Take a deep dive into these five local housing markets to better understand the trends across the nation. Each city has a unique market and enticing listings to attract new residents.
Siesta Key, Florida
Remote work flexibility opened up the possibilities of where people could live, so more and more homebuyers have decided to make the move to the beach. Just outside of Sarasota and right on the Gulf of Mexico, Siesta Key is one of the many beachfront locales these buyers have flocked to.
“The beach has been a huge draw — it never snows here, you never have to worry about shoveling the driveway or scraping off your car,” Trystan Foglia, a local eXp agent, said. “And with the COVID-19 pandemic, things started opening up in Florida a lot earlier than other places, so some people moved here because of that.”
But as interest rates have risen, demand, which was once white hot, has started to cool.
“Now we are starting to see houses sit on the market for more than a week when you used to be able to get five offers in under 24 hours,” Kayla Minck, who works with Foglia on The Kameli Team, said. Both Minck and Foglia said that while things are cooling down, it is not quite a buyers’ market, though it may turn that way in the future.
“Buyers are active, but not as active as they once were. Prices are high and now rates are high and every time we have spoken to buyers recently, they say they are waiting for the rates to go back down, but at this point, I think they will be waiting a while,” Minck said.
Twin Cities, Minnesota
The Minneapolis-Saint Paul metropolitan area, better known as the Twin Cities, is home to everything from professional sports teams to award-winning theater productions, a vibrant craft beer scene, as well as the nation’s largest shopping mall. With all these attractions, it is easy to see why so many people want to call the Twin Cities home.
“The Twin Cities is almost always in those ‘top ten places to live’ lists,” Ryan O’Neill, a local RE/MAX agent, said. “There is a strong employment base, four distinct seasons and big city amenities without the crowds of some other major cities.”
Like just about everywhere else in the country, the Twin Cities has been dealing with an inventory issue. On the day O’Neill spoke with HW Media, he said there were roughly 5,000 homes on the market in the area, and noted that a balanced market is closer to 18,000 homes.
“Interest rates are rising, and we are seeing some cooling, but demand is still strong, just not as strong as it has been the last couple of years.”
Sioux Falls, South Dakota
Sioux Falls, the largest city in South Dakota, accounts for roughly 30% of the state’s population and has become quite the destination. Its namesake, the Big Sioux River, runs just north of the downtown area, providing lush landscapes and picturesque waterfalls for locals to enjoy.
As with so many metro areas, however, an increase in homebuyer demand has, of course, created some challenges for the local housing markets.
“We are still seeing fairly low inventory,” local agent Amy Stockberger, of Amy Stockberger Real Estate, said. “We have seen a little bit more inventory accumulate but it is nothing in the big picture.”
As interest rates have risen, Stockberger said she has seen a slight drop off in demand, but conditions have more or less persisted at their current rate.
“Anything under the $400,000 price point is still pretty aggressive and getting a lot of offers, then we also have an aggressive market for things above $900,000, which is really interesting,” she said.
Stockberger attributes the high level of demand for pricier homes to the influx of out-of-state buyers the area has seen, and while the market may cool due to rising interest rates, she expects the area’s natural beauty and lack of a state income tax to continue attracting buyers in the coming months and years.
Temperatures in Austin have been in the triple digits for months now, but the metro area’s housing market has finally started to cool off. Austin’s housing market has generated plenty of headlines over the past two years, as major corporations, as well as individuals, have decided to call the capital of the Lone Star State their new home.
But, as mortgage rates have risen and home prices in the metro have continued to rise, the market has calmed down.
“Instead of seeing 10 plus offers on something, you are seeing more like five offers. Instead of going in three or four days, homes are now sitting a bit longer,” Jeremy Vandermause, a local Bramlet Residential Real Estate agent, said. Vandermause also noted how much purchase power homebuyers have lost as interest rates have risen.
“People are more hesitant,” he said. “I have a client right now whose price range was $400,000 to $420,000 and now it is more in the $360,000 to $390,000 range because her original budget was created when interest rates were at 3% or 4%.”
Raleigh, North Carolina
Even before the onset of the COVID-19 pandemic, Raleigh was one of the fastest growing cities in the country. As more and more people flocked to the metro area, Raleigh’s housing market turned scorching hot, according to Redfin.
However, local agent Marti Hampton, of Marti Hampton Real Estate, said that rising interest rates have been putting a damper on the previously hot market.
“It is still a very strong sellers’ market and there is not enough inventory for the buyers, however, I have seen a shift in the number of offers that we are receiving,” Hampton said. “A few months ago, we were receiving 30 or 40 offers on a single property and that has dropped down some. We have seen a slight seasonal increase in inventory like we normally would see this time of year, but it is still not enough.”
Despite the downshift, Hampton is confident this big city’s small-town southern charm, along with other attractions like top universities and health care providers, will continue driving homebuyers to Raleigh.
“During the Great Recession, it was like somebody turned the faucet off,” she said. “It was gangbusters, home sales like crazy, then all of a sudden it went down.”
This article was originally published in the September issue of HousingWire Magazine, click here to read the full magazine.