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Minneapolis Housing Market 2019: Home Prices, Trends & Forecasts

Minneapolis, MN Real Estate Market 2019 Statistics

If you’re keen to invest in your future in the Minneapolis real estate market 2019 and buy before prices become out of reach, you must peruse till the end. Minneapolis is one half of the Twin Cities; the other half of the pair is St. Paul. They’re separated by the Mississippi River. The waterfront is home to many cultural landmarks and coveted waterfront real estate. Let’s learn more about Minneapolis before reviewing the ten reasons to invest in the Minneapolis real estate in 2019.

Minneapolis by itself is home to more than four hundred thousand people, making it the largest city in the state of Minnesota and the larger of the Twin Cities. The Twin Cities metro area includes more than three and a half million people, making it the sixteenth largest metro area in the U.S. and third largest in the Midwest. But unlike much of the Rust Belt, Minneapolis is going strong. This is but one reason to take another look at the Minneapolis housing market.

Minneapolis Real Estate Market

Original Photo via Pixabay

If you are a home buyer or an investor in the Twin Cities real estate market, Minneapolis definitely has a track record of being one of the best long term real estate investments in the U.S. through the last ten years or so. In fact, in the Midwest, the Minneapolis housing market ranks highest when it comes to positive market outlook. In 2016 Minneapolis had moved into the top 20 emerging real estate markets in the country. Now let’s take a close look at the Minneapolis real estate market trends and forecasts for 2019 & 2020 find out why it is one of best places in the Midwest to invest in real estate.

Minneapolis Real Estate Market Forecasts 2019, 2020 & 2021

The median home value in Minneapolis is $265,900 on Zillow. Minneapolis home values have gone up 5.2% over the past year and their Minneapolis real estate market prediction is that the prices will rise 4.1% within the next year. The median list price per square foot in Minneapolis is $267, which is higher than the Minneapolis-St. Paul-Bloomington Metro average of $198. The median price of homes currently listed in Minneapolis is $315,000 while the median price of homes that sold is $257,500. The median rent price in Minneapolis is $1,790, which is higher than the Minneapolis-St. Paul-Bloomington Metro median of $1,700.

Minneapolis Real Estate Market Forecast

Graph: Zillow.com

According to LittleBigHomes.com, the Minneapolis real estate market forecast for the 12 months ending with the 3rd Quarter of 2019 is positive. Their accuracy of the Minneapolis real estate market trend prediction is 92%. Accordingly, they estimate that the probability for rising home prices in Minneapolis is 92% 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.

Minneapolis Housing Market Forecast 2019 – 2021

The Minneapolis housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The accuracy of the Minneapolis housing market trend prediction for Minneapolis is 87%. Accordingly, LittleBigHomes.com estimates that the probability for rising home prices in Minneapolis 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 Minneapolis Real Estate Market Forecast.

Minneapolis Real Estate Market Trends

Minneapolis real estate market trends indicate an increase of $16,250 (7%) in median home sales and a 3% rise in median rent per month over the past year. The average price per square foot for this same period rose to $233, up from $223. Trulia has 1,104 resale and new homes for sale in Minneapolis, MN, 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 Minneapolis for Jan 11 to Apr 10 was $257,000 based on 730 home sales. Average price per square foot for Minneapolis was $233, an increase of 4% compared to the same period last year. The median rent per month for apartments in Minneapolis for Mar 10 to Apr 10 was $1,850.

Minneapolis Real Estate Market Trends

Graph Credits: Trulia.com

As per the real estate company named Redfin, the Minneapolis housing market is very competitive. Homes in Minneapolis receive 2 offers on average and sell in around 34 days. The average sale price of a home in Minneapolis was $271K last month, up 10.6% since last year. The average sale price per square foot in Minneapolis is $166, up 7.8% since last year. Homes typically receive 2 offers. Homes for sale in the Minneapolis housing market sell for about 1% below list price and go pending in around 34 days. Hot Homes for sale in Minneapolis, MN can sell for about 2% above list price and go pending in around 13 days.

