Minnesota real estate market cooling down, but buyers continue to face challenges

Minnesota real estate officials say the housing market is cooling down, but prices are heating up and it’s presenting challenges for buyers.

“There’s still people out there that need to buy, want to buy and find a way to make it work,” Ryan Fischer, Re/Max realtor, said. Fischer said foot traffic has been steady in open houses across the Twin Cities.

“We’re getting probably five to 15 people through open houses right now, which is busier than during the pandemic and the last two years,” Fischer said.

According to Minnesota Realtors, home sales are slowing down. Closed sales dipped almost 31%, compared to last year. Median sales prices jumped nearly 4%.

“People look at the price is a little high on this property and the interest rates are higher. Now they’re thinking twice about purchasing that property,” Fischer said.

Factors like inflation and climbing interest rates are making it difficult for some to purchase a home.

“What people could afford last year is not what they can afford this year or what they were qualified for last year, the payments have almost doubled,” Linda Yang, a Go Mortgage loan officer, said.

Yang holds workshops and points first-home buyers in the right direction to find resources to purchase a home.

“It’s just educating, especially the younger crowd, what that process looks like so that they can prepare themselves for homeownership and understanding how credit plays a factor in that and how employment plays a factor,” Yang said.

Experts say the good news is that the market condition puts the power in the hands of buyers because there’s more to choose from and it’s easier to negotiate.

“They are able to put awesome terms in their offers. They can ask for some sellers [to] pay closing costs. They can actually negotiate some inspection items,” Fischer said.