When Kathy and Jason Hedin listed their home for sale this past summer, they thought the right moment had finally arrived.
The Hedins had wanted to sell their house on St. Paul's West Side for a few years but didn't think they could unload it at a profit. During the summer, they kept hearing about kept hearing about the "crazy" sellers market and prices climbed high enough to compel them to list their home.
"At that time, friends who were selling their homes, and colleagues, were like 'Oh! It sold in two days; it sold in a week.' And we were super excited," she said. "We thought that's what's going to happen to us. But it didn't."
Their experience isn't an isolated one. The once-hot Twin Cities housing market has been confusing sellers, buyers and agents lately. In September, there were unusual sales declines, according to preliminary data from the Minneapolis Area Association of Realtors, which releases official numbers for the full month this morning.
The Hedins are still waiting for the right buyer to come along so they can follow through on a new home they want to have built. They've lowered their list price, but have had no offers yet.
Meanwhile, they're keeping their house ready for showings -- with two small children underfoot.
Kathy Hedin said when people come to look at the place, the comments they share are telling.
"We've had a few people come who were like 'We love the house, but we're just waiting for ours to sell.' We're all waiting for the next person to purchase so we can all move on," she said.
The Hedins have plenty of company.
Lots of people involved in the housing market say it still has vigor but has been slowing down. Some say they noticed the market turn down before September -- around the time the Hedins listed their home for sale.
"Things started falling off really in mid July going into August," said David Jagerson, a realtor with Coldwell Banker Burnet.
Jagerson said sales were brisk earlier in the year and then dropped off partly because there was so much pent-up demand unleashed last spring. That really motivated buyers.
"These were the people who wanted to move 5 and 7 years ago," he said. "They were the first in the market."
Rising mortgage rates also played a big role in boosting sales in the first half of the year. Between May and September, the average 30-year mortgage rate climbed from about 3.5 percent to about 4.5 percent. Rates are now starting to fall, but many buyers dove into the market at the first sign of a rate spike so they could lock in financing before rates climbed more.
Haakon Nelson and his wife made an offer on a home in St. Paul in May-- and got it. They could have waited a few more months to act, but Nelson said they wanted to respond with urgency.
"We knew interest rates were at a record low so there were these things that made us feel like we should act more quickly," Nelson said. "It felt like there was a lot of momentum and a push that we should get something sooner rather than later. If something popped up, we wanted to be proactive."
Mortgage rates are still at historic lows. But the fact that they're higher than in the spring makes it harder to price homes appropriately today.
Sophia Thu Pham, a realtor with RE/MAX in the eastern Twin Cities metro area, said some sellers are looking at sales of comparable properties that sold in the spring, thinking they can get a similar amount for their homes. But Pham said that's not true when the mortgage rate is higher.
"When it goes up one percentage point, that's about a 10-percent reduction in what a buyer can afford," she said. "Sellers just have to be able to shift their pricing to accommodate the shift in the market and the shift in the interest rate." Pham said when home sellers she represents come to accept a lower sale price than they'd hoped for, their homes do sell.