Are you wondering how inflation is impacting the Brainerd Lakes real estate market? In this episode of Brainerd Redefined, we’re going to talk about inflation, interest rates, and how they’re impacting the Brainerd Lakes real estate market. We’ll look at the numbers so you can decide if now is the right time for you to buy.
Rising Interest Rates
We’ve seen a dramatic increase in interest rates since January 1 of 2022. Rates right now are hovering around 6%, while they were at 3% at the start of 2022. This means we’ve seen them double, so there’s a little uncertainty about what’s going to happen to the real estate market.
Jerome Powell, the Federal Reserve Chairman, is expected to come out in mid-July and raise rates again—anywhere from a half to three-quarters of a point. They’ll take a little break in August and come back in September, when we’re anticipating another half to three-quarters of a point. The same goes for October.
Brainerd Lakes Real Estate
So what is that going to do for the real estate market in the Brainerd Lakes area? We’ve been blessed here in the Brainerd Lakes area to see real estate market prices at an all-time high. A third of our buyers are cash, though two-thirds are still borrowing money from the bank to buy their lake home or their current residents.
So what’s going to happen? As inflation prices go up and interest rates go up, it’s going to be harder for first-time homebuyers to purchase their first home. In 2023 in the Brainerd Lakes area, we are predicting a small real estate price correction anywhere from 5-10%. It’s not going to be like we saw in 2008—where we had the real estate market collapse due to all the foreclosures. However, we are going to see a correction.
The Right Time To Buy
Wow is the time for buyers to purchase and take advantage of the historically low interest rates of 6% versus waiting to see where rates are going to be at the end of 2022. I’m predicting that rates are going to be at 7.5% to 8% by the end of the year.
So if you’re thinking of buying a home, we would love to sit down and meet with you. We can go through our buyer’s consultation to find out exactly what you’re looking for—including your wants, your must-haves, and your don’t-wants (which in many cases are just as important as your must-haves).
We have ten really good seasoned buyer’s agents with us. Because of them, we’re able to sell hundreds of homes each year right here in the Brainerd Lakes area. So whether you’re looking for a lake home, an off-water river home, or a home on acreage, we it.
Thank you for watching another episode of Brainerd Redefined, my show all about real estate and living in the Brainerd Lakes area of Minnesota. Make sure to subscribe to my channel so you never miss an episode, and stay tuned to see what I feature next!
