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 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 this report, we'll delve into the housing market trends for the 16-County Twin Cities region, focusing on the data from July 2022 to July 2023. Let's explore the key findings:
Overview of Market Statistics
Before we dive into the specifics, let's take a look at the overall market statistics for the 16-County Twin Cities region.
- New Listings: In July 2023, there were 5,823 new listings, which represents a 16.0% decrease compared to the same period in 2022 when there were 6,932 new listings.
- Closed Sales: The number of closed sales in July 2023 was 4,387, marking a significant decrease of 21.4% from July 2022, when there were 5,578 closed sales.
- Median Sales Price: The median sales price remained relatively stable at $375,000, showing no change from 2022 to 2023.
- Average Sales Price: On average, homes sold for $451,675 in July 2023, reflecting a 4.0% increase from $434,506 in July 2022.
- Price Per Square Foot: The price per square foot increased by 3.5% from $205 in 2022 to $212 in 2023.
Market Performance Metrics
Understanding market performance metrics is crucial for gauging the health of the real estate market. Let's take a closer look at some key performance indicators:
- Percent of Original List Price Received: In July 2023, sellers received 100.8% of the original list price, which is a slight decrease from 101.5% in July 2022.
- Days on Market Until Sale: The average number of days a property remained on the market increased by a substantial 31.8%, from 22 days in July 2022 to 29 days in July 2023.
- Inventory of Homes for Sale: The inventory of homes for sale decreased by 16.1% from 9,347 in July 2022 to 7,842 in July 2023.
- Months Supply of Inventory: The months supply of inventory increased by 10.5%, indicating a shift towards a more balanced market.
The Minneapolis–Saint Paul housing market has experienced notable changes in the past year. While the median sales price remained steady, there were significant decreases in new listings, closed sales, and the percent of the original list price received. Additionally, homes are spending more time on the market, and the inventory has decreased.
Buyers should be prepared for a potentially slower market with increased competition for available properties, while sellers may need to adjust their pricing strategies to account for the longer time homes spend on the market. As the market continues to evolve, staying informed and working with experienced real estate professionals will be key to success in the 16-County Twin Cities housing market.
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 July 2023 with July 2022.
Minneapolis Market Statistics
Before we delve into the specifics of the Minneapolis housing market, let's take an overview of the key statistics:
- New Listings: In July 2023, Minneapolis saw 478 new listings, which represents a substantial 31.8% decrease compared to July 2022, when there were 701 new listings.
- Closed Sales: The number of closed sales in July 2023 was 431, marking a 20.2% decrease from July 2022, when there were 540 closed sales.
- Median Sales Price: The median sales price in Minneapolis increased slightly by 0.3%, from $329,900 in July 2022 to $331,000 in July 2023.
- Average Sales Price: On average, homes sold for $408,482 in July 2023, reflecting a 3.2% increase from $395,689 in July 2022.
- Price Per Square Foot: The price per square foot showed a significant increase of 6.3% from $239 in July 2022 to $254 in July 2023.
Market Performance Metrics
Let's delve deeper into the market's performance metrics for Minneapolis:
- Percent of Original List Price Received: In July 2023, sellers in Minneapolis received 101.2% of the original list price, representing a 0.6% increase from July 2022 when the percentage was 100.6%.
- Days on Market Until Sale: The average number of days a property spent on the market increased by 25.8%, from 31 days in July 2022 to 39 days in July 2023.
- Inventory of Homes for Sale: The inventory of homes for sale in Minneapolis decreased by a significant 33.0%, from 1,089 in July 2022 to 730 in July 2023.
- Months Supply of Inventory: The months supply of inventory decreased by 9.1%, indicating a tighter market compared to the previous year.
Are home prices dropping in Minneapolis, and is it a buyer's or seller's market? These are crucial questions for anyone interested in the Minneapolis real estate market. Let's dive into the data from July 2022 to July 2023 to answer these questions:
Minneapolis Home Prices
First, let's address the question of whether home prices are dropping in Minneapolis. Here's what the data tells us:
- Median Sales Price: The median sales price in Minneapolis increased slightly by 0.3%, from $329,900 in July 2022 to $331,000 in July 2023. This indicates that, on average, home prices in Minneapolis have remained relatively stable during this period.
While the median price did not decrease, it's worth noting that the increase was modest. This suggests that the market is not experiencing rapid price growth, which can be seen as a positive sign for buyers in terms of affordability.
Market Dynamics – Buyer's or Seller's Market?
Now, let's determine whether it's currently a buyer's or seller's market in Minneapolis. To make this assessment, we'll look at various market performance metrics:
- Inventory of Homes for Sale: The inventory of homes for sale in Minneapolis decreased by a significant 33.0%, from 1,089 in July 2022 to 730 in July 2023. A lower inventory often indicates a seller's market, where there are fewer homes available for purchase.
- Percent of Original List Price Received: In July 2023, sellers in Minneapolis received 101.2% of the original list price, representing a 0.6% increase from July 2022. When sellers consistently receive above the asking price, it's typically a sign of a seller's market.
- Days on Market Until Sale: The average number of days a property spent on the market increased by 25.8%, from 31 days in July 2022 to 39 days in July 2023. While this indicates a longer time on the market, it's still relatively low, suggesting a market that favors sellers.
Based on these metrics, it can be concluded that Minneapolis is currently a seller's market. The low inventory, the percentage of the original list price received, and the relatively short time on the market all indicate favorable conditions for sellers.
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 July 2022 with July 2023. Let's explore the key findings:
Saint Paul Market Statistics
Let's start by looking at the key statistics that provide insights into the housing market in Saint Paul:
- New Listings: In July 2023, there were 319 new listings in Saint Paul, which represents a significant decrease of 21.6% compared to July 2022 when there were 407 new listings.
- Closed Sales: The number of closed sales in July 2023 was 258, marking a 24.3% decrease from July 2022 when there were 341 closed sales.
- Median Sales Price: The median sales price in Saint Paul experienced a slight decrease of 0.3%, from $286,000 in July 2022 to $285,000 in July 2023.
- Average Sales Price: On average, homes sold for $327,427 in July 2023, reflecting a 1.0% decrease from $330,877 in July 2022.
- Price Per Square Foot: The price per square foot increased by 0.3% from $204 in July 2022 to $205 in July 2023.
It's notable that while the median sales price decreased slightly, the average sales price showed a slight decrease as well, indicating some price stability in the market.
Market Performance Metrics
Let's dive deeper into the market's performance metrics for Saint Paul:
- Percent of Original List Price Received: In July 2023, sellers in Saint Paul received 102.0% of the original list price, representing a 0.6% increase from July 2022 when the percentage was 101.4%. This suggests strong demand.
- Days on Market Until Sale: The average number of days a property spent on the market increased by 4.3%, from 23 days in July 2022 to 24 days in July 2023.
- Inventory of Homes for Sale: The inventory of homes for sale in Saint Paul decreased significantly by 34.2%, from 568 in July 2022 to 374 in July 2023.
- Months Supply of Inventory: The months supply of inventory decreased by 11.1%, indicating a tighter market compared to the previous year.
Based on these metrics, it can be concluded that Saint Paul is currently experiencing a seller's market. The low inventory, high percentage of the original list price received, and a relatively short time on the market all favor sellers.
Minneapolis Housing Market Forecast 2023-2024
The Minneapolis metro area, which includes Minneapolis-St. Paul-Bloomington is a vibrant and dynamic housing market. The housing market in the Minneapolis-St. Paul-Bloomington metro area has been an area of interest for many potential buyers and sellers. Here, we'll delve into the latest data provided by Zillow, offering a snapshot of the market as of August 31, 2023, and a glimpse into what the future might hold.
Current Market Statistics
As of August 31, 2023, the average home value in the Minneapolis-St. Paul-Bloomington area stands at $372,850, reflecting a 0.8% decrease over the past year. Homes are typically going pending in around 15 days, highlighting a relatively brisk pace in the market.
Here are some additional key statistics for better context:
- 1-year Market Forecast (as of August 31, 2023): Zillow predicts a 2.1% increase in home values over the next year, offering a positive outlook for potential sellers and a possible incentive for buyers to make a move.
- Median Sale to List Ratio (as of July 31, 2023): The ratio is 1.012, indicating that homes are generally selling close to the listed price.
- Percent of Sales Over List Price (as of July 31, 2023): Approximately 58.7% of sales are closing above the listed price, implying a competitive market.
- Percent of Sales Under List Price (as of July 31, 2023): About 23.5% of sales are closing under the listed price, presenting opportunities for potential buyers.
- Median Days to Pending (as of August 31, 2023): The median time for a home to go pending is 15 days, indicating a relatively fast-moving market.
Assessing the Market Dynamics
One of the pressing questions is whether the housing market is slowing down in Minneapolis. While the data shows a slight 0.8% decrease in average home value over the past year, the 2.1% forecasted increase suggests a potential upturn. The pace at which homes go pending in 15 days also indicates an active market.
Regarding housing prices dropping in Minnesota, the marginal decrease in average home value over the past year might be a temporary fluctuation. The 2.1% projected increase over the next year indicates a positive trend that could mitigate any concerns about a sustained drop in housing prices.
Thus, the Minneapolis-St. Paul-Bloomington metro area housing market is displaying a mix of dynamics. While the past year showed a minor dip in average home values, the forecast for the coming year is promising, suggesting a potential rebound. The pace at which homes are going pending and the competitive nature of sales, with a significant percentage closing above the list price, indicate an active and lively market.
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!
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
