Real estate selling quickly in Rochester, Southeast Minnesota housing market
The current real estate market in Rochester and across Southeast Minnesota is seeing record high numbers for median sales prices and the lowest amount of days on the market.
ROCHESTER — The numbers are in for real estate market data for Rochester, Olmsted County, and the Southeast Minnesota region for the first four months of 2022. The trends show that new listings continue to move fast compared to the similar time frame in 2021.
Data compiled by Jim Miner of Plaza Realty of Rochester and the Minnesota Realtors trade association show that the housing market through the wider region continues to see quick turnover for days on the market.
The data reported for the city of Rochester was compiled by Miner and the data for Olmsted County and Southeast Minnesota Region was compiled by Minnesota Realtors.
Miner said most houses being listed on the market right now are barely making it to the month mark.
“There's very little supply and a lot of demand. There's just very few houses on the market, compared to the number of people that want to buy a house," Miner said. "So the days on the market are very limited this year, compared to last year and other previous years.”
Eric Brownlow, chief executive officer for Southeast Minnesota Realtors added, “The typical home seller upon putting their home on the market are seeing double-digit showings in the first few days on market and are also seeing multiple offers within the first week of market time. Simply put, there are more buyers than sellers.”
As of April 2022, homes listed are only lasting 32 days on the real estate market in Rochester. That's comparable to the 31 days on the market in 2021.
Across Olmsted County, houses are only averaging 29 days on the market compared to 28 days in 2021. And across the Southeast region of Minnesota, houses are also lasting 32 days on the market compared to 36 days in April 2021.
Median sale prices on houses are at an all-time high for Rochester, Olmsted County and the Southeast region. with the median price in Rochester jumping from $270,000 in April 2021 to $322,500 in April 2022. Olmsted County has seen a greater increase in median sales prices rising from $271,761 in April 2021 to $330,000 in April 2022, a 21.4% increase. Across the Southeast Minnesota region, median sales prices are up 16.6% from April 2021 going from $235,000 to $273,950.
Brownlow said the median sales prices have jumped so drastically over a year’s time due to a combination of value and fear.
"Buyers see opportunity in the market at current value levels due to increasing prices and fear that although interest rates are rising, most feel interest rates have not yet stabilized and that they may lose buying power if interest rates continue to rise,” he said.
Miner added that people are paying above asking prices because the competition from multiple offers on many homes.
Currently Rochester house sellers are receiving 101% of the original listing price compared to 100.7% a year ago. Olmsted County is also up from 101.6% a year ago to 102% now. The Southeast region has not seen quite an uptick in change. The numbers for original listing price only jumped 0.3% from a year ago from 100.5% to 100.8%.
Despite the fast and furious nature of the housing market, the number of closed sales has begun to decline throughout the area. This goes back to a high demand and low supply of houses on the market in the area. For Rochester, closed sales have only gone down by 13 from a year ago in April at 187. Olmsted County has seen little change dropping from 224 in April 2021 to 221 this April. Finally, the Southeast has seen the greatest decline in closing sales going from 572 in April 2022 to 530 this year.
As mortgage rates rise on the housing market due to inflation. Average rates in Minnesota for a 30-year fixed loan were 5.878% on Thursday, May 26, 2022. A 15-year fixed rate was 4.778%.
Brownlow said rising mortgage rates are impacting the expectations for buyers and sellers.
“There is no doubt that an increase in mortgage interest rates have an impact on market conditions," he said. "Any increase in interest rates reduces the buying/qualifying power of the buyer. People adjust to the reality of higher interest rates and adjust their expectations."