DEC 2023 - Minnesota Real Estate Market Update

[@jocelynnavarro8347]

Really sad to see such outrageous prices from homes in MN.

[@LivinginMinnesota]

It's all relative I suppose.

[@empTax-kb6yn]

Honest question . Do you think historically high housing price is sustainable in MN? There is negative migration in the state and median house has monthly payment of 3k. How many can afford and for how long?

[@LivinginMinnesota]

Really great question, I appreciate you asking. Here are some thoughts: 1. "historically high housing prices" is what would happen every single year if we hit the government's target rates for inflation, which I believe they shoot for +2-4% per year on home prices. I couldn't tell you the science behind how they come up with that number, but it's what they say makes a "healthy" economy. So with that - each year, on average, would make a new 'high' on home prices. So don't let that scare you. 2-It's all ultimately a relation between how much people are making and the cost of goods, including houses. MN has one of the higher median incomes, and is in the middle for home prices. That's a pretty good spot to be in. 3 - Prices are determined by supply and demand. Currently we're seeing a lot of demand and low supply, which drives up prices. This year it's slowed, as you saw on this market update. Because we had been seeing price increases much more than ideal the past few years, I think it'll be really healthy for our market to see less/no increases from this year - which would give wages a chance to catch up. So, to answer your question - no, I don't think we'll sustain the same increases as we have been seeing. And also, there's still a ton of demand which will keep prices from falling significantly, especially once interest rates come down which will cause more demand. Hope that helps!