Navigating the housing market can feel like reading tea leaves, especially in a vibrant city like St. Paul. So, let's cut to the chase: The current St. Paul housing market is very competitive, showing signs of slight cooling. While the median home price is up, the pace of price increases has slowed, and homes are staying on the market a bit longer. Looking ahead to 2025 and 2026, expect this trend to continue – a moderately competitive market with fluctuating mortgage rates playing a pivotal role.
Current St. Paul Housing Market Trends
Let's dive deeper into the specifics to understand what's happening now and what could be in store for you whether you're buying, selling, or just curious.
Home Sales
According to Redfin, in January 2025, 164 homes were sold in St. Paul, reflecting a +5.8% increase compared to the 155 homes sold in January of the previous year. This is a positive sign, indicating that people are still actively buying and selling.
Home Prices
Home prices in St. Paul have seen a modest increase. The median sale price in January 2025 was $270,000, a +1.1% rise compared to January 2024. While not a huge jump, it shows that home values are holding relatively steady.
Are Home Prices Dropping?
No, home prices haven't dropped in St. Paul. They've increased slightly, as shown above. However, it is important to note that, as the year progresses, prices could still drop.
Comparison with Current National Median Price
The median home price in St. Paul ($270,000) is significantly lower than the national median price of $407,500 (as of December 2024). This difference makes St. Paul a more affordable option for many homebuyers compared to the national average. To put it into perspective, St. Paul's median sale price is 35% lower than the national average.
Housing Supply
While specific data on the overall housing supply is limited, the fact that homes are selling within an average of 36 days suggests that there's enough supply to meet current demand, but not a huge surplus. In a balanced market, there is usually six month's worth of supply, but if it is below that, we are looking at either a seller's market or a buyer's market, depending on if the number is way above or way below.
Is It a Buyer's or Seller's Housing Market?
Currently, St. Paul leans towards a seller's market, but it's becoming more balanced. Homes are selling relatively quickly (36 days), which benefits sellers. However, the fact that homes are often selling slightly below the list price (99% sale-to-list price) and homes with price drops are relatively high, (26.3%) indicates that buyers have some negotiating power.
Here is a summary of the same in a table for a quick overview:
| Metric | January 2025 | Year-over-Year Change |
|---|---|---|
| Median Sale Price | $270,000 | +1.1% |
| Number of Homes Sold | 164 | +5.8% |
| Median Days on Market | 36 | -6 days |
| Sale-to-List Price | 99.0% | -0.45 pt |
| Homes Sold Above List Price | 29.9% | -7.5 pt |
| Homes with Price Drops | 26.3% | +4.8 pt |
Market Trends
Several factors are shaping the St. Paul housing market:
- Migration Patterns: Data shows people are moving out of St. Paul to Brainerd, Cape Coral, and Duluth, while those moving into St. Paul come from Albuquerque, Miami, and Chicago. These trends can influence demand in specific neighborhoods.
- Sale-to-List Ratio: Homes in St. Paul are selling for approximately 99.0% of their list price.
- Below List Price: Homes sell for about 1% below list price.
- Competitive Market: The average homes sell in around 35 days.
- Price Drops: 26.3% of homes sold had a price drop.
Impact of High Mortgage Rates
Mortgage rates hovering around 7% significantly impact affordability. Higher rates mean buyers pay more in interest over the life of the loan, reducing their purchasing power. This can lead to fewer buyers entering the market and potentially slowing down price appreciation. This is something I've been telling clients for quite some time.
My Thoughts on Mortgage Rates: In my experience, even a slight shift in mortgage rates can make a big difference in what people can afford. A drop in rates could reignite buyer demand, while a further increase could put more downward pressure on prices.
St. Paul Housing Market Forecast 2025-2026
Based on the current trends, I anticipate the following for the St. Paul housing market:
- Continued Moderation: The market will likely become more balanced, with less intense bidding wars and more negotiating power for buyers.
- Price Appreciation Slowdown: While prices are unlikely to plummet, the rate of increase will likely be more moderate than in recent years.
- Mortgage Rate Influence: Mortgage rates will be a key factor. If rates remain high, affordability will be a challenge, potentially dampening demand. If they decrease, the market could see a resurgence in activity.
- Localized Differences: Demand and price fluctuations will likely vary by neighborhood and property type. Some areas may remain highly competitive, while others may see more inventory and price adjustments.
- Increased inventory: The amount of homes for sale in St. Paul may rise, as higher mortgage rates and affordability concerns push more homeowners to sell.
Looking Ahead: I believe it's crucial to keep a close eye on economic indicators, particularly inflation and unemployment, as these factors can influence mortgage rates and consumer confidence, both of which play a big role in housing.
Factors to Watch
- Economic Growth: A strong local economy can boost buyer confidence and demand.
- Job Market: Job growth attracts new residents, increasing the demand for housing.
- New Construction: The pace of new home construction can impact the supply of available properties.
- Government Policies: Changes to tax laws or housing regulations can influence the market.
To sum up, the St. Paul housing market is currently in a state of transition. While it remains competitive, there are signs of moderation. Understanding these trends and factors will help you make informed decisions whether you're buying or selling. Keep in mind that local market conditions can vary, so it's always best to consult with a real estate professional who knows the area well.
