Zillow forecasts home prices will decline in the Twin Cities in 2024
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Home prices haven't fallen in the Twin Cities since 2011. Zillow predicts that streak is going to end this year.
What they're saying: The real estate platform says the Twin Cities will be one of the five coolest housing markets in 2024 and that prices will fall by 3% this year.
Why it matters: When coupled with the prospect of declining mortgage rates — they've already fallen from nearly 8% in October to 6.75% — this would be good news for first-time home hunters who've been sidelined by the exploding costs of buying.
- But for current homeowners, a 3% decline would mean lost equity — about $10,000 for a median-priced home in the metro area.
What they're saying: Zillow senior economist Nicole Bachaud cited an increasing supply of existing homes hitting the market in the Twin Cities as to why it expects prices to cool. New listings in the metro were up 5.3% in November, according to Minneapolis Area Realtors data.
Yes, but: Not everyone agrees with Zillow's outlook.
The other side: Federal Reserve Bank of Minneapolis housing expert Libby Starling has consistently said she doesn't expect a significant decline in prices in the Twin Cities, and she told Axios last week that remains her outlook. "I'm still going to say that I think we're going to see stable prices," she said.
- The question, Starling added, is what happens when interest rates fall in 2024 and more people start selling and buying houses.
- "Will there be so much pent-up demand that it keeps the prices, even at the lower end of the market, high?"
Minneapolis Area Realtors director of research David Arbit said that if interest rates stay close to 6%, he expects prices to rise 2% to 4%.
What to watch: The market in the Twin Cities tends to pick up after the Super Bowl. That should offer a better picture of where prices are going.