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Twin Cities Home Prices Flattening Out with Latest Rate Spike

March 20, 2023 by Mighty Agent

  • Median sales price of Twin Cities homes rose 0.6 percent to just under $342,000
  • Buyer activity down 23.6 percent with 2,932 pending sales
  • Sellers listed 24.3 percent fewer homes compared to last February

(March 15, 2022) – According to new data from Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®, the median sales price across the Twin Cities grew 0.6 percent to $342,000. Home price growth has flattened out in the face of higher mortgage rates and deteriorating affordability.

Inventory & Home Prices

Although home prices have flattened out, they were still up slightly year-over-year. It’s possible that home prices soften in the coming months if rates rise further or remain sticky. “People should understand that their home hasn’t necessarily lost value simply because the median price falls,” according to Jerry Moscowitz, President of Minneapolis Area REALTORS®. “The median reflects the mid-point where half the homes sell for more and half for less. If there are more luxury properties, new homes or condos selling, that all impacts prices. So does supply and demand.”

Home buyers have been able to purchase bigger, nicer homes when rates were low because the payment allowed them to. That’s changed. Buyers are more willing to look at other property types, smaller homes and in different areas. That doesn’t mean every home out there is worth any less, but likely means those that do sell may have to be flexible and make some concessions.

Given the pullback in sales, we had 7.1 percent more homes on the market at month-end. Before buyers celebrate more options, the metro only has 1.3 month’s supply of inventory. Typically 4-6 months of supply are needed to reach a balanced market. Since both sales and listings have come down in tandem, the market remains fairly thin. That said, sellers don’t quite have the leverage they’ve enjoyed of late.

Sales & Listings

The Federal Reserve’s rate hikes have taken a toll on home sales. As some buyers were sidelined by higher mortgage rates and increased monthly payments, resulting in 2,932 purchase agreements, 23.6 percent below last year. The decline in pending sales is the second smallest since July 2022—behind January of this year and hinting that perhaps the declines are easing. “We’re in a place where buyers have more leverage but lowball offers likely won’t be successful,” said Brianne Lawrence, President of the Saint Paul Area Association of REALTORS®. “That means buyers are writing offers at or slightly below list price and they can take more time to decide on what works best for them.”

Sellers brought 3,423 homes on the market in February, 24.3 percent fewer listings than last year. Half of all sellers sold their listings for over 98.2 percent of list price compared to 100.0 percent last year. And they accepted those offers after an average of 62 days on market compared to 44 last year.

Location & Property Type

Market activity varies by area, price point and property type. New home sales fell 9.2 percent while existing home sales were down 25.7 percent. Single family sales fell 26.2 percent, condo sales declined 36.0 percent and townhome sales were down 6.4 percent. Sales in Minneapolis decreased 35.0 percent while Saint Paul sales fell 33.7 percent. Cities like Corcoran, Buffalo, Watertown and St. Francis saw the largest sales gains while Hudson, Forest Lake and Carver all had notably lower demand than last year.

February 2022 Housing Takeaways (compared to a year ago)

  • Sellers listed 3,423 properties on the market, a 24.3 percent decrease from last February
  • Buyers signed 2,932 purchase agreements, down 23.6 percent (2,295 closed sales, down 20.3 percent)
  • Inventory levels grew 7.1 percent to 5,327 units
  • Month’s Supply of Inventory rose 44.4 percent to 1.3 months (4-6 months is balanced)
  • The Median Sales Price rose 0.6 percent to $342,000
  • Days on Market rose 40.9 percent to 62 days, on average (median of 44 days, up 131.6 percent)
  • Changes in Sales activity varied by market segment
    • Single family sales decreased 26.2 percent; Condo sales were down 36.0 percent & townhouse sales fell 6.4 percent
    • Traditional sales declined 23.9 percent; foreclosure sales rose 10.3 percent; short sales increased by 8 units
    • Previously owned sales decreased 25.7 percent; new construction sales declined 9.2 percent


    From The Skinny Blog.

Filed Under: Listings and Pendings

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What Our Clients Are Saying

Working with the Spiczka Marketing Group to buy our first house was a great experience. Their combined expertise is more than you could ever get from a single realtor, and they are very collaborative, so you have a group of awesome people working for you! Even though we had a couple of houses not work… “Testimonial 1”

Renee S.
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The most lovely duo in real estate is this mother-daughter team. My naivety lent me to having little confidence in buying my first home, but Lyndsey and Cyndy helped guide me to a wonderful home. Later they helped our growing family sell, and got us into our current home well suited for our expanding needs.… “Testimonial 2”

Michelle S.
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You guys definitely showed you know your industry and all the little things that help differentiate one house from another in a very competitive market. Your guys are the rock stars of the realtor world in our book!

The Williams Family
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The Spiczka Marketing Group did an outstanding job of first helping us to sell our home in the depressed 2008 market. We were able to sell and receive the needed amount to finance our new home that they helped us to find and ultimately purchase. They understood our needs and wants and selected homes matching… “Testimonial 4”

Larry and Kathy Nelson
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The Spiczka Marketing Group made my buying experience easy and worry free! I have purchased two homes with them and they sold one for me too. They are always accommodating and having a team of people to help with the buying process makes scheduling showings a breeze. Anytime I need to purchase real estate in… “Testimonial 5”

Mike H.
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It was an absolute pleasure working with the Spiczka Group! Cyndy and Lyndsey were amazing in every way. I was most impressed with the promptness and flexibility they had with scheduling showings and answering all of my questions, even on short notice. I always felt like I was a priority. Their experience guided us through… “Testimonial 6”

Cami T.
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Lyndsey was wonderful to work with! She understood our needs almost immediately, and as first-time home buyers in a competitive market, she helped us to stay patient and keep a positive perspective. She was always available and quick to respond to any questions, and she also connected us with some amazing people to help with… “Testimonial 7”

Amanda & Marcus
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We truly enjoyed working with the Spiczka family during our recent home search. They were always very kind and patient when dealing with all of our questions. We quickly found that their experience sets them apart from other realtors. I believe they are in the business for the right reasons and enjoy helping people find… “Testimonial 8”

Nikki W.
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The Spiczka family was recommended to me as I began my search for my first home, and I couldn’t have been happier with my experience. I felt comfortable throughout this new process because I knew Cyndy and Lyndsey had my best interests in mind. Their level of communication went above and beyond my expectations by… “Testimonial 9”

Kristy
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The Spiczkas did a wonderful job at helping us find our home. They’re always there to help you and answer any questions you have. And not to mention we had a blast with them. I would recommend them to everyone.

Kaitlyn
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The Spiczka group was fantastic to work with. I was a first time home buyer and they took the time and explained things to me along the way and were very patient in my long search for a home. The team was able to show me houses just about anytime I wanted to see a… “Testimonial 11”

Steve
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Cyndy and Lyndsey Spiczka embody what buyers and sellers need! We have worked with them 5 different times buying and selling properties over the past 12 years and we would not work with other agents. Their market knowledge and professionalism is unprecedented as is their ability to negotiate a deal that met our needs as… “Testimonial 12”

Denice
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