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housing starts, but also in commercial opportunities. More roof tops equal more small business opportunities for these communities.” Looking into next year, the million-dollar question is “what will interest rates look like?” Brownlow says that right now, the median home value in the Rochester area is $250k. Interest rates are hovering around 2.875%. If interest rates go up 1%, the typical buyer will have about 30K less in buying power. “The same can be said of any home expense,” Brownlow says. “Even an increase in real estate taxes can significantly decrease a purchasers buying power making homes less affordable in the region.” A Local Versus National Outlook Locally, the Rochester area does follow many of the national trends in real estate, just not with the wild swings you would experience in other parts of the country. As Brownlow explains, “Nationally, there is a trend of multiple offers on property leases. People are actually bidding up monthly rental rates in order to secure housing.” “The Rochester area has seen a large expansion in the new apartment market segment, and with modest vacancy rates in town, we are not seeing this nor expect to see this trend in our area,” he says. “We are also seeing apartments being built in the surrounding
trend will impact our local market due to the continued influx of visitors our region is still seeing.” Currently, interest rates and an increase in housing rental rates are driving the Rochester real estate market. “Yes, it is a great time to sell your home. We are still in a sellers’ market. However, it is also an extremely good time to buy. Buyers are seeing that they can own for less of a monthly obligation than renting,” Brownlow says. “The pandemic is also at play here. During uncertain times, people tend to move to a safe position financially. Real estate continues to be the safest investment on the planet over the long term, and homeownership is still considered part of the American dream by 75% of non-homeowners per the National Association of Realtors.”
communities to meet the increases in population. Austin, for example, has several apartment complexes either built or in the planning stages where as they have not seen a large apartment complex built in the past 30+ years.” Another national trend to note is the conversion of short-term rentals (STR) being converted back to single family homes for owner occupant buyers. “The values have shifted back to the property having
The real estate market is currently a sellers market and people are eager to buy. Seen here, Realtor Tim Meirick (right) of Edina Realty, showing a house to prospective buyers in Rochester.
a higher value as a single-family home versus an income-producing property,” Brownlow says. “The ongoing COVID pandemic continues to have an impact on this with less need due to less travel. It is unclear if this
Advantage Magazine | 7
October 2021
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