Minneapolis Housing Market Statistics

  • Median Sales Price: $257,000 (On Trulia)
  • Price Per Square Ft: $233
  • Median Rent Per Month: $1,850
  • Median Household Income: $51,098
  • Home Owners: 57%
  • Single Residents: 48%
  • Median Age: 34
  • College Educated: 51%
  • Transportation: 80% people commute by car; public transport is available

There are 3,895 homes for sale in Minneapolis, MN, ranging from $9.1K to $6M on Realtor.com. 492 of which were newly listed within the last week. Additionally, there are 932 Minneapolis rental properties for sale, with a range of – to $10K per month. In February 2019 the housing market in Minneapolis, MN was a balanced market, which means there was a healthy balance of buyers and sellers in the market.

Minneapolis Housing Market Trends

Graph Credits: Realtor.com

In February 2019, the median list price of homes in Minneapolis, MN was $299.9K, flat year-over-year. The median listing price per square foot was $166. The median sale price was $255.5K. On average, homes in Minneapolis, MN sell after 67 days on the market. The trend for median days on market in Minneapolis, MN is flat since last month, and flat since last year.

Minneapolis Housing Market Trend

Graph Credits: Realtor.com

The median list price in Minneapolis is $349,900 on Movoto.com. The median list price in Minneapolis went down 2% from March to April. Minneapolis’s home resale inventories is 709, which increased 6 percent since March 2019. The median list price per square foot in Minneapolis is $237. March 2019 was $234. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in April.

Minneapolis Real Estate Market Trend

Graph Credits: Movoto.com

Minneapolis Single Family And Multi-Family Homes

As per the data from the real estate company called Neigborhoodscout.comthe median house price in Minneapolis is $276,925, which is above the national average. Single family detached homes are the single most common housing type in Minneapolis, accounting for 42.93% of the city’s housing units. Other types of housing that are prevalent in Minneapolis include large apartment complexes or high rise apartments ( 39.84%), duplexes, homes converted to apartments or other small apartment buildings ( 13.14%), and a few row houses and other attached homes ( 3.90%).

People in Minneapolis primarily live in small (one, two or no bedroom) single-family detached homes. Minneapolis has a mixture of owner-occupied and renter-occupied housing. Currently, there are 540 single family homes for sale in Minneapolis, MN on Zillow. These include upcoming potential listings. Additionally, there are 204 single family homes for rent in Minneapolis, MN.

Minneapolis, MN Foreclosures And Bank Owned Homes

Foreclosures will be a factor impacting home values in the next several years in Minneapolis. In Minneapolis 2.0 homes are foreclosed (per 10,000). This is greater than the Minneapolis-St. Paul-Bloomington Metro value of 0.8 and also greater than the national value of 1.2.

The percent of delinquent mortgages in Minneapolis is 0.5%, which is lower than the national value of 1.1%. 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 Minneapolis homeowners underwater on their mortgage is 6.3%, which is higher than Minneapolis-St. Paul-Bloomington Metro at 5.0%.

  • Foreclosures in Minneapolis = 649 (RealtyTrac)
  • Homes for Sale in Minneapolis = 1,358
  • Recently Sold = 446
  • Median List Price = $279,900 (6% ⇑ vs Feb 2018)

There are currently 649 properties in Minneapolis, MN that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 1,358. In March, the number of properties that received a foreclosure filing in Minneapolis, MN was 2% higher than the previous month and 60% 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 Minneapolis, MN was $0. The median sales price of a foreclosure home in Minneapolis, MN was $0, or 0% higher than non-distressed home sales.

Minneapolis Home Prices And Real Estate Appreciation

Minneapolis real estate appreciated 31.09% over the last ten years, which is an average annual home appreciation rate of 2.74%, putting Minneapolis in the top 20% nationally for real estate appreciation.

