Thinking about selling or buying this spring? Here are some insights into the current market conditions in the Brainerd Lakes area.

In real estate, negotiations often resemble a game of poker. It’s hard to know what the other party holds in their hands. However, by analyzing market trends and broader issues, you can gauge the situation better, increase your odds of success, and have more confidence in decision-making. As someone who loves into real estate and possibly over thinks some of this, I find dissecting market trends somewhat like surfing or studying meteorology. Understanding patterns can forecast market trends help buyers and sellers make the best judgments on when to jump in. There are two cycles we watch. Year after year and seasonal.

Our local market is primarily influenced by two key factors: a persistent shortage of inventory compared to potential buyers and an influx of out-of-state and folks moving up from the Cities. Over the past few years, over 50% of properties sold have been purchased by out-of-state buyers, particularly evident in lakefront homes, driving prices upward. Additionally, migration from larger cities in Minnesota continues to apply pressure. Predictions suggest a looming housing shortage over the next decade, indicating little likelihood of market softening in our area. While politics and the interest rates this coming year will certainly affect the economy, supply and demand will remain the primary driver.

I have felt that traditionally, some buyers and sellers can take advantage during the off-season due to reduced inventory, translating to less competition.  However, as spring approaches, an influx of listings comes up; however, the number of buyers per listing tends to go up at an even greater rate, increasing competition for an individual listing.   This spring, we’ve witnessed a 25% increase in inventory from January to February, I expect that to increase even more through spring.  

Apart from inventory, sales prices play a crucial role. Although interest rates are expected to stabilize or decrease this year, median home prices have surged by about 15% compared to the previous year, reaching $350K. Unfortunately, this pricing trend poses challenges for younger buyers, with the average buyer age nearing 50. Nevertheless, we have had a number of recent success stories of younger buyers negotiating deals even with the housing crunch. Much of success on the buyer’s side comes down to the agent’s willingness to move fast, not only in looking at a property when it comes up, but in quickly analyzing how much negotiation is possible if the buyer wants to make a deal.

For sellers, it remains an over easy market. In such scenarios, MN Real Estate and Management is known for achieving high average sales prices. We emphasize aggressive pricing and several other strategies to maximize returns. For the average seller, choosing the right seller agent can be the difference of tens of thousands of dollars in a seller’s bottom line. We always suggest shopping your agent. Choosing the right agent is another conversation, but here I will just mention that some seller agents want to list the property for the lowest amount possible to get a quick easy sale, others will pump up an unrealistic price to try to win the listing. I will write an article on my thoughts at that at some point.

If you have any questions or need guidance, feel free to reach out. You will NEVER get pressure from us! We simply advise to the best of our abilities and let our clients decide what is best for them. With years of brokerage experience, we’re equipped to provide valuable insights and assistance tailored to your goals.

Market Data:

  • Baxter: $320K (Jan 2024) to $344.5K (Feb 2024), indicating a 7.7% increase.
  • Brainerd: $265.3K (Jan 2024) to $278.2K (Feb 2024), showing a 4.9% rise.
  • Inventory Change: From 94 (Jan 2024) to 116 (Feb 2024), marking a 23.4% increase.

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