A Monthly Look at the Twin Cities Housing Market

Trout's Twin Cities Housing Market Update for December 2022

With interest rates rising, you might be tempted to see the Twin Cities December housing market as nothing but a lump of coal. But for homebuyers, this market does offer some gifts.

It’s the last month of the year and what a crazy year it’s been for the housing market. We started the year with interest rates for a 30-year fixed-rate mortgage in the hovering around 3.5 percent and saw those rates rise sharply through the year, cresting (we hope) last month at just over 7 percent before dropping back under 6 percent earlier this month.

The number of new listings coming to market was squeaky tight last December, and that trend continues even as the total number of active listings on the market has increased because homes are staying on the market longer.

We are still in something of a standoff where sellers aren’t selling and buyers aren’t buying and the Federal Reserve indicates they may yet have one more interest rate hike up their sleeve next year. So, you have to wonder at this point, is the December housing market just a lump of coal?

Well, if you’re a buyer in this market, there is some good news.

So this month, I want to talk a bit about what’s five benefits for buyers in today’s housing market. Stick around until the end of the video for a quick preview of what you can expect from the Twin Cities housing market in 2023. 

Falling Prices

Since July of this year, the average sale price has fallen from $447,000 to $421,000 at the end of October. And while home prices are still almost 8 percent higher than last year at this time, home prices are expected to increase less next year. 

Seller Concessions

As the market softens, more sellers are willing to make concession, such as paying some or all of buyers closing costs. This is a significant change from the 2020 and 2021 market when homes were selling in hours or days and buyers were very limited in what they could ask from sellers.

Contingent Offers

Here’s something haven’t seen in a couple of years, seller’s accepting offers contingent on the sale of the buyer’s home. At the height of the market in 2021, we were seeing the opposite, buyers were willing to wait for seller’s to in order to close a deal.

The number of buyers asking for and getting home inspections is up around 80 percent! You may remember that during the height of the 2020-2021 housing market, submitting a purchase offer with an inspection clause would often get your offer shuffled to the bottom of the pile or tossed out entirely.

December's Gifts

Despite rising interest rates, it’s clear that the current housing market does offer buyers a number of benefits. 

With no indication from the Federal Reserve that interest rates will  drop significantly in 2023, prospective home buyers should be taking note of the current market conditions and consider making a move before the market heats up again next spring.

J Trout Lowen is a Minneapolis Realtor and an expert at helping buyers and sellers navigate the Twin Cities housing market. 

    

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