Real estate appreciation rates are so strong in Minneapolis that despite a nationwide downturn in the housing market, Minneapolis real estate has continued to appreciate in value faster than most communities. Looking at just the latest twelve months, Minneapolis real estate appreciation rates continue to be some of the highest in the US, at 8.19%, which is higher than appreciation rates in 80.34% of the cities and towns in the nation.

Based on the last twelve months, short-term real estate investors have found good fortune in Minneapolis. Minneapolis real estate appreciation rates in the latest quarter were at 1.70%, which equates to an annual appreciation rate of 6.98%.

The above statistics on real estate appreciation in Minneapolis were taken from NeighborhoodScout.com. You can visit their page for more information. Relative to Minnesota, their data shows that Minneapolis’s latest annual real estate appreciation rate is higher than 80% of the other cities and towns in Minnesota.

10 Best Neighborhoods In Minneapolis For Real Estate Investment

There are 699 schools in Minneapolis, MN. There are 231 elementary schools, 176 middle schools, 202 high schools and 90 private & charter schools. The Minneapolis school system offers a wide range of school choices, from charter schools to great public schools, to those specializing in STEM education. There are 264 neighborhoods in Minneapolis. Linden Hills has a median listing price of $613,500, making it the most expensive neighborhood. Jordan is the most affordable neighborhood in Minneapolis, with a median listing price of $177,000.

These are the 10 best neighborhoods in Minneapolis to invest in real estate because they have the highest real estate appreciation rates (List by Neigborhoodscout.com).

Should You Invest In The Minneapolis Real Estate In 2019?

Investing in real estate is touted as a great way to become wealthy. Is Minneapolis rental property good for investment? If you are looking to buy Minneapolis investment properties, then you must read this. These things make Minneapolis real estate market stand out when it comes to choosing a place to invest in 2019 and beyond. We have already discussed the Minneapolis housing market forecast for answers on why to put resources into this sizzling market in 2019.

The home prices in the Minneapolis housing market will be on an upswing all through 2019. The Minneapolis home prices are expected to rise by 4.1% in 2020. So you should consider investing in Minneapolis rental properties sooner, to avoid higher home prices down the road.

Here are the top 10 reasons to invest in the Minneapolis real estate in 2019.

1. The Strong Job Market

We touched on the strong Minneapolis job market. The Twin Cities job market has been revived by a wave of jobs in the life sciences, biotechnology and medicine. This has helped to give workers in Minneapolis an average annual salary six thousand dollars higher than the national average.

The city even made a “The Ladders” list for cities with the most $100,000 plus jobs. That fuels demand for Minneapolis rental properties at the more expensive end of the market.

Yet their location on the Mississippi River and other transit routes contributes to a diverse job ecosystem, where employers like 3G and General Mills maintain manufacturing and food processing hubs. People move here from across Minnesota in search of work, since their unemployment rate is consistently one full percentage point lower than the national average.

2. The Strong Demand for Housing

Housing markets can be large and declining – Detroit being a shining example. Minneapolis is notable for being a growing city, driving demand for properties in the Minneapolis real estate market. T

he population growth is driven by both migration to the area by those seeking jobs and demographic momentum. This is why the Minneapolis housing market is expected to see 4.6% appreciation this year according to some reports.

3. The Decent Rate of Appreciation

One of the defining features of older Rust Belt cities is that they’ve been heavily built up for decades. In the case of the Minneapolis housing market, geography and existing construction constrain new housing supply. They can’t build on water or build out in the direction of St. Paul.

The city already has suburbs, but people don’t want to move too far out from the urban core where most jobs exist. This forces builders to tear down old buildings to bring new, denser development to the Minneapolis housing market.

That is more expensive than building new homes on farmland. All of this constrains new construction. It also explains why Zillow thinks home prices will rise 5.2% in 2019. Another source said appreciation would be closer to 4.6%. Either way, it is well above the rate of inflation.

