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Duluth Housing Market 2019: Home Prices, Trends & Forecasts

Duluth Real Estate Market 2019 Statistics

Minneapolis gets far more attention than any other city in Minnesota. However, there are benefits to looking beyond the biggest metro area in a state to the secondary markets such as Duluth in Minnesota. If you are looking at buying a house in Duluth as a potential investment opportunity, you must read till the end. Home prices in the Duluth real estate market are expected to rise by 2.5% in 2020. The Duluth housing market is growing rapidly. Let’s take a look at Duluth, Minnesota, the largest American city along Lake Superior.

Duluth, Minnesota is home to a little under a hundred thousand people. This makes it the fourth largest city in Minnesota. However, the Duluth housing market is larger than Duluth itself. The Duluth metropolitan area is home to nearly 300,000 people. The Duluth real estate market can also be seen as half of the Twin Ports area, with Superior, Wisconsin being the other half. Let us now discuss the latest Duluth housing market trends and forecasts for 2019 & 2020 and find out why you should invest in this cash flow rental market.

Duluth Real Estate Market

Original Photo via Pixabay

Duluth Real Estate Market Forecasts 2019 & 2020

The median home value in Duluth is $174,300 on Zillow. Duluth home values have gone up 4.6% over the past year and Zillow’s Duluth real estate market prediction is that the home prices will rise by 2.5% in 2020. The median list price per square foot in Duluth is $222, which is higher than the Duluth Metro average of $192. The median price of homes currently listed in Duluth is $215,000 while the median price of homes that sold is $187,900.

Duluth Real Estate Market Forecast

Graph Credits: Zillow.com

According to LittleBigHomes.com, the Duluth  real estate market forecast for the 12 months ending with the 3rd Quarter of 2019 is positive. Their accuracy of the Duluth real estate market trend prediction is 90%. Accordingly, they estimate that the probability for rising home prices in Duluth is 90% during this period. If this Housing Market Forecast is correct, home prices will be higher in the 3rd Quarter of 2019 than they were in the 3rd Quarter of 2018.

Duluth Housing Market Forecast 2019 – 2021

The Duluth housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The accuracy of the Duluth housing market trend prediction is 87%. Accordingly, LittleBigHomes.com estimates that the probability for rising home prices in Duluth is 87% during this period. If this Housing Market Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.

Check this page each quarter for updates to the Duluth Real Estate Market Forecast.

Duluth Real Estate Market Trends

Duluth real estate market trends indicate an increase of $19,601 (12%) in median home sales year-over-year rise and a 4% rise in median rent per month. The average price per square foot for this same period rose to $152, up from $137. Trulia has 326 resale and new homes for sale n Duluth, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.

The median sales price for homes in Duluth for Jan 25 to Apr 24 was $184,601 based on 178 home sales. Average price per square foot for Duluth was $152, an increase of 11% compared to the same period last year. The median rent per month for apartments in Duluth for Mar 28 to Apr 28 was $1,500.

Duluth Real Estate Market Trends

Graph Credits: Trulia.com

Data by Redfin.com shows that the Duluth housing market is somewhat competitive. Homes in Duluth receive 1 offers on average and sell in around 30 days. The average sale price of a home in Duluth was $318K last month, up 7.8% since last year. The average sale price per square foot in Duluth is $127, up 3.7% since last year. Homes for sale in Duluth typically receive 1 offer. Homes in the Duluth housing market sell for about 2% below list price and go pending in around 30 days. Hot Homes in Duluth can sell for around list price and go pending in around 11 days.

Duluth Housing Market Statistics

  • Median Sales Price: $184,601 (On Trulia)
  • Median Rent Per Month: $1,500
  • Price Per Sqft: $152
  • Median Household Income: $51,774
  • Home Owners: 77%
  • Single Residents: 39%
  • Median Age: 39
  • College Educated: 38%
  • Transportation: 94% people commute by car; public transportation available

There are  692 homes for sale in Duluth, ranging from $2K to $1.4M on Realtor.com. 58 of which were newly listed within the last week. Additionally, there are 105 Duluth rental properties, with a range of $450 to $5.5K per month. In February 2019 the housing market in Duluth, MN is a buyer’s market, which means there are roughly more active homes for sale than there are buyers. Buyer’s markets are generally more advantageous for buyers rather than sellers.

