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2022 began where 2021 left off - Mortgage rates were historically low, low inventory made buyer competition fierce and homes often had multiple offers causing sales to soar even higher. But as soon as rates began to rise that all changed. After two years of record breaking activity - the red hot market finally started to cool. Pending and closed sales decreased by 20% by the end of 2022 and active listings increased by 16.2%. Yet home prices did increase by 6.6% and the median sales price increased as well. Sellers still received, on average, 100.9% of the original list price at sale.
So, on the surface things don't look too bad, after all sellers were still getting full price offers, but homes sales continued to decline throughout the year and affordability challenges for both buyer and seller forced many to sit on the sidelines. Looking ahead to 2023, much depends on inflation, mortgage rates and the economy. The economists predict that housing trends will soften home sales, inventory will remain tight and price growth will moderate. Based on what I am seeing right now, any home under $350,000 will still have steady prices and shorter days on market. Very little change in value but will most likely not increase substantially as we've seen the past 2 years. Homes in the upper bracket (over $500,000) will see a slight decrease in value but that will depend on location and demand. The Twin Cities are still a stable area and we have the advantage of being in the Midwest. A great reason why we put up with the cold winters! If you would like to know more details on your city and home, please let me know and I can provide those numbers for you~
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