4. The Affordability of the Real Estate Market

The median home price in the Minneapolis real estate market was around $230,000 in 2018. This price puts Minneapolis rental properties in line with the national average. It also means you can buy several properties in the Minneapolis housing market for the cost of one home in a “hot” market like San Francisco or Los Angeles.

5. The Higher than Expected ROI

The median rental price in Minneapolis is roughly $1800. This is higher than the Minneapolis metro area rental rate of $1700. Given the appreciation seen in the Minneapolis real estate market, we can expect rental rates to increase faster than the rate of inflation because new construction isn’t going to meet demand.

6. The Massive Student Market

Any university creates an excellent opportunity for real estate investors. Every college brings in a large number of students who will need to rent property close to the university. The rents students pay are based on demand for the school, not the state of the local economy.

For investors targeting this niche, Minneapolis rental properties are a great addition to your investment portfolio because of the diverse opportunities this market provides.

There are a number of colleges in Minneapolis itself. Augsburg College hosts more than three thousand students. Capella University has more than thirty thousand. Smaller arts and technical colleges dot the town.

Because so many colleges are in the middle of the city, downtown Minneapolis rental properties could be advertised to students at several schools. Then, if the local college of arts and design closes, you don’t have to worry about who else may rent the units.

7. The Growing Rental Pool

The Minneapolis real estate market is affordable compared to a number of booming rental markets across the country. However, the fact remains that the rental market in Minneapolis is growing.

Many would-be home buyers cannot afford to buy their first home, so they have to rent. Students who stay to work compete with economic migrants and the children of locals. Compounding the matter are the Millennials who watched parents lose homes in the 2007 housing bust and choose to rent though they could afford a home. T

his explains why the city’s share of the population that rents has grown from 49% to 53%. And this trend will fuel demand for Minneapolis rental properties for years to come.

8. The Landlord-Friendliness

Many states in the Midwest are more tenant friendly than landlord-friendly. The Minneapolis housing market, though, is more landlord friendly. There are limits on late fees, and interest is required on deposits. However, no rental license is required by the state, and there isn’t a grace period set in stone for late rental payments.

You can protect your income from Minneapolis rental properties by evicting tenants not only for nonpayment of rent but committing illegal acts on the premises, staying after the lease has ended, and breach of lease.  Just make sure the lease agreement says what actions constitute a breach of lease for which they could be evicted.

9. The (Relatively) Low Taxes

Houses in Minnesota face an average 1.19% property tax rate. This is very close to the national average of 1.21%. Wisconsin’s tax rate is in this same range, but their higher average property values mean they pay far more in property taxes than those in the cheaper Minneapolis real estate market.

Minnesota’s reputation as a high tax state is driven by its higher sin taxes on alcohol and cigarettes and higher than average sales tax rate. Neither of these affects most real estate investors.

Its income taxes are thirteenth highs in the U.S., but it is a bargain compared to states like Illinois. Then again, Illinois has the second highest property taxes in the country.

10. The Upward Long-Term Trajectory

Both Wisconsin and Minnesota are seeing growth while much of the Rust Belt deteriorates. However, Minnesota’s policies have led to faster job growth, wage growth, and population growth than Wisconsin.

Yet the state has continued to rank well in rankings for quality of life. That makes the Minneapolis real estate market a better deal than property in theoretically more business friendly Wisconsin.

Minneapolis Real Estate Investment

Maybe you have done a bit of real estate investing in Minneapolis, 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 invest wisely, 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 Minneapolis, MN. Minneapolis offers an ideal mix of a strong job market, affordable real estate, large rental market and limited housing supply. These factors will drive up property values and rental rates growing at a healthy clip for years.

Buying an investment property is different from buying an owner-occupied home. Investment properties are designed to make money as rentals, which means you must look at it solely as an income producing entity just like any other business.

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 is your ability to find great real estate investments.

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.

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Here Are Some Other Markets To Invest In Real Estate

Apart from the Minneapolis real estate market, you can also invest in another hot market in Virginia Beach, VA. The Virginia Beach real estate market presents an ideal mix of high demand, constrained supply, and a large number of renters who won’t go buy a house if interest rates drop. The diverse local economy allows you to cater to tourists knowing you can rent the property out to locals, as well.

Virginia Beach hit the top of Zillow’s fourth quarter 2018 list of communities with residential mortgages that are underwater. The community has a higher than average number of short sales. This means you might be able to snap up properties in the Virginia Beach housing market at a bargain price, whether they’re on the shore or further inland.

These homes have to be hunted for, since the foreclosure rate in Virginia Beach is in line with the national average. However, if you can offer someone who wants to get a vacation home they don’t visit anymore off their hands enough to break even, you could find real deals.

Another hot market to choose is the Los Angeles real estate market. The numbers may not make sense for many investors but if you ask savvy investors based in LA they would like to bet anytime on this expensive real estate market.

The reason being that California has the 6th largest economy in the entire world. This is largely driven by its innovative production, the heavy tech sectors in the state, and more. The Los Angeles real estate market has many points in its favor beyond its sheer size. The strong market fundamentals make the Los Angeles housing market a good place to invest if you’re looking at buying real estate in California.

Los Angeles has an unemployment rate of around 4%. What makes Los Angeles unique is the employment market. Want to work in Hollywood? Move to L.A. Want to work for a production company or in fashion? Come to L.A. If rent is too high, share an apartment or single family home with friends.

The Los Angeles housing market has seen a bump in residential construction. This has helped to satisfy some demand from renters. However, due to increasing demand, the new supply hasn’t brought prices down. It simply means that the vacancy rate in Los Angeles remains around 3% instead of falling any lower. This also suggests that any new wave of construction will at most result in rental rates remaining steady instead of causing them to fall.

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:

Demographics
https://en.wikipedia.org/wiki/Minneapolis

Job market
https://realestate.usnews.com/places/minnesota/minneapolis-st-paul/jobs
https://www.theladders.com/career-advice/these-are-the-15-cities-with-the-most-100k-jobs-in-december-2018

Student market
https://www.collegesimply.com/colleges-near/minnesota/minneapolis

Landlord friendly                                                                                    https://www.avail.co/education/laws/minnesota-landlord-tenant-law

Demand for housing
https://www.landlordology.com/10-cities-to-buy-rental-property

Affordability of real estate
https://www.landlordology.com/10-cities-to-buy-rental-property
http://www.city-data.com/city/Minneapolis-Minnesota.html

Appreciation                                                                                              https://www.mashvisor.com/blog/minneapolis-housing-market-2019

ROI                                                                                                            https://www.mashvisor.com/blog/minneapolis-housing-market-2019

Taxes
https://smartasset.com/taxes/minnesota-property-tax-calculator
https://smartasset.com/taxes/wisconsin-property-tax-calculator
https://www.usatoday.com/story/money/taxes/2018/04/06/states-highest-and-lowest-taxes-3-6/482944002

Trajectory
https://www.jsonline.com/story/news/politics/2018/05/08/its-liberal-minnesota-vs-gop-wisconsin-study-economic-growth/590813002

Rental pool
https://www.minnpost.com/economy/2018/02/why-it-s-extremely-difficult-buy-first-home-minnesota-right-now
https://www.minnpost.com/metro/2019/03/a-majority-of-minneapolis-households-now-rent-their-homes

Market Data, Trends And Forecasts                                                                          https://www.zillow.com/Minneapolis-mn/home-values                                          https://www.littlebighomes.com/real-estate-minneapolis.html https://www.redfin.com/city/10943/MN/Minneapolis/housing-market https://www.trulia.com/real_estate/Minneapolis-Minnesota                    https://www.realtor.com/realestateandhomes-search/Minneapolis_MN/overview          https://www.movoto.com/minneapolis-mn/market-trends https://www.neighborhoodscout.com/mn/minneapolis/real-estate https://www.realtytrac.com/statsandtrends/mn/hennepin-county/minneapolis


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