Minnesota housing market: Everything you need to know
Known as the Land of 10,000 Lakes, Minnesota is a haven for nature enthusiasts who enjoy the state’s many options for fishing, boating and beautiful water views. But outdoor recreation isn’t the only thing that’s big here: Minnesota has the third-highest homeownership rate of any state in the country, at 75.1 percent, meaning more than three-quarters of all Minnesotans own their home. Impressive!
Whether you’re moving to, from or within the state, it helps to understand what’s going on in the Minnesota housing market. Keep reading to learn more about the state’s real estate landscape.
Minnesota housing market overview
In Minnesota, new listings and closed sales have been slowing down, in large part because of today’s sky-high mortgage rates. But despite this decline in overall activity, housing prices are still rising across the state.
With that said, there are big differences within the local housing markets around Minnesota, according to July 2023 data from Minnesota Realtors. For example, in the Twin Cities region — which comprises the seven counties surrounding Minneapolis–St. Paul — the median home sale price is $380,000, and properties are selling just above list price and spending 23 days on the market before going to contract. In the South Central region, though, the median is $253,500 and homes sell for just below list price. And in the Upper Minnesota Valley, the median price is just $136,500 and homes take a long 51 days to sell.
Minnesota housing trends and stats
- As of July 2023, the median home sale price in the state was $342,995, according to Minnesota Realtors.
- That’s a 0.9 percent jump from last year. Still, it’s a fair bit cheaper than the national median of $407,100.
- The amount of closed sales is down 19 percent year-over-year, and the amount of new listings is down 14.6 percent.
- The sales-to-list price ratio in Minnesota is 100.1 percent, meaning that sellers are typically receiving just over full asking price for their properties. It’s a slight drop from last year’s 101 percent.
- Homes spend about 28 days on the market before they’re sold, up from 25 days in July 2023.
- According to data from ClosingCorp, typical closing costs in Minnesota are 1.4 percent of a home’s sale price — which would come out to $4,802 for a median-priced $342,995 property.
Should you buy or sell in the Minnesota housing market?
If you’re trying to decide whether it’s the right time to enter the Minnesota housing market, here’s what buyers and sellers should consider.
If you’re a home seller
Selling a home in Minnesota right now certainly has its upsides. Prices are increasing, and properties are selling above list price — not by much, but full price is full price. On top of that, the state is a seller’s market, with supply far too low to meet demand. According to Minnesota Realtors, there was a 2.3-month supply of housing inventory available in July, well below the 5-to-6-month supply required for a balanced market.
Even with these factors working to your advantage, though, it’s still important to be smart about how you go to market. You’ll want to have a solid understanding of how much your house is worth and price it appropriately. Work with a local real estate agent to get an accurate idea of your home’s value: They’ll be able to pull comps of properties like yours that have sold recently nearby, so you can get better insight into the market in your specific part of Minnesota.
If you’re a homebuyer
While the market favors sellers at the moment, there is some positive news for hopeful homebuyers in Minnesota. The supply of inventory to choose from is low, but it has actually increased by 15 percent since last year. And the length of time that houses spend on the market has gone up by 12 percent, meaning you don’t have to make a super-rushed decision. They’re modest changes, but they show that buyers may be gaining more power in the Minnesota market.
When you’re buying in a seller-friendly environment, you’ll want to be as prepared as possible before you enter the market. This means getting preapproved for a mortgage before you start house-hunting, so that you have a good idea of how big of a mortgage you’re likely to qualify for. Your preapproval letter will also increase your standing with sellers, as it shows that you are a serious buyer. Bankrate’s new-house calculator can also help you figure out how much house you can afford.
And whether you’re moving within Minnesota or coming from out-of-state, get familiar with any cost of living differences in your current city versus your new one. The price of day-to-day necessities beyond just housing can vary greatly depending on your location.
Minnesota housing market predictions
Home values and interest rates have skyrocketed in the last several years, which led many people to fear that a potential housing market crash was imminent. But experts don’t believe that’s in the cards. Real estate activity has certainly slowed in Minnesota this year, with fewer listings and sales (as is the case in many other states as well). However, prices remain stable and are in fact increasing, with low inventory and high demand. As a result, a crash does not look likely.
Find a Minnesota real estate agent
Even in the best of times, navigating the Minnesota housing market can be complicated — but it’s especially tricky now, after the wild ride of the past few years. To make buying or selling easier, it’s a good idea to hire a local real estate agent who understands your neck of the Minnesota woods.
Agents are licensed professionals who can help you secure the best deal, no matter which side of the transaction you’re on. If you’re buying, they’ll track down properties that meet your criteria and budget, help you put together competitive offers and negotiate with sellers. If you’re selling, they can advise you on pricing, organize open houses and field offers from prospective buyers.
FAQs
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No. In the past year, home prices throughout the state have increased by 0.9 percent, according to Minnesota Realtors. The statewide median sale price was $342,995 in July 2023, compared to $339,900 in July 2022.
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Currently, Minnesota is a seller’s market, with only a 2.3-month supply of housing inventory available. It would take 5 or 6 months’ worth of inventory for a balanced market, and when there is not enough supply to meet demand, the power is in the seller’s hands.
