Is the market crashing? Should you still buy or sell real estate? What is going on in the Twin CIties real estate market? Joe goes through all this and more on this month’s market update video.

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It's finally happening. The market is crashing. Prices are down. Supply is up, everything is upside down. Let's get into the data though, and really check this out.

All right. So what's really going on here? Well, prices did fall. Our median sale price for single-family homes in the seven-county Metro went from 410,000 to 401,000, but that's something that seems to happen pretty much every year about this time that we see prices start to come down just a little bit, as we move towards the winter months. Here in Minnesota, people have a frenzy to move in the summer and not so much of a desire to move as we move towards the winter months, school starts too. Everything kind of slows down.

But wait, monthly inventory is also up we've we went from 1.2 months to 1.3 months. Is that a big change? I personally don't really think so. Well homes for sale, you know, the number of homes for sale. Well, that actually increased just slightly in the month of July.  What do we see historically? Typically starts to fall off. We are still well below numbers. Meaning that supply is still very, very low.

Percent of original list price. This is one that, you know, this is starting to look a little bit better. We peaked out this summer at a hundred, 5.1% dropped to a hundred, 3.7 and are now at. 101.5. Compared to last year, we were still in July at a 104.1.

But if you look back at past years in the middle of the summer is the only time we even ever reached a hundred percent. And the first time that we did reach a hundred percent was in May of 2016 and we were there for two months. Otherwise a normal market should be down under a hundred percent. 

Mortgage rates. This is something that has a big impact on everything. Well, you know, if you are. A $500,000 home buyer. You have a credit score of 720 or above. You're looking at a five and a half percent interest rate. That's pretty good actually. In all reality interest rates have come down. We've seen a lot of ups and downs in this. The fed did increase the, the federal rate basis point by three quarters of a point last week. Our interest rate numbers were already baked into everything and it actually caused mortgage rates to come down. 

So let's look at some other data that we have with the number of showings per week, per listing, in that median sale price range, we are down to 3.15, which is actually a little bit below where we're at in 2019. When we go and look at the suburbs 5.07. Up just a little bit over last week, down from where we were at last year. But again, we are still way up from 2019.

All right. So is the market crashing? No, it's really not. This is something that takes place every single year. We see these peaks and these valleys where, in Minnesota in particularly, we go up in the summer, we reach a peak and we start to come down. Our home prices are up this year, already 14%. You know, I would expect to end this year, probably somewhere around 8% to 9% is what my guess is going to be with low inventory. We still have a lot of buyer demand out there. There's still a big need for housing. Millenials are the biggest group of home buyers that we have and the largest population group that we have as well. And that's something that's not changing, a recent study and data out from the National Association of Realtors actually say that we are 6 million homes short of where we need to be in supply to give a little bit of context in that the city of LA has 1.4 million housing units. Total. That that's how many there are in the city. So we have a long ways to go before we can reach supply and demand equilibrium. It is, it is a spot that we are in right now. That is very, very unique. My personal feeling, the, the thought throughout the rest of the team, something we were just talking about this morning is this may be the housing market that we see possibly for the rest of our lives. It is something that we simply can't build ourselves out of. And when we don't have the supply and there's a demand for housing, even if interest rates were to go up to 5%, 8%, 9%, there's still people that need to buy and sell homes. And when inventory is this low, it continues to keep housing prices stable.

So are we gonna see a big crash in the market? You know, in Minnesota, it's not gonna take place. Around the country.  there is other places, Phoenix, Arizona, you know, some of the coastal cities that saw these massive, massive increases in sale prices happen. They are getting it a little bit harder with all of this here in Minnesota. We're sheltered from a lot of it. We have one of the strongest economies in the entire nation. Our unemployment levels are the lowest in the entire nation. And I think the lowest that they've ever been here. So we have a very, very stable economy. I expect and many other people. Our housing market to stay very, very strong for a very, very long time.

Now, if you're a buyer in this market, things are easier now. Don’t expect to get a home, you know, 10, 15, 20% under list price, but we are now in a position where. You don't have to give up so many of your rights. You don't have to waive every contingency. It is becoming much easier to purchase homes. You know, the average $350-$400,000 home a good home is still going into multiple offers and it's still selling over the list price, but is it selling $40-50,000 over list? Not typically. One, just this weekend, we were able to get under contract. It was in multiple offers. There was three offers on the proper.  we got it for 25,000 over the other offers were right there as well through a little bit of good work and some of our other contingencies and making it very safe for the buyer as well as attractive for the seller, we were able to win on that one and get it under contract, but they didn't have to do all of these crazy things that were necessary over the past couple years. 

Sellers, it's still a great time to sell. There's still very, very low inventory. Interest rates have come down. Buyer demand has actually picked up a little bit that we have seen over these past couple weeks just because of it, but it's still a great time to sell. Great, great time to cash in on some of that equity, the housing market is always changing and the housing market is always something that you need to look at on a local level. So we are here for that. We're here to give you the data. If you're interested in something in your personal city about exactly what's going on there. We're happy to dive into the data for that, but right now, the market's not crashing. These are the typical ebbs and flows that we see every single year in the real estate market. Things will remaining stable. If you have any questions about any of this, feel free to reach out. We'll talk to you guys next time.