Looking Back on 2023, a Year of Resilience
Despite the challenges of rising interest rates and a market where both buyers and sellers were hesitant, housing prices continued to rise in most Twin Cities neighborhoods. The average market time was less than two weeks, and multiple offers persisted across all price ranges.
Limited Inventory
In Minnetonka and Edina, for example, the number of sold properties were down 20% compared to 2022:
• 516 sales for 2022 compared to 409 sales for 2023 in Minnetonka
• 563 sales for 2022 compared to 450 sales in 2023 for Edina.
Rising Interest Rates
Rates in 2023 started around 6.5% for a 30-year mortgage and continued to rise. They peaked in October at nearly 8%. As affordability declined, both buyers and sellers retreated.
Multiple Offers and Rising Prices
Despite the negative news, sellers who decided to sell their homes were often rewarded with multiple offers and premium pricing as buyers who stayed in the market fought for the limited inventory available. Median sale prices were up in several cities. St Louis Park saw a 3.3% increase, Plymouth a 7.8% increase and Wayzata a whopping 16% increase!
Looking Ahead to 2024
With the Fed now hinting at multiple rate cuts for 2024, we are anticipating an active market. The 6.5% interest rate that seemed high last January now has a different tone, coming off the highs of 8%.
Our Predictions for 2024
What we can predict is our commitment to staying on top of the real estate market and providing you, our clients, with the necessary information to make a well-informed decision when it comes to buying or selling your home.
