Winter 2019 Housing Market Update | Twin Cities

Median values across the metro continue inching up while inventory stays low, but not quite as low as last year around this time. Over the past 12 months the median home price in the Twin Cities Region rose 5.98% to $280,000 in November 2019. The months supply of homes for sale increased by 4.7% to a 2.2 months supply this November compared to 2.1 last. During this 12-month period the total number of new homes for sale increased by 2.5% to 10,959 across the 16-county region while the average number of days on market remained steady at 49. This is good news for buyers who have slightly more choices than last year, however, the market still favors sellers with low inventory (especially at lower price points) and median home values increasing overall.

$280,000

Minneapolis | Median Sales Price

Nov 2019

$224,450

St. Paul | Median Sales Price

Nov 2019

Seasonal Trends

Cold weather and holidays mark the slow season for home buying and selling in Minnesota. These predicable dips in inventory and corresponding sales typically begin the last weeks of summer and bottom out around January. We’re in the downslope now but I’m still seeing hard-to-find homes selling within days, especially in the most sought-after neighborhoods.

Selling

For homes that do sit longer, sellers sometimes choose to pull them off the market temporarily over the holidays. This “off market” status stops the clock, minimizing visible days on market, so it can be a smart move for listings with dwindling activity. Cancelling and re-listing after the New Year is another option for sellers wanting to reset and come back on as “new”.

Buying

Buyers who find their dream home during these slower months might want to act. There’s most likely less competition, so less pressure to bid up. It’s also more likely they’ll be working with motivated sellers who may be more willing to negotiate on price and terms. And interest rates are still historically low — excellent news for non-cash buyers. Come spring, there will be more homes to choose from but also more shoppers, raising sellers’ expectations. A competitive spring market will likely generate multiple offer scenarios and greater hope among sellers who hold out for highest and best, adding stress to an already (potentially) stressful process.

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Data derived from Northstar MLS 12/4/19. Includes all home styles (single-family, condo, townhouse), sizes, and construction types (new and existing). Twin Cities Region includes 16-county metro area.

Local Trends

Real estate markets are often hyperlocal so it’s worth taking a closer look at variations within the two cities and their surrounding suburbs.

St. Paul

A late-fall snapshot of the St. Paul market reveals a steady increase in sales prices with inventory still low at most prices, especially below the $600K mark. St. Paul’s overall median sale price for all home types rose 6.78% over the past 12 months — from $210,000 Nov 2018 to $224,450 Nov 2019. Compared to Minneapolis’s $280,000 median price, the capitol city remains a more affordable option for buyers seeking walkable neighborhoods with urban amenities. Current St. Paul homeowners may welcome the news of continued bump-ups in sales prices, especially those looking to sell soon.

% Change in median sales price - Nov 2018 to Nov 2019

Date derived from Northstar MLS 12/4./19. Includes all home types (single-family, condo, townhouse), sizes, and ages.

Several of St. Paul’s more affordable neighborhoods experienced some of the highest year-over-year increases. Payne-Phalen, for example, topped the chart with a +11.17% jump from fast fall, and Thomas-Dale had the second highest increase despite being the third most affordable area.

In some instances, an overall median price fails to reveal insignificant variations within a neighborhood. For example, homes sold in the past 12 months in Summit-University ranged from $83,000 to $2.2 million. Though not an apples-to-apples comparison, it’s important to note such drastic differences and stay cognizant of how values can change block-by-block. If you’re working with a real estate agent they should be neighborhood-savvy enough to understand where and how values shift in your area.

Minneapolis

Minneapolis home prices also continued their steady rise over the past year. November 2019 data revealed a median value of $280,000 for all home styles, sizes and sale types — a 7.3% increase from the November before. The city’s median values remain higher than St. Paul’s and a 10-year trend shows that gap slowly expanding.

The median sale price of newly constructed MLS-listed* condos has dipped slightly since last year at this time, while inventory levels inched up a bit to a more balanced level. The November 2019 median price for newly-built condos was $538,439, down half a percent from last November. Late fall inventory levels of new units remain low-to-balanced with a current 3.4 month supply, up slightly from a 2.2 months supply the fall before. The combo townhouse/condo median sales price of both new and previously-owned units increased by 14% over the last year, far exceeding the 4.3% increase in the city’s single-family market.

How does Minneapolis compare overall to its immediate first-ring neighbors? On average, it sits near the middle, with Edina at the high end ($470,000) and Brooklyn Center at the low (220,000). Cities just west of downtown hold value as second highest — Golden Valley and St. Louis Park have fall 2019 median sale prices of $339,500 and $304,500, respectively. Of course neighborhoods vary greatly so specific locations, and even certain blocks within a community, should always be considered when determining real market values.

