Woodbury MN Housing Market Correction 2022

Woodbury MN housing market appears to be just starting to show the early stages of a housing market correction. Over the past 12-months both new listings (were down 5.1%), and the number of closed sales (were down 9.5%) though the average sale price appreciation is up 13.4% over the same timeframe. I anticipate we will see the average sale price start flat-lining as we continue throughout the rest of 2022. The number of showings per listing had pretty much flat-lined since the beginning of the year, and likely we will see showings decline as we move further into 2022. More sellers are reducing their list prices after going on the market at a faster rate. Mortgage and new construction applications are slowing. More importantly 30-year mortgage interest rates have climbed faster than anticipated to 5.5% and higher pushing more and more potential buyers out of the housing market. The Federal Government is going to continue to raise mortgage interest rates through the end of 2022 to combat inflation. The end result is the supply and demand in the market with too many buyers for the number of listings has just started to reverse and we will start seeing fewer buyers, which in turn will drive home inventory upwards. This will not be happening overnight but likely to happen as we continue into 2022. We are at an inflection point and as we go deeper into 2022 we will likely start to see flat-lining of home prices, and appreciation.