Shifting trends in the 2024 housing market

Editor’s note: Eden Prairie Local News (EPLN) introduces its monthly real estate column by Kelley Regan, aimed at providing Eden Prairie residents with insights into current real estate trends. Regan has lived in Eden Prairie since 2004 and has over 28 years of experience in real estate, focusing on senior housing, first-time homebuyers, and negotiation strategies. Beyond her professional role, she volunteers with local organizations, including The PROP Shop and the Eden Prairie Historical Society.

At the beginning of 2024, significant changes emerged in the national real estate market. Sales accelerated in the Midwest, South, and West, contrasting sharply with the Northeast’s stability. These shifts indicate a mix of challenges and opportunities in the sector.

From the previous year, sales in the West improved, while the Northeast, Midwest, and South experienced declines.

According to the National Association of Realtors, existing home sales suggest this trend marks the beginning of a more balanced supply-and-demand dynamic in the housing market, despite sales figures still being lower than past peaks. Mimicking the Midwest market, Minnesota was also in a sweet spot in February.

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Minnesota witnessed a notable increase in home prices, rising 4.9% from the previous year to a median price of $330,300. The housing market showed robust activity, with the number of homes sold jumping by 13.8% year-over-year, totaling 3,516 homes. Additionally, homes spent an average of listing to close of 51 days, indicating a relatively quick turnaround for property sales in the state. 

The Minneapolis housing market is buzzing and competitive as it adapts to both the local economic landscape and broader national influences. With homes spending an average of just 41 days on the market, there’s a sense of energy and optimism among buyers and sellers alike. Analysts are also optimistic, forecasting potential uplifts in housing prices driven by the intertwined forces of employment and interest rates. 

The Eden Prairie housing market is moderately competitive, with homes receiving an average of three offers and typically closing in about 71 days from the listing date. The median sale price of the home was $435,000 last month, redirecting a 10.4% decrease from the previous year, while the price per square foot has increased to $203, up 5.7% year-over-year. On average, homes in Eden Prairie spend 24 days on the market. This duration is much shorter compared to Minneapolis. Moreover, the trend for days on the market has gone down since January 2024, and just a little down since last year. 

With interest rates holding steady at a comparatively high rate and housing supply being down, this sets the stage for a slower market this year compared to last. Buyers are sitting on the sidelines, waiting for a change to come, but will it? According to Zillow, it’s not going to happen this year. 

Essentially, all of the 2023 headwinds remain. Elevated mortgage rates, out-of-reach home prices and record-low housing stock continue to make for a perfect unaffordability recipe.

“The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for homebuying,” said Sam Khater, chief economist at Freddie Mac, in a press statement.

According to the latest S&P CoreLogic Case-Shiller Home Price Index, while U.S. home prices declined in December for the second consecutive month, they jumped 5% year-over-year.

Experts anticipate a slower rise in 2024 home prices than in recent years. The fluctuation will vary regionally and depend strongly on local market supply.

Mark Fleming, chief economist at First American Financial Corp., predicts a “flat stretch” ahead.

“If the 2020-2021 housing market was too hot, then the 2023 market was probably too cold, but 2024 won’t yet be just right,” Fleming said in his 2024 forecast.