Duluth Housing Market Trends

Sale-to-List Price Ratio: 99.12% | Realtor.com

In February 2019, the median list price of homes in Duluth, MN was $208K, trending up 6.7% year-over-year. The median listing price per square foot was $128. The median sale price was $183.8K. Homes in Duluth, MN sold for approximately the asking price on average in February 2019. On average, homes in Duluth, MN sell after 88 days on the market. The trend for median days on market in Duluth, MN is flat since last month, and flat since last year.

Duluth-Housing-Market-Trend

Graph Credits: Realtor.com

The median list price in Duluth is $382,450 on Movoto.com. The median list price in Duluth went down 5% from April to May. Duluth’s home resale inventories is 30, which increased 15 percent since April 2019. The median list price per square foot in Duluth is $159. April 2019 was $177. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in May.

Duluth Real Estate Market Trend

Graph Credits: Movoto.com

Duluth Single Family And Multi-Family Homes

Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units

As per the data from the real estate company called Neigborhoodscout.com, the median house price in Duluth is $174,264, which indicates that home prices in Duluth are near the national average for all cities and towns. Single family detached homes are the single most common housing type in Duluth, accounting for 60.91% of the city’s housing units. Other types of housing that are prevalent in Duluth include large apartment complexes or high rise apartments ( 21.01%), duplexes, homes converted to apartments or other small apartment buildings ( 12.57%), and a few row houses and other attached homes ( 2.94%).

People in Duluth primarily live in small (one, two or no bedroom) single-family detached homes. Duluth has a mixture of owner-occupied and renter-occupied housing. Currently, there are 196 single family homes for sale in Duluth, MN on Zillow. These include upcoming potential listings such as properties which are in the stage of Pre-Foreclosure. Additionally, there are 41 single family homes for rent in Duluth, MN.

Duluth, MN Foreclosures And Bank Owned Homes

The percent of delinquent mortgages in Duluth is 0.8%, which is lower than the national value of 1.1%, according to Zillow.com. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Duluth homeowners underwater on their mortgage is 8.6%.

  • Foreclosures in Duluth = 57 (RealtyTrac)
  • Homes for Sale in Duluth = 191
  • Median List Price = $196,750 (6% ⇑ vs Feb 2018)

There are currently 57 properties in Duluth, MN that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 191. In March 2019, the number of properties that received a foreclosure filing in Duluth, MN was 57% lower than the previous month and 73% lower than the same time last year.

Home sales for February 2019 were up 0% compared with the previous month, and down 100% compared with a year ago. The median sales price of a non-distressed home in Duluth was $0. The median sales price of a foreclosure home in Duluth was $0, or 0% higher than non-distressed home sales.

Duluth Home Prices And Real Estate Appreciation

Duluth real estate appreciation rates have tracked to near the national average over the last then years, with the annual appreciation rate averaging 1.36% during the period. During the latest twelve months, Duluth real estate appreciation rate, at 6.81%, has been at or slightly above the national average. In the latest quarter, Duluth’s real estate appreciation rate has been 2.63%, which annualizes to a rate of 10.93%.

Importantly, this makes Duluth one of the highest appreciating communities in the nation for the latest quarter, and may signal the city’s near-future real estate investment strength.

The above statistics on real estate appreciation in Duluth were taken from NeighborhoodScout.com. You can visit their page for more information. Relative to Minnesota, their data shows that Duluth’s latest annual real estate appreciation rate is higher than 60% of the other cities and towns in Minnesota.

10 Best Neighborhoods In Duluth For Real Estate Investment

There are 83 schools in Duluth, MN. There are 29 elementary schools, 20 middle schools, 23 high schools and 11 private & charter schools. Duluth is a city in Minnesota and consists of 32 neighborhoods. Some of the best neighborhoods in or around Duluth, Minnesota are Duluth Heights, Lakeside – Lester Park and Kenwood.

Congdon Park has a median listing price of $577.3K, making it the most expensive neighborhood. Lincoln Park is the most affordable neighborhood in Duluth, with a median listing price of $109.5K. Here are the 10 best neighborhoods in Duluth to invest in real estate because they have the highest real estate appreciation rates (List by Neigborhoodscout.com).

Should You Invest in Duluth Rental Properties?

Investing in real estate is touted as a great way to become wealthy. Is Duluth rental property good for investment? Planning to invest in the Duluth real estate market? Many real estate investors have asked themselves if buying a property in Duluth is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.

We have already discussed the Duluth housing market 2019 forecast for answers on why to put resources into this sizzling market. The home prices in the Duluth housing market will be on an upswing all through 2019. The Duluth home prices are expected to rise by 2.5% in 2020. Here are the top 10 reasons to invest in the Duluth real estate in 2019.

1. The Affordable Real Estate

The Duluth housing market is much cheaper than the rest of Minnesota. The average home in the Duluth rental properties costs around $160,000. The state average is more than $210,000. This makes the Duluth real estate market one of the cheapest in the state.

2. The Student Market

Duluth is the central services provider for the area, and this includes education. The University of Minnesota in Duluth is a proportionally larger campus than the UM campus in Minneapolis. Student from across the area come here to attend the only regional medical school and pharmacy school. They can earn degrees in engineering, education and business, as well.

This explains why there are more than ten thousand students in a city of less than a hundred thousand. This creates steady demand for Duluth rental properties near campus and increases rental rates across the Duluth real estate market.

3. A Surprisingly Large Downtown

Downtown in some small towns is several blocks around the City Hall plus a few apartment buildings. Duluth is notable for its mature, surprisingly dense downtown. The waterfront district with a number of tourist attractions, restaurants, retail shops and parks covers ninety blocks. For example, the area hosts the largest freshwater aquarium in the United States.

The DeWitt-Seitz Marketplace contains a mix of retail and office space. This creates a disproportionate demand for condos in the area. It also makes Duluth rental properties in this area attractive to tourists who stay the weekend on the waterfront, whether locals who want to spend the night by attractions or people passing through before driving along the North Shore.

4. The Diverse Economy

One of the points in favor of the Duluth housing market is the diverse economy. Yes, there is a university and regional hospitals. The port is a major employer, and the Duluth International Airport provides jobs and some tourism revenue. There are several major aviation firms in the area.

Cirrus Aircraft alone provides more than a thousand high paying jobs. The Air National Guard is the seventh largest employer in the area. This makes the Duluth real estate market more stable than cities staked to the rise and fall of a particular industry.

5. The Geographic Constraints

The Duluth housing market is rather stable, but it is constrained geographically. You can’t build on Lake Superior. The city of Superior is located to the southeast. Areas like Jay Cooke State Park are off-limits to new construction. The relative lack of buildable area in the Duluth real estate market drives up the price of homes. This is especially true those near the major highways or the waterfront.

6. The Steady Appreciation

Duluth home values increased nearly 5 percent in 2018. They’re expected to go up 2.5% in 2019. The fact that Duluth is a well-established community means that all the good spots to build are already built on. You have to tear something down to build something new. This drives up the cost of new home construction.

Another factor limiting new supply and driving up the cost of existing homes is the high price of labor in the area.

7. The Lack of New Supply

One of the interesting factors contributing to real estate appreciation and growing rental rates in Duluth is the dearth of new inventory. Duluth is seen as a steady state market, so builders aren’t interested in building a new tract of homes a few miles from town.

This explains why the cost of a newly constructed home passed 300,000 in Duluth, and it contributes to the four and five percent annual appreciation of existing homes in a market where demand is modest. Don’t expect this to change in the Duluth real estate market any time soon.

8. The Skewed Real Estate Market

There is strong demand for affordable Duluth rental properties. The normal demand you’d find in any mid-sized city is compounded by the number of students competing for rentals in the Duluth housing market. However, the few new homes being built are mostly for the upscale market.

Nearly 90 percent of new homes in Duluth were built on relatively large lots. They aren’t the cheap starter homes many locals want, forcing them to rent.

9. The Strong ROI

We’ve mentioned how affordable homes are in the Duluth housing market. We’ve brought up the sizable housing market and its effect on demand for Duluth rental properties. What we haven’t discussed is the impact it has on ROI. The average rental rate for a unit in the Duluth metro area is $1140 as of 2018.

The average rent in the Duluth housing market is nearly $1400. This is one of the few metro areas where you can charge much more for downtown rentals than suburban ones. This is primarily due to the students who want to live close to campus.

You could of course charge much more for single family Duluth rental properties. The going rental rate is $2 per square foot. A 2000 square foot home could then rent for up to $2000 a month.

10. The Relatively Better Regulatory Environment

Minnesota is relatively landlord friendly, and it is better than other Midwestern states. There are limits on late fees, and tenants have two weeks before they can be kicked out for not paying the rent. Minnesota requires notice before landlords can enter the property.

On the flip side, Minnesota statutes outlaw rent control. Nor is there even a movement for it in Duluth like there is in Minneapolis. Property taxes are about 1.1% of the value of the property, and this makes the tax bill for Duluth rental properties a bargain.

