This downward trend of mortgage rates gives a scrap of hope for many home buyers for the months ahead. With a 6% rate instead of 7%, buyers pay about $2,700 less every year on their mortgage. As a result, owning a home becomes affordable to about 1.4 million more renters and 4.3 million more homeowners. This could bring more buyers back to the market, boosting demand for housing and increasing market competition.

Now, it’s not just affordability that’s a roadblock. There’s also a persistent shortage of homes. Historically, a 6-month supply is necessary for a normal market with enough homes available for active buyers. However, there’s a 3-month supply of homes at the current sales pace. Even with 1.1 million homes available for sale, buyers may still have difficulty finding a home to purchase.

Let’s take a look at our local market…

The Rochester, Minnesota area has seen a decrease in the number of new homes hitting the market by just under 8% year-to-date and over a 33% decrease month-over month in December alone. That’s 4% drop from November!

Median sales prices are up 8.2% over the same period last year.

The total number of homes for sale as well as the # of months’ supply are both up over 13% and 27% respectively as compared to December of last year. These are huge increases over the numbers reported last month.

Lastly, the days-on-market has increased over 6% from last year-to-date, which doubled from last month.

Here’s what these numbers mean…

For buyer’s, with interest rates falling and more homes available on the market compared to last year at this time, it may be a little easier finding what you want and avoiding the multiple offer market we saw last year.

This means you have more time to make decisions, do your due diligence like having home inspections and being better prepared for your purchase.

For seller’s, your competition is growing, and homes are staying on the market longer. Pricing your home correctly is key as we venture into the spring market. Sellers will need to wrap their heads around the fact that the “name your price and they will buy” market is over. Demand is still going to be high due to our lower inventory but not like it was the past 2 years.

So, if you want to get specific about your home’s value and your options right now, give us a call and let’s chat."

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Bruce & Kelly Domaille

Do you have real estate buying or selling questions? Don't know where to start? Nervous about the market? Looking for new construction options?We understand your frustration and are here to help get y....

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