Feature F Rochester’s Robust Real Estate Market By Maura Keller
According to the most recent monthly indicators published by Southeast Minnesota Realtors, new real estate listings in Southeast Minnesota were down 3.9% to 685. Pending sales decreased 10.1% to 620 and inventory shrank 26.4% to 765 units. In addition, prices moved higher as the median sales price was up 7.9% to $250,000. In new construction, home builders continue to struggle to meet buyer demand, as housing starts nationwide dropped 7% last month, according to the U.S Commerce Department. Single-family home construction
The team at Southeast Minnesota Realtors have seen the effects of Rochester’s robust real estate market first hand.
declined 4.5%, and multi-family home construction, which includes condos and apartment buildings, was also down, falling by 13%. Labor shortages, rising material costs, and supply-chain setbacks continue to challenge build- ers, with some projects temporarily paused due to availability and cost of materials. On a national front, SEMR points out that the National Association of REALTORS (NAR) reported inventory of homes for sale nationwide rose slightly in June 2021 as more sellers list their homes, hoping to take advantage of record-high sales prices across the country. Even with renewed home seller interest, inventory overall remains 18.8% lower than a year ago, according to NAR. These statistics point to various challenges facing both home buyers, sellers and the real estate industry as a whole. “Inventory is still going to be the biggest challenge, not only in our area but nationally going in to 2022,” Brownlow says. “We believe the last year and a half has created a different mentality with the public. With more people working from home, location has slipped on the priority list. We are seeing a lot of expansion in the smaller communities in Southeast Minnesota, not only in new subdivisions and new
H ere’s one thing we know: Rochester’s real estate outlook has improved over the last few months and will continue to slowly gain steam in 2022 and beyond. While there are numerous reasons to be cautious about predicting future job growth— including the highly publicized fiscal cliff, the financial, administrative, and light industrial segments within the Rochester market are showing improvement after a relatively harsh recessionary economy. As Eric Brownlow, association executive and government affairs director at Southeast Minnesota Realtors (SEMR) explains, the Rochester area has been experiencing growth in home values since 2012. In fact, the last two years have seen an acceleration in the increase to values due to the region’s dwindling inventory. “The main two ways the housing industry increases supply is by building new homes and preserving our existing housing stock,” Brownlow says. “The industry has fallen behind in replenishing our housing market in both areas since the recession.”
| Advantage Magazine 6
October 2021
Made with FlippingBook Annual report maker