This article has been updated to reflect recent changes in the Minneapolis real estate market due to the coronavirus pandemic. We'll be discussing the housing market trends for the Twin Cities Metro Area in 2023. 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–Saint Paul Housing Market Trends (Describes Twin Cities)
Here are the most recent housing statistics in Minneapolis–St. Paul–Bloomington MN-WI metropolitan area. 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.
New Listings and Closed Sales:
According to a report from Minneapolis Area REALTORS® and Saint Paul Area Association of REALTORS®, Iin April 2023, the number of new listings in the Minneapolis–Saint Paul area decreased by 27.9% compared to the previous year, with 5,170 new listings recorded. Over the rolling 12 months, new listings declined by 15.0% to reach a total of 63,150. Similarly, closed sales experienced a significant decrease of 32.2% in April 2023, with 3,263 closed sales. The rolling 12-month closed sales figure dropped by 23.1% to 49,966.
Median and Average Sales Prices:
The median sales price in April 2023 was $367,500, showing a slight decrease of 0.7% compared to the previous year. However, over the rolling 12 months, the median sales price witnessed a growth of 5.5%, reaching $365,000. On the other hand, the average sales price in April 2023 was $426,579, down by 1.0% from the previous year. Over the rolling 12 months, the average sales price increased by 6.2% to $427,079.
Price Per Square Foot and Percent of Original List Price Received:
The price per square foot for homes in the Minneapolis–Saint Paul area decreased by 1.7% in April 2023, amounting to $207. However, over the rolling 12 months, the price per square foot saw a growth of 4.6%, reaching $203. The percent of original list price received also experienced a decline of 3.6% in April 2023, with homes selling at an average of 100.1% of their original list price. Over the rolling 12 months, this metric decreased by 2.0% to 100.0%.
Days on Market and Inventory:
The average number of days on the market until sale increased significantly in April 2023, with homes taking an average of 45 days to sell, representing a 60.7% increase compared to the previous year. However, over the rolling 12 months, the average days on market showed a more modest increase of 29.6%, with homes selling in approximately 35 days. The inventory of homes for sale decreased slightly by 4.5% in April 2023, with 6,155 homes available.
These trends provide valuable insights for both buyers and sellers, highlighting the current conditions of the market and allowing for informed decision-making. The Minneapolis–Saint Paul housing market in April 2023 exhibited a decline in new listings and closed sales compared to the previous year.
However, median and average sales prices remained relatively stable, with a slight decrease and increase, respectively. Price per square foot experienced a slight decrease, while the percent of original list price received also declined. Days on market increased significantly, indicating a longer selling process, while the inventory of homes for sale decreased slightly.
Minneapolis Housing Market Trends (Describes City's Housing Stats)
Below is the latest report on the Minneapolis Housing Market which compares the Minneapolis housing metrics from April 2022 with April 2023.
- In April 2023, the number of new listings in Minneapolis decreased by 33.4 percent.
- The number of days on the market increased by 29.5% to 57 days.
- Price Per Square Foot decreased 4.5% to $239.
- The median sales price decreased 2.5% to $326,500.
- The average sales price decreased 1.1% to $401,351.
- Months Supply of Inventory increased by 20% to 1.8 months.
Saint Paul Housing Market Trends (Describes City's Housing Stats)
Below is the latest report on the “St. Paul Housing Market” released by the Minneapolis Area REALTORS®. The report compares the St. Paul housing metrics from April 2022 with April 2023.
- In April 2023, the number of new listings in St. Paul decreased by 35.4 percent.
- The number of days on the market increased by 53.3% to 46 days.
- Price Per Square Foot decreased 4.3% to $2025.
- The median sales price decreased 2.2% to $284,000.
- The average sales price decreased 2.2% to $328,296.
- Months Supply of Inventory decreased by 8.3% to 1.1 months.
Minneapolis Metro Area Housing Market Forecast 2023-2024
The Minneapolis metro area, which includes Minneapolis-St. Paul-Bloomington, is a vibrant and dynamic housing market. In this blog post, we will delve into the current state of the market and provide a forecast for the upcoming year. Understanding the trends and projections can be valuable for both buyers and sellers looking to make informed decisions. Let's explore the key statistics and forecast for the Minneapolis metro area housing market given by Zillow.
Average Home Values and Value Change:
As of April 30, 2023, the average home value in the Minneapolis-St. Paul-Bloomington area stands at $366,327. Over the past year, there has been a slight decrease of 0.4% in home values. This indicates a relatively stable market in terms of home prices.
Market Forecast:
Looking ahead, the market forecast for the Minneapolis metro area shows a positive outlook. The forecast predicts a 1.9% increase in home values over the next year. This suggests a potential recovery and growth in the housing market, which can be encouraging for homeowners and sellers.
Median Sale to List Ratio:
The median sale to list ratio, as of March 31, 2023, is reported as 0.999. This indicates that, on average, homes are selling very close to their list prices. Buyers and sellers can use this information as a reference point for pricing negotiations and setting realistic expectations.
Percent of Sales Over and Under List Price:
In March 2023, approximately 33.4% of sales in the Minneapolis metro area were made over the list price. This suggests a competitive market environment where buyers may need to make competitive offers to secure a property. On the other hand, around 45.6% of sales were made under the list price, indicating opportunities for buyers to find homes below the asking price.
Median Days to Pending:
The median number of days it takes for a property to go pending in the Minneapolis metro area is reported as 14, as of April 30, 2023. This indicates a relatively fast-paced market where homes are going under contract within a short time frame. Buyers should be prepared to act quickly when they find a property they are interested in.
Summary:
The Minneapolis metro area housing market shows promising signs for the coming year. Despite a slight decrease in average home values over the past year, the market forecast predicts a positive growth trend. With homes selling close to their list prices and a competitive environment, buyers and sellers alike should be prepared for a dynamic market. The median days to pending reflects the speed at which properties are being sold, emphasizing the need for buyers to act promptly.
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 May 2023, the average rent for a 1-bedroom apartment in Minneapolis, MN is $1,300. This is a 10% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Minneapolis decreased by -9% to $1,045. The average rent for a 1-bedroom apartment decreased by -3% to $1,300, and the average rent for a 2-bedroom apartment decreased by -1% to $1,900.
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 $1,211 last month. Edina was the most expensive city with one bedrooms priced at $1,710 while Brooklyn Center was the most affordable city with one bedroom priced at $980.
The best place to buy rental property is about finding 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%)
- Edina had the fastest growing rent, up 25.7% since this time last year.
- Bloomington rent grew 20.9%, making it second.
- Plymouth was third with rent climbing 19.7%.
The Fastest Growing Cities For Rents in Minneapolis Metro Area (M/M%)
- Rosewood had the largest monthly growth rate, up 5.9%.
- Minneapolis was second with rent climbing 4.7%.
- St. Louis Park saw rent increase 3.1% last month, making it third.
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!
Remember, caveat emptor still applies when buying a property anywhere. Some of 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, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
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