It is certainly lower than states like Illinois competing to have the highest property tax rate in the country. Minnesota has a high state income tax, but the loss of SALT deductions via federal income tax reform doesn’t affect real estate investors the way they do local home owners.

Duluth Real Estate Investment

Maybe you have done a bit of real estate investing in Duluth, MN but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. If you are a home buyer or real estate investor, Duluth real estate investment definitely has a track record of generating one of the best long term returns in the U.S. through the last ten years. If you invest wisely in Duluth real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.

Most investors naturally gravitate to residential property investment. When looking for the best real estate investments, you should focus on markets with relatively high population and employment growth. Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.

You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Duluth, MN. Forget the Twin Cities and look north to Duluth, Minnesota. It offers cheaper real estate, relatively high rents and a stable housing market that is perfect for investors.

Buying an investment property is different from buying an owner-occupied home. Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor in Duluth, MN is your ability to find great real estate investments in that area.

According to real estate experts, buying in a market with increasing prices, low interest, and low availability requires a different approach than buying in a cooler market.

We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities U.S. growth markets.

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Other Best Places To Invest In Real Estate

Another market that we suggest is the housing market in Palm Bay, Florida. The Palm Bay real estate investment  offers an excellent mix of affordability, slow growth and high returns. Demand for Palm Bay rental houses ranges from those seeking affordable beach homes in retirement to locals who just need a place to live.

Roughly thirty percent of the people living in the Palm Bay real estate market are renters. While this is in line with the national average, it is unusually high given how cheap Palm Bay rental homes would be to buy. This is because per capita income is about 30 percent lower than the national average, and median household income is 20 percent.
A lesser factor in this equation is the growth of Orlando.

The western side of the Palm Bay housing market is on the east side of Orlando’s suburbs. And there are a few people who live here to commute to work in Orlando. The high cost of Orlando housing will slowly drive residents and employers toward Palm Bay.

Another best place to invest in real estate is Baton Rouge, LA. Forget New Orleans and the hope of profiting off its steady stream of tourists. The Baton Rouge housing market isn’t as glamorous, but it offers more affordable properties, a steady rental market, and higher return on the investment.

The Baton Rouge real estate market is notable for how well it ranks on lists of cities with the highest rate and profitability for house flippers. Over 3 percent of all home sales in the Baton Rouge housing market were because of house flippers. Their average profits in 2018 were around $70,000 per house.

This gave the Baton Rouge real estate market the second highest return on the investment for house flippers in the country. If you can turn a single family home into affordable apartments, you’ll be able to earn significant returns in a market desperate for affordable housing.

Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you may fill up the form given here. 

One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.


*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

References:

Student market
https://www.d.umn.edu
https://www.usnews.com/best-colleges/university-of-minnesota-duluth-2388

Affordable real estate
http://www.city-data.com/city/Duluth-Minnesota.html

Diverse economy
https://en.wikipedia.org/wiki/Duluth,_Minnesota#Aviation

Geographic constraints
https://livability.com/mn/duluth

Large downtown
https://livability.com/mn/duluth/real-estate/8-reasons-to-move-to-duluth-mn
https://livability.com/mn/duluth/real-estate/why-duluth-mn-is-a-great-place-to-live

Appreciation
https://www.zillow.com/duluth-mn/home-values
https://www.duluthnewstribune.com/news/4419202-expensive-place-build

Lack of new supply
https://www.duluthnewstribune.com/news/4419202-expensive-place-build

Skewed real estate market
https://www.duluthnewstribune.com/news/4419202-expensive-place-build

The ROI
https://www.zillow.com/duluth-mn/home-values

Regulatory environment
http://www.citypages.com/news/the-newest-battle-coming-to-minneapolis-rent-control/446596693
https://minnesota.cbslocal.com/2018/10/11/minnesota-ranked-as-least-tax-friendly-state-in-us https://taxfoundation.org/state/minnesota                                            https://www.avail.co/education/laws/minnesota-landlord-tenant-law

Market Data, Trends and Statistics
https://www.trulia.com/real_estate/Duluth-Minnesota
https://www.littlebighomes.com/real-estate-duluth.html
https://www.redfin.com/city/6333/GA/Duluth/housing-market
https://www.realtor.com/realestateandhomes-search/Duluth_MN/overview
https://www.realtytrac.com/statsandtrends/mn/saint-louis-county/duluth                  https://www.movoto.com/duluth-mn/market-trends


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