Welcome to my 2024 Richfield housing report! Here is a recap of the past year.
Average single family home prices rose 7.6% from $348,500 to $367,700. Sellers received an average of 1.7% more than their list price during the spring months and the year ended with them still getting a respectable 101% of their list price. Multiple offers were common in the spring months but sellers got fewer offers than years past; maybe 2 - 4 offers compared to 10 - 15+ in 2023. My spring sellers saw offers well above list price while summer and fall sellers mostly saw one, two or three offers. A couple had to settle for a little below list price.
Single family home inventory ended 2024 at a seasonal low of eleven. Of those, six are sold pending inspection. The remaining five have been on the market over 60 days. New listings have already started to hit the market.
The new commission rules that went into effect last August seemed to have little effect on the way consumers transacted real estate. After the dust settled there were basically two changes that carried forward. First, buyer agent commission had to be removed from the MLS. Second, agents were required to sign representation agreements with buyers before they could show any houses. All of my seller clients chose to offer buyers agents a commission at the same rate as before the lawsuit settlement.
5. Home Prices - I expect home prices to flatten out this year, ending somewhere around 3 or 4% appreciation. Much of last years price growth happened the first half of 2024 driven by multiple offers.
4. Interest Rates - It’s said only fools try to predict interest rates, so here I go! All of the research I’ve read seems to point to rates ending the year lower than right now, but the experts disagree on how much lower. Personally, I think rates will hover in the 6’s all year.
Overall, I expect 2025 to be a relatively stable market becoming slightly more balanced between buyers and sellers. Sellers need to carefully prepare their homes for the market and not assume they will get multiple offers. As always, choosing the right price will be crucial.
If you’re considering a move this year, call me today. Everyone’s situation is different and I would be happy to help you explore your options.
Steve Schneeberger
612-581-7313
Here are my predictions for 2025.
- Sales - Single family home sales bounced back 11% from a five year low. Last year we had 367 sales compared to 331 in 2023. That’s still down from 402 units in 2022, 531 in 2021 and 472 home sales in 2020. I predict unit sales will increase by another 10 - 12% this year.
- Inventory - Inventory levels will likely increase in 2025 but not dramatically. Most experts predict a 10 - 12% rise in new listings compared to 2024. Homeowners who are sitting with 3-5% interest rate mortgages will still be reluctant to enter the housing market. Also, the 40% of Minnesota homeowners who own their homes free and clear will likely not be motivated to sell. There may be more step up buyers, those selling their smaller Richfield houses and moving to larger suburban homes. People with growing families who were waiting for interest rates to improve will likely move this year regardless of rates.