Southeast Minnesota housing market predictions for 2023

Economists do predict home sales will soften and price growth will stabilize.
Published: Feb. 7, 2023 at 6:12 PM CST
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ROCHESTER, Minn. (KTTC) – Housing Affordability has plummeted to its lowest level in decades. That’s according to The Southeast Minnesota Association of Realtors Annual Report. Last year, mortgage rates rose, adding hundreds of dollars to monthly payments.

But how is the market looking for 2023?

A lot of that depends on inflation, mortgage interest rates and the broader state of the economy. However, economists do predict home sales will soften and price growth will stabilize.

In Southeast Minnesota, the overall median sales price increased 8.2 percent within the past year. Pending sales went down by nearly 14 percent and closing sales were down nearly 10 percent.

The number of homes sold in the $300,001 and above price range increased by nearly 6 percent. However, Homes sold in the $100,001-$150,000 price range fell more than 30 percent.

“The interest rate hike, obviously that’s what everyone is talking about and is aware of that happened in the summertime. It’s starting to slow down and level out so that’s helpful for buyers,” Southeast Minnesota realtor Karl Rogers said.

Housing experts say last year was a bit hectic for buyers, but the market should level out in 2023.

“Giving buyers a chance to maybe take a breath and look at houses and maybe write a contingent offer on a home inspection and have that completed,” Southeast Minnesota Association of Realtors Michelle Jandt said.

As for sellers, realtors recommend being practical with your pricing.

“Be very realistic about where they are listing their home as far as their listing price goes, some sellers are still in the mindset of a very busy and crazy market that we’ve been seeing for the past two or three years, but we feel things are leveling out a little bit,” Rogers said.

While the price of anything doesn’t look to be going down anytime soon, housing experts say price increases should slow down.

“I don’t think the house prices are going to go low, but I don’t think they’re going to accelerate as they have in the past,” Jandt said.

“Typically, what we see around the turn of the new year, things start to pick up and people get back into shopping mode,” Rogers said.