This article has been updated to reflect recent changes in the Minneapolis housing market. We’ll be discussing the housing market trends for the Twin Cities Metro Area. Our focus for real estate investment would be the Minneapolis housing market—the entire twin city metro area—and we shall also share the top reasons to invest in this region.
Minneapolis–Saint Paul is a major metropolitan area and is commonly known as the Twin Cities after its two largest cities—Minneapolis and Saint Paul. They’re separated by the Mississippi River. The waterfront is home to many cultural landmarks and coveted waterfront real estate.
ALSO READ: Minnesota Housing Market: Prices & Forecast
Minneapolis Housing Market Trends (City Data)
Below is the latest report on the Minneapolis Housing Market which compares the Minneapolis housing metrics from October 2023 with October 2022.
October Rolling 12 Months Data:
- New Listings: 497 (2022) vs. 483 (2023) -2.8%
- Closed Sales: 371 (2022) vs. 380 (2023) +2.4%
- Median Sales Price: $312,000 (2022) vs. $315,000 (2023) +1.0%
- Average Sales Price: $372,841 (2022) vs. $396,138 (2023) +6.2%
- Price Per Square Foot: $226 (2022) vs. $241 (2023) +6.5%
- Percent of Original List Price Received: 96.8% (2022) vs. 98.1% (2023) +1.3%
- Days on Market Until Sale: 51 (2022) vs. 45 (2023) -11.8%
- Inventory of Homes for Sale: 1,071 (2022) vs. 918 (2023) -14.3%
- Months Supply of Inventory: 2.3 (2022) vs. 2.6 (2023) +13.0%
Analysis of Trends
Examining the data for the Minneapolis housing market in October 2023 reveals several key trends that potential homebuyers and sellers should be aware of.
New Listings and Closed Sales
The number of new listings has experienced a slight decline, decreasing by 2.8% from 497 in 2022 to 483 in 2023. However, closed sales have seen a positive uptick, increasing by 2.4% from 371 in 2022 to 380 in 2023. This suggests a dynamic market with active buyer interest.
Median and Average Sales Prices
The median sales price has shown a modest increase of 1.0%, reaching $315,000 in 2023 from $312,000 in 2022. On the other hand, the average sales price has seen a more substantial rise, surging by 6.2% from $372,841 in 2022 to $396,138 in 2023. This indicates overall appreciation in property values.
Price Per Square Foot and List Price Received
The price per square foot has witnessed a notable increase of 6.5%, jumping from $226 in 2022 to $241 in 2023. Additionally, sellers are receiving a higher percentage of their original list price, with a 1.3% increase from 96.8% in 2022 to 98.1% in 2023.
Days on Market and Inventory
The days on market until sale have decreased by 11.8%, indicating a faster-paced market. However, the inventory of homes for sale has seen a significant drop of 14.3%, potentially contributing to a more competitive environment for buyers.
Months Supply of Inventory
The months supply of inventory has increased by 13.0%, suggesting a shift towards a more balanced market. This metric reflects the number of months it would take to sell the current inventory based on the recent sales pace.
Twin Cities Area Housing Market Trends
Let us also discuss about the recent housing statistics in Minneapolis–St. Paul–Bloomington MN-WI metropolitan area released by the MINNEAPOLIS AREA REALTORS. The area is commonly known as the Twin Cities after its two largest cities, Minneapolis, the most populous city in the state, and its neighbor to the east, Saint Paul, the state capital. In October 2023, the 16-county Twin Cities region witnessed several notable trends in its housing market.
New Listings and Closed Sales
During the rolling 12 months leading up to October 2023, the Twin Cities housing market experienced a 1.1% decrease in new listings, dropping from 69,004 to 59,158. This decline in new listings could impact the overall housing inventory and influence other key indicators.
Closed sales, on the other hand, saw a more significant decrease of 7.9%, falling from 57,854 to 44,654. This could indicate a potential slowdown in the pace of real estate transactions within the region.
Median and Average Sales Prices
The median sales price showed a modest increase of 2.4%, rising from $356,502 to $365,000. In contrast, the average sales price experienced a slightly higher growth rate of 3.0%, climbing from $420,936 to $433,393. These changes suggest a mixed picture in terms of pricing dynamics within the Twin Cities market.
Price Per Square Foot and Percent of Original List Price Received
The price per square foot increased by 4.7%, going from $199 to $208. This metric provides insights into the value of properties on a per-square-foot basis. Additionally, the percent of original list price received saw a marginal change of 0.2%, indicating stability in the negotiation process between sellers and buyers.
Days on Market and Inventory
Days on market until sale increased by 2.8%, going from 36 to 37 days. This uptick may be attributed to various factors, such as shifts in buyer behavior or changes in property desirability. The inventory of homes for sale decreased by 7.7%, reaching 9,348 homes. A lower inventory could potentially drive competition among buyers and impact overall market dynamics.
Months Supply of Inventory
The months supply of inventory, a crucial metric indicating the balance between supply and demand, increased by 15.0%, going from 2.0 to 2.3 months. This rise suggests a potential shift towards a more buyer-friendly market, given the increased supply relative to demand.
Question: Are Home Prices Dropping?
Contrary to concerns about a potential drop in home prices, the data from October 2023 does not strongly support this notion. While there are fluctuations in various indicators, such as new listings, closed sales, and days on the market, the median and average sales prices show moderate growth. However, the increased inventory and months supply of inventory could influence future pricing trends, and stakeholders should monitor these factors closely.
Saint Paul Housing Market Trends (Describes City’s Housing Stats)
According to the report by Minneapolis Area REALTORS®, the Saint Paul housing market has experienced significant changes over the past 12 months, and the October 2023 update provides a detailed overview of key trends.
New Listings and Closed Sales
Examining the data for the rolling 12 months from October 2022 to October 2023, there has been a noteworthy decrease in new listings, witnessing a decline of 10.5% from 324 to 290. Closed sales also experienced a considerable drop, decreasing by 14.7% from 245 to 209 during the same period.
Median and Average Sales Prices
The median sales price in Saint Paul has seen a positive trend, increasing by 5.9% from $255,000 to $270,000. Similarly, the average sales price also witnessed a 5.4% surge from $297,893 to $313,993. This indicates a robust performance in the local real estate market, with rising property values.
Price Per Square Foot
Another key metric, the price per square foot, has seen a modest increase of 2.7% from $196 to $201. This uptick further contributes to the overall positive growth in property values within the Saint Paul housing market.
Percent of Original List Price Received
The data indicates an improvement in the percent of the original list price received by sellers, showing an increase of 1.9% from 98.1% to 100.0%. Despite this positive change, there is a slight decrease in the overall average, with a 0.7% drop from 100.7% to 100.0%.
Days on Market Until Sale
The average days on market until sale have decreased by 18.8%, from 32 to 26. This reduction suggests a faster turnaround for properties in the Saint Paul housing market, indicating increased demand or more efficient selling processes.
Inventory and Months Supply
The inventory of homes for sale has seen a significant drop, decreasing by 18.9% from 562 to 456. The months’ supply of inventory, however, has seen a marginal increase of 5.3%, reaching 2.0. These figures suggest a tightening of the housing supply, potentially influencing market dynamics.
The Minneapolis Housing Market Forecast for 2023-2024
The Minneapolis metro area, which includes Minneapolis-St. Paul-Bloomington is a vibrant and dynamic housing market. According to Zillow, the average home value in Minneapolis-St. Paul-Bloomington is $362,971, indicating a 1.0% increase over the past year. Homes in this area typically go to pending status within 24 days (Data through November 30, 2023).
Market Statistics
- 1-year Market Forecast (November 30, 2023): -3.0%
- For sale inventory (November 30, 2023): 8,904
- New listings (November 30, 2023): 3,158
- Median sale to list ratio (October 31, 2023): 1.000
- Median sale price (October 31, 2023): $354,000
- Median list price (November 30, 2023): $371,633
- Percent of sales over list price (October 31, 2023): 44.9%
- Percent of sales under list price (October 31, 2023): 34.1%
Is It a Buyer’s or Seller’s Housing Market?
Based on the current data and the 1-year market forecast of -3.0%, it can be inferred that the Minneapolis housing market is leaning towards being a buyer’s market. A negative forecast suggests a potential advantage for buyers.
Are Home Prices Dropping?
The median sale price of $354,000 (October 31, 2023) does not indicate a significant drop in home prices. However, the 1.0% increase over the past year suggests a relatively stable market with a slight upward trend in home values.
Will the Minneapolis Housing Market Crash?
While the market forecast is negative, indicating a potential slowdown, it does not necessarily predict a crash. Various factors contribute to market dynamics, and it’s crucial to monitor trends over time. As of now, there is no clear indication of an imminent housing market crash.
Minneapolis Real Estate Investment: Is It A Good Place For Investment?
Minneapolis, located in the state of Minnesota, is a major economic hub in the Midwest region of the United States. The city has a diverse economy with major industries including healthcare, finance, and manufacturing. With a population of over 400,000 and a metro population of over 3.6 million, Minneapolis has a strong demand for housing. If you are considering investing in real estate, here are 5 reasons why Minneapolis might be a good place to invest:
- Strong Rental Property Market: The rental property market in Minneapolis is strong, with high occupancy rates and steady rent growth. The city has a large number of renters, including students from the University of Minnesota, young professionals, and families. Additionally, the city has a strong job market, which supports a steady demand for rental properties.
- Diverse Economy: Minneapolis has a diverse economy that is not dependent on any one industry. The city is home to several Fortune 500 companies, including Target, Best Buy, and General Mills. The city’s strong economy supports a steady demand for housing.
- Affordable Real Estate Prices: Compared to other major cities in the United States, Minneapolis has relatively affordable real estate prices. This makes it an attractive market for real estate investors looking to maximize their return on investment.
- Strong Housing Market: Despite some recent fluctuations, Minneapolis has a strong housing market. According to Zillow, the median home value in Minneapolis is $290,000, up 0.5% from the previous year. Additionally, Minneapolis has a relatively low foreclosure rate, which indicates a stable market.
- Growing Population: The population of Minneapolis has been growing steadily over the past decade, driven by both natural growth and migration. This growing population supports a steady demand for housing in the city.
- Big Student Market: One of the factors that make Minneapolis a great place for real estate investment is the massive student market. With the presence of several major universities and colleges, including the University of Minnesota, Minneapolis Community and Technical College, and Augsburg University, there is a large population of students in the area. These students require housing, which presents an opportunity for real estate investors to invest in rental properties. Investing in rental properties in Minneapolis can be a lucrative business as the demand for student housing is usually high. Additionally, the student market in Minneapolis is not limited to traditional students. The city also has a large number of professionals and individuals pursuing advanced degrees who require housing. This diverse population provides real estate investors with a wide range of opportunities to invest in rental properties.
- The Landlord-Friendliness of Minneapolis: Minneapolis is known for its pro-landlord laws and regulations, which provide a stable and predictable environment for property owners. This means that landlords have more control over their properties and can protect their investments more effectively. For example, the city has laws in place that allow landlords to evict tenants for non-payment of rent or other violations of the lease agreement. This can give landlords peace of mind knowing that they can take action if necessary to protect their property and rental income. Furthermore, the city has relatively low property taxes and a streamlined process for obtaining permits and licenses, making it easier for landlords to manage their properties. Additionally, the city’s rental market is strong, with a high demand for rental properties due to the growing population and a large number of college students in the area. As a result, landlords in Minneapolis can expect to receive a steady stream of rental income, making it a desirable market for real estate investment.
Current Rental Statistics: As of September 2023, the average rent for a 1-bedroom apartment in Minneapolis, MN is $1,420. This is a 16% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Minneapolis remained flat. The average rent for a 1-bedroom apartment increased by 2% to $1,420, and the average rent for a 2-bedroom apartment remained flat.
The Zumper Minneapolis Metro Area Report analyzed active listings last month across the metro cities to show the most and least expensive cities and cities with the fastest growing rents. The Minnesota one bedroom median rent was $1,239 last month. Edina was the most expensive city with one bedrooms priced at $1,710 while Roseville was the most affordable city with one bedroom priced at $1,130.
The best place to buy rental property is to find growing markets. Cities like Maplewood, St. Paul, and Roseville are good for investors looking to get started with rental property ownership at an affordable price. These cities look good for rental property investment this year as rents are growing over there. These trends provide a macro look at the growing rental demand.
Each real estate market has its own unique supply-demand dynamics with unique neighborhoods that present opportunities for investors. Here are the best areas to invest in a rental property in the Minneapolis Metro Area in 2022. Most of these places have the same things in common, including rising rents and increasing property values.
The Fastest Growing Cities For Rents in Minneapolis Metro Area (Y/Y%)
- Maplewood had the fastest growing rent, up 19.4% since this time last year.
- St. Paul rent grew 17.3%, making it second.
- St. Louis Park was third with rent climbing 16.5%.
The Fastest Growing Cities For Rents in Minneapolis Metro Area (M/M%)
- Maplewood had the largest monthly growth rate, up 4.5%.
- Minneapolis was second with rent climbing 2.9%.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Minneapolis and the Twin Cities region.
Consult with one of the investment counselors who can help build you a custom portfolio of Minneapolis turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Minneapolis. Not just limited to Minneapolis or the Twin Cities of Minnesota but you can also invest in some of the best real estate markets in the United States.
All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Minneapolis turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability. Let us know other than the Twin Cities region which housing markets you consider best for real estate investing!
Sources:
- https://www.mplsrealtor.com/
- http://maar.stats.10kresearch.com/reports/lmu
- https://www.mnrealtor.com/buyers-sellers/marketreports
- https://www.zillow.com/Minneapolis-mn/home-values
- https://www.realtor.com/realestateandhomes-search/Minneapolis_MN/overview
- https://www.neighborhoodscout.com/mn/minneapolis/real-estate
