Feature F A CAUTIOUS TALE Written by Maura Keller
F or the first time in many years, Rochester’s real estate professionals are not gearing up for a red- hot year of real estate transactions and property development. Instead, economic uncertainty, rising interest rates, and low inventory has weakened the local outlook for 2023, and although few are preparing for the worst, most experts say caution will rule the residential real estate market. For the past few years the residential real estate market – both nationally and in the Rochester region – has “wowed” real estate professionals, property investors and developers alike. But cruising on a high-octane mix of very low interest rates, a booming economy, and low inventory rates can only last so long. Like the stock market, the residential real estate market was in need for a correction. Michelle Jandt, 2023 Southeastern Minnesota Realtors (SEMN) President, along with the SEMN executive committee members, Karl Rogers, Adam Howell, and Joe Skime, provided their insights into the Rochester regional residential real estate marketplace.
“Looking back on ‘21 and ‘22 we saw the typical and recent trends of prices increasing and inventory remaining relatively low,” the SEMN executive committee says. “There was a big shift in the summer of ‘22 with interest rate hikes. The latter part of the year did slow down with buyer activity. However, we are still seeing multiple offers.” Eric Brownlow, association executive and government affairs director at Southeast Minnesota Realtors (SEMR), added that rising interest rates have become a challenge over the last year. That said, he says today’s rate is a temporary stitch in time. “The average net worth of a homeowner is 40+ times more than the average renter,” Brownlow says. “Beyond simple wealth building, homeownership provides stability and a heightened sense of community pride and involvement.” Today, there are 181 single family/condo/ townhomes actives for sale in Rochester. Last year at this time, Rochester had fallen below 100.
| Advantage Magazine 4
April 2023
Made with FlippingBook Digital Publishing Software