The MN Housing Market Outlook for 2019
Frank D'Angelo
As 2019 begins both nationally and locally in Minnesota; home sales are down approximately 1.5% from a year ago. Many experts are suggesting that many buyers have become priced out of the market while other frustrated buyers are waiting for more inventory to hit the market.
Home prices are up 4.6% and the average home values in the Twin Cities Region have climbed to: $311,946 as of this publication. See live current and interactive illustration below.
Homes that are price correctly are still selling fast while inventory is still relatively tight. Competition for homes remains high and there are 3 factors to watch for in 2019.
- Interest Rates. Experts are predicting that the Federal Reserve will increase interest rates at least 2 times in 2019.
- Inflation. Inflation is expected to increase slightly due to the strengthening labor market and tariffs.
- Strength of economy. While the economy continues to strengthen, there are no signs of any change in the US economic growth for 2019.
Will We See a Market Correction in 2019?
There are many doom and gloom reports predicting the next recession. However the economy has been growing since 2009, the longest stretch in history for this nation. Since markets do cycle; it's only natural to predict when the economy will decline. However, recessions are often caused by shocking events to the economy.
There are more seasons however to be optimistic about the housing outlook in the US. Over the next year, economist predict the Gross Domestic Product (GDP) will continue to grow and unemployment rates will fall even further nearing zero unemployment. The risk of a recession in the near future is minimal according to most economist.
Overall, the housing outlook is strong even with the rising interest rates. Clearly we can anticipate a much lower level of appreciation then the recent past years as we're seeing more price reductions in some areas of the Twin Cities region.
