2022 Year in Review: Lake Minnetonka Real Estate Statistics
2022 Year in Review: Lake Minnetonka Real Estate Statistics
In this article, we take a closer look into the Lake Minnetonka real estate market over the past year of 2022. And we will provide insight into what leading voices predict for the year ahead. Before reviewing 2022, note that Lake Minnetonka continues to drive the luxury home market in the Twin Cities and Minnesota.
The 2022 market shift
For 2022, the most significant change the Lake Minnetonka real estate market experienced was decreased sales. -6.3% was the decrease in sales compared to the record-setting year of 2021. This decrease was partly due to the rise in interest rates, which climbed from 3.45% to 6.15%. For the luxury market (based on home sales at $1.4 million and above), the climb in interest rates led to a decrease in lender financing and an increase in cash purchases, totaling 39% of luxury home purchases. This pivot and the continued lack of inventory of homes for sale pushed the increase in home prices for the Lake Minnetonka area sales by 6%. The luxury real estate market for this area experienced a 7.7% increase in sale price year over year. The increase was 4.4% over the past 12 months, not including the luxury market. The demand in the luxury market continued to drive the median days on the market down by -26.9% to 19 days, the lowest in the past 15+ years.
Lake Minnetonka Real Estate Growth
For homeowners looking for more living space, both in the home and in the immediate community, and higher-ranked school districts, the exodus from urban locations to suburban areas continues to drive the demand for the surrounding Lake Minnetonka school districts Orono, Wayzata, Minnetonka, and Westonka. These schools continue to rank at the top in our state and are also nationally recognized, attracting buyers nationwide.
As we move into 2023, current trends show the real estate industry still navigating the impact of rising interest rates, inflation, and labor shortages. The limited supply of inventory is forecasted to continue through the year, leading to upward pressure on home prices, although forecasted at a slower pace compared to what we have experienced over the past two years.
Despite those changes, the Lake Minnetonka housing market is already showing early 2023 signs of continued optimism with sales on and off the water.
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2023 Forecasts for Lake Minnetonka Real Estate
There are cautionary signs at the national level that raise some concerns on our economy. David Arbit, the Director of Economics and Research at (MAAR), Minneapolis Association of Realtors, points to various factors such as the bond market, the yield curve inversion, the stock market, and tech field layoffs as indicators that it's possible the nation is currently in a recession now or may be headed for one later this year. Arbit points out that nobody knows for sure. When comparing our market today to the crash of 2008, it is essential to note that the current low inventory of homes, continued strict lending practices, and low foreclosure rates are in stark contrast to the real estate market 15 years ago and are positive signs that real estate is in a much better place in 2023. Arbit also stated that of the last 4 to 5 recessions, the 2008 crash was the only recession where real estate didn't increase in value. According to Dr. Lawrence Yun, the Chief Economist at the National Association of Realtors (NAR), home prices are forecasted to remain flat in 2023, with the total sales dropping -7%. Predictions for 2024 will see an increase in home sales by 10% over 2023, with sale prices increasing by 5%.
While the Lake Minnetonka real estate market faced some challenges in 2022, there are mixed signs of what 2023 will bring. We will continue to chart our housing market, the progression in mortgage rates, and the economy in Minnesota and nationally. Stay tuned for our statistical updates as we move to the year's midpoint.
Lake Minnetonka's Luxury Real Estate Market Statistics
Median Sales Price
2,100,000
7.7%
Median Days on Market
19
-26.9%
Months Supply of Homes
4
5.3%
Year over year. All Data from NorthstarMLS. Data deemed reliable but not guaranteed.
For additional insight and information, contact Mark and I at 952.641.6500 and we would be happy to provide you with statistics that are directly related to your real estate needs.
Published on 2023-02-16 21:08:35
Paul Johnson
Paul Johnson with Lakes Sotheby's International Realty is a full service, top-tier residential real estate agent in the heart of Lake Minnetonka with a love for real estate marketing and acquisition, technology, creative design and social media.
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