3 min read September 2022 — Minneapolis Area REALTORS® is the largest local Realtor® association in Minnesota. In an interview with Invest:, President Denise Mazone discussed highlights and milestones, opportunities in the real estate industry, aspects first-time homebuyers must consider, trends, rent-control ordinances, shifts in demand and the near-term outlook.
What have been some of the key highlights for Minneapolis Area REALTORS® for the past year and how do you see priorities aligning for the rest of the year?
We are currently working on our 2023-25 strategic plan with a focus on improving our member experience, diversifying revenue to ensure the long-term viability of the association and continuing our commitment to homeownership for all. A big step toward our fair housing goals is taking responsibility for our role in creating a huge gap in homeownership in the BIPOC community, especially in the Black community, and working to enact policies and procedures to reduce that gap.
We are also committed to improving the association’s broker support. We have four to five large brokers operating in the Twin Cities and over 10,000 agents in our area with most of them in offices of one to five members. They need help. On a national level, we are putting together toolkits to help small brokers that don’t get the same assistance as those who are affiliated with the larger, national brands.
Considering the landscape, what are the opportunities for the real estate industry in the region?
As an agent there’s a huge opportunity to team up with people who are helping to close the racial disparity gap in homeownership. I spend a lot of time with first-time homebuyers and the best thing I can do is connect them with down payment assistance programs. Sometimes agents, especially from larger brokers, don’t get the same commission if their clients use this assistance, so they may avoid using it. Recent efforts to update the Community Reinvestment Act are designed to move people forward but it is still slow. You must have boots on the ground and meet people where they are at. With first-time buyers you need to hold their hand and help them through the process.
What key aspects should first-time homebuyers be aware of?
The median home price is $375,000, which is not a first-time homebuyer’s price. And even the homes my first-time homebuyers thought they could afford may be out of reach due to rising interest rates. What I say to them is that it doesn’t have to be your forever home. Everybody wants the three-bedroom, two-bath, two-car attached garage with a basement, I understand that. But if they get a two-bedroom home, frame up a room and put in an egress window in the lower level, they can instantly build equity in their home. If I can change their mind, I’ll be able to close the homeownership gap a bit.
What are some of the trends you are seeing in the Twin Cities?
We’re seeing declining sales across the board with condo sales experiencing the biggest drops. This could be a sign of a correction in the market. In addition, rising interest rates are decreasing people’s buying power. Right now, I’m working on a mixed-use development, and what I can see is the importance of finances being in place due to higher interest rates and also construction costs. We also need more rental units, especially affordable rental units, in the market.
What are your thoughts on rent control ordinances?
In my opinion, seeing everything that is going on, rent control ordinances will cause a drop in housing inventory. We are at 1.7 months of inventory and we need four to six months of inventory to be a balanced market. Restricting rent increases will create a bigger inventory problem by discouraging housing providers from entering the market. But even bigger problems than rent control are property tax increases and wages that are not keeping up. With 17 to 20% hikes in property taxes, we should be looking at how to manage those, not putting rent control in place.
What areas are experiencing the most demand?
Demand is high everywhere, from the suburbs to the city. I tell families that if they see a house they like, they will need to make an offer right away. If the price is right, I don’t care where it is, it will be sold right away. I have a family that just lost two homes because they couldn’t make their decision right away. I told them to call me when they are ready to decide and we can start looking again. It’s pretty hot everywhere from Coon Rapids to New Prague. The main concern is pricing, not location.
What steps would you like the community to take to address the prevalent issues?
We need to have an even playing field. When we talk about diversity, equity and inclusion (DEI), it is not just about being invited to the dance but about being asked to dance as well. With that said, I’d like to continue to push forward our work to bridge the racial gap in homeownership. I see people who have never dreamed of owning their own home. They feel hopeless, nobody has told them they can do it, and that is where I spend my time: taking people through the process of what they need to do for home ownership.
What is your near-term outlook for the region?
We anticipate that sales declines will likely level out and price gains will also moderate in the near term with fewer offers and homes spending a little more time on the market before they are sold. Looking further out, the housing market is expected to remain strong, especially given our relatively low unemployment rate, highly educated workforce and great schools. And though it has declined, affordability in the Twin Cities remains better than most comparable regions.
Lastly, I don’t want people to think DEI efforts are a fashion; they are here to stay. The murder of George Floyd had a major impact on our city. We need to continue to press on and bridge that gap of homeownership in the BIPOC community, especially in the Black community where we have the largest disparity.
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