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Minnesota real estate market cooling down, but buyers continue to face challenges

Minnesota real estate officials say the housing market is cooling, but prices are heating up and that presents challenges for buyers.

“There are still people out there who need to buy, want to buy and find a way to make it work,” said Re/Max broker Ryan Fischer. Fischer said foot traffic is steady at open houses across the Twin Cities.

“We’re probably getting five to 15 people through open houses right now, which is busier than during the pandemic and the last two years,” Fischer said.

According to Minnesota Realtors, home sales are slowing. Closed sales were down almost 31% compared to last year. Median sales prices rose by nearly 4%.

“People look at the price is a bit high on this property and the interest rates are higher. Now they’re thinking twice about buying that property,” Fischer said.

Factors such as inflation and rising interest rates make it difficult for some to buy a home.

“What people could afford last year is not what they can afford this year or what they qualified for last year, the payments have almost doubled,” said Linda Yang, a Go mortgage loan officer.

Yang conducts workshops and points first-time home buyers in the right direction to find resources for buying a home.

“It’s just educating, especially the younger crowd, what that process looks like so they can prepare themselves for home ownership and understand how credit plays a factor in that and how employment plays a factor,” Yang said.

Experts say the good news is that market conditions put the power in the hands of buyers because there is more to choose from and it is easier to negotiate.

“They are able to put great terms in their offers. They may require some sellers to pay closing costs. They can actually negotiate certain inspection items,” Fischer said.

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