Twin Cities Real Estate Trends: 2023 Recap and 2024 Predictions

By Travis Anderson

In 2011, Travis started his career over and began building his own team; a team that has a different look and feel than most teams in the industry; one built SOLELY for the betterment of the client.

In this brief market update, we delve into the happenings of the Twin Cities real estate market in 2023 and offer insights into what may lie ahead in 2024.

The national headlines paint a gloomy picture for the real estate market, with reports of December home sales slumping to close out the worst year since 2015. Predictions from various sources suggest a challenging outlook, emphasizing slowed home sales and concerns about the upcoming year.

However, the local scene in the Twin Cities tells a slightly different story. Despite the negative national trends, median home prices in the Twin Cities actually saw a modest increase of 1.4% to reach $368,000. This shift, coupled with mortgage rates hitting an eight-month low, has implications for prospective homebuyers.

To put the current situation into perspective, five years ago, the median home price was $275,000, with substantially lower mortgage rates. Back then, the average family needed only $50,000 in annual income to afford a median-priced home. Fast forward to today, and with the increased median home price and lower rates, a family would need to earn between $80,000 and $90,000 to afford a similar mortgage.

Home sales in the Twin Cities, however, experienced a notable decline, falling by 17.6% to 44,000 over the last 12 months. This mirrors the national average, marking a trend not seen since 2012, when home sales in the Twin Cities dipped to similar levels.

Looking ahead to 2024, there are concerns about the potential decline in home prices. Despite the decline in the number of homes on the market, which has contributed to maintaining prices, economic factors like rising costs, an increase in retirees, and potential unemployment spikes may impact the market dynamics.

A key factor to watch in the coming months is the number of home sellers entering the market. If inventory rises and more sellers join the market, there could be pressure on prices to move downward. Various economic factors, including interest rates, could influence this scenario.

While the Twin Cities real estate market has shown resilience in the face of national challenges, there are uncertainties on the horizon. Keep an eye on market indicators and economic factors as we navigate through 2024. For a personalized evaluation of your home’s value in this market, feel free to reach out via email, call, or text.