Data derived from Northstar MLS 12/4/19. Includes all home styles (single-family, condo, townhouse), sizes, and construction types (new and existing).

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Aside from the predictable winter slow-down, it’s still a seller’s market, especially for fairly priced, move-in ready homes. And despite having fewer choices, shoppers are still out, though not as many as in spring & summer. Buyers who do shop diligently during winter months can sometimes be more aggressive, needing to buy within a certain timeframe. Why else would they brave the cold at showings and open houses? Leisurely lookers also peruse winter listings however, often waiting and watching for price drops. Though situations do vary, factors like rising rents and low interest rates continue to motivate many shoppers.

Sellers who need or choose to list this time of year shouldn’t lose hope, homes do sell in winter. If timing isn’t a factor though, waiting until after the New Year might not be a bad idea. Listing in late January/early February could catch waves of early-bird buyers, eager to get ahead of the competition. Everyone’s situation is different though, so it can be helpful to talk it through. I’d be happy to assist with any questions about the timing of selling or buying. Feel free to reach me at heidi@lyndenrealty.com or 651-503-1540.

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Heidi Swanson is a Realtor® based in St. Paul, Minnesota. She writes a blog to share information on a variety of real estate related topics including buying and selling, market conditions, homeownership trends and more. Reach her at heidi@lyndenrealty.com or 651-503-1540.

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*New condos sales and inventory numbers from Northstar MLS database; they do not include in-house sales from developers.

Banner photo credit: Hal Tearse from Pixabay

Summer 2019 Housing Market Update | Twin Cities

“Slow and steady” best describes movement in the Twin Cities housing market this summer. MLS* data crunching reveals gradual increases over the past year in median sale prices for single-family homes, condos and townhouses across the metro, with very little change in inventory. The difference in the number of new listings this June, though higher than last, was barely detectable. From June 2018 to June 2019, new listings for all home types went up by a mere 1.5% across the 16-county Twin Cities Region, 6% in Minneapolis, and actually decreased by .5% in St. Paul. When considering supply and demand, it’s still a seller’s market.

New Home Listings | 3-Year Trend

Prices Going Up

The overall trend in median sale prices reveals a steady rise, also good for sellers. From June to June, the median increase for most home types was in the 6-7% range. An exception was the Minneapolis condo market which experienced a double-digit boost (17.5%) for newly-built MLS-listed units. St. Paul’s single-family homes and condos/townhouses increased at the next highest rates (7.3% and 7% respectively). Minneapolis single-family prices went up 6.3% just ahead of the Twin Cities Region’s overall 6.1% jump.

In June 2019 the median price of single-family homes in St. Paul was $219,000, up from $205,000 the year before. During the same period, Minneapolis single families increased from $253,950 to $270,000 while the Twin Cities Region’s median values for similar properties rose from $277,000 to $294,000.

Those looking to buy may have been challenged finding the right fit this spring & summer but activity seems to have slowed around the July 4th holiday giving serious buyers some room to breathe. Current mortgage interest rates are an added incentive this season. Locking in low can keep payments down or open up options to buy higher in a market with a less-than-healthy supply.

Median Sale Prices | Single Family Homes

Regional MLS data includes all home sizes, ages (newly and previously built) and sale types (traditional and bank-owned). Each data point draws from 12 (rolling) months of activity.

What’s a “Single-Family” home?

A stand-alone home designed to accommodate one family. In comparison, “multi-family” homes like duplexes and triplexes are built and zoned for more than one family.

Low Inventory

Despite having slightly more homes to chose from, some buyers are still struggling to find the right fit. The region’s early summer supply of 2.4 months is well below the 5-6 months needed for a balanced market, and home shoppers can feel the scarcity. It’s especially noticeable with on-trend, move-in-ready homes in the most sought-after cities and neighborhoods. Minneapolis and St. Paul supply levels, though up a tad bit from last year, remain frustratingly low for people wanting to find the right home for the right price in their favorite neighborhoods. June 2019 data reveal a meager 1.7 months supply of single-family homes for sale in both Minneapolis and St. Paul. Condos and townhouses are more readily available but not by much (months supply hovering around 2.5.)

Late spring was especially competitive with multiple buyers offering (and often losing) bids in the tens of thousands over list price for a single property. Activity seemed to have slowed a bit early June, however. Maybe the heat rolling in, school ending, kids graduating or families gearing up for summer trips cooled the jets? Despite summer distractions, buyers are still out there looking to get settled before school starts, the snow flies, interest rates creep up, rents rise, leases expire, etc.

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When to Sell?

If you’re a home owner thinking about selling, warm-weather months are still your best bet in Minnesota. Most people prefer not to move in snow and cold, during holiday seasons, or mid school year if they can avoid it. Once November hits be prepared for a longer time on market as home shopper traffic slows. And if winter weather cuts into fall a slow-down could happen even sooner.

Of course the best time to sell is when you’re ready. In the mean time learn the market, make a plan and get professional help when needed. Despite having fewer choices, buyers are still choosy and will expect to pay less for homes in need of updates or TLC. It’s helpful to know what they’re looking for. Also beware that real estate markets can be hyper-local. What’s true in one neighborhood, or even block, might not be true in the next. If you want help zeroing in on your market, talking through possible updates or learning the selling and buying process, please connect! I’m happy to assist.

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Heidi Swanson is a Realtor® based in St. Paul, Minnesota. She writes a blog to share information on variety of topics including buying and selling, market conditions, homeownership trends, local events and more. Reach her at heidi@lyndenrealty.com or 651-503-1540.

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*All data derived from the Northstar MLS database, the primary listing service used by real estate agents and brokers throughout the Twin Cities and parts of greater Minnesota.

St. Paul Housing Market: Snapshot of Spring 2019

Inventory of available homes to purchase in St. Paul remains low this spring — it’s still a seller’s market at most price points. Minnesota’s busiest season seemed to have a false start late January when the polar vortex and piles of new snow slowed a flurry of new-year activity. It’s starting to pick up but competition among home buyers remains high as new listings lag in comparison to demand.

Warming weather along with lower interest rates may be motivating home buyers to get out and shop. What are they seeing so far? I dug through local MLS data to get a snapshot of activity, search for trends and cross-check stories from the field — this post summarizes my recent findings.

Rising Median Sale Prices

Sale prices in St. Paul continue to steadily rise, in some neighborhoods more than others. Thomas-Dale (Frogtown) and St. Anthony Park experienced the greatest increases in the past year with 16.3% and 15%, respectively. Payne-Phalen and the Greater East Side saw nearly 10% hikes while North End, St. Paul’s most affordable pocket, experienced the least drastic increase at +2%.

Summit-University was the outlier showing an unexpected decrease in single-family homes (-16%). The neighborhood, bordered by Downtown and Lexington on its east-west ends, and University and Summit Avenues to the north and south, contains wide variety of housing options. Single-family homes range from modest and affordable to Ramsey Hill mansions. It also has one of the highest concentrations of condos in the city, especially in and around the Historic Hill District. Unlike the overall single-family home prices, condo values in the neighborhood have been on the rise with the median price for all types and sizes going up 4.7% over the past 12 months.

Downtown single-family median values were non existent in the MLS which is not surprising. Its housing stock is comprised primarily of condos whose median price rose 7.6% from last March to $194,000 for all sizes and types.

Snapshot of St. Paul Homes for Sale | April 20, 2019

Northstar MLS data reflects all sizes, prices, seller types (distressed and traditional), new construction & previously owned from March 2018-March 2019 (Como: Jan 2018-Jan 2019). Does not include "Coming Soon" or homes with accepted offers with contingencies (Ai, for example).

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More Competition for Move-up Buyers

If you’re moving into a mid-to-upper bracket home in St. Paul you have competition. The available inventory of homes in the move-up market is slim, and the number of days on markets for these properties has dropped. In March 2018 the months supply of $600,000-699,000 was 4.8. That number dropped to 2.6 in March 2019, tipping the balance in favor of sellers (5-6 is balanced and favors neither.) Supplies dropped in the $700-900K ranges as well creating more competition for desirable homes at all price points under $1M.

The median number of days on market for mid-to-upper priced properties has also changed significantly in the past year. Homes in the $600-900K price range are selling much faster this spring than last. For example, the median number of days for $600-699K dropped from 74 in March 2018 to 20 in March 2019. Considering the corresponding decrease in supply, these numbers make sense. With fewer homes available, the good ones are going fast.

Months Supply of Homes for Sale | St. Paul

1-year change in supply of single-family homes for sale. A 5-6 months supply is considered balanced. Lower numbers favor sellers, higher numbers favor buyers. MLS data represents both new and previously-built homes of all sizes.

Days on Market | St. Paul | 2018-19

1-year change in number of days on market. MLS data represents both new and previously-built single-family homes of all sizes.