It is 2023, and we are sledding downhill just as fast as gravity will let us!

There is and will continue to be so much to cloud the mind as we look into the coming year for the real estate market. One thing to for sure mention is that national financial reports are rarely accurate and reflect what is happening in Minnesota. The 2023 predictions for the Twin Cities real estate market are far more positive than a number of metro area's around the US. So, my suggestion is to watch a little less "Bad News" TV, and explore the actual real, relevant, and local data before you make buying or selling decisions.

I thought it would be good to start with some general forecasting for the Twin Cities from national sources. 

The most pessimistic I could find was fascinating, as it still had some price appreciation. It is from "data guru" Marco Santarelli with Norada Real Estate. He does forecasting for investment bankers who invest large sums of money into residential real estate, and he predicts a slight appreciation of .6% in the Twin Cities Metro. 

The most optimistic was the Twin Cities Business Journal and Realtor.com predicting a 5.6% average appreciation for homesellers. 

I spent the month of December in the Thursday emails that I send out reviewing the actual data from the SW metro, which for our statistical steadiness is defined as Eden Prairie, Minnetonka, Chanhassen, Victoria, and Chaska. Here are the two most interesting take away’s looking a the year of 2022. 

The average closed home price per square foot buyers were willing to pay last year went up at a healthy 8.6% which was $184 per sq foot to $201.50 per square foot. This would include

The average price a seller received of their initial list price went up to as high as 104-105% of the list price in April and May, and has settled in significantly since then to end the year at sellers receiving an average of 96% of their initial asking price. 

2022 saw continued a high demand but low availability. The months supply of homes to satisfy the heavy demand has changed very little from the start of 2022 to the end. 1 month to 1.2 months which is only about a week difference. Which is a strong positive trait that will continue for the forseeable future.

The single largest negative trend for sellers that came on strong in 2022, and will persist in 2023 is that the actual sale took much longer by comparison. Starting the year homes were selling in 13 days, by the end of the year it was 34 days.

To summarize, 2023 will be the year that…

• Homes will sell at a healthy pace. Selling will take longer to (some 2-3 months). 

• Home sellers who want "top dollar" will still be rewarded if they cosmetically prepare their home.

• Due to stabilizing, but higher mortgage rates….Home buyers will have "power" to negotiate reasonable and justifiable concessions. 

2023 SW Metro Real Estate Market Outlook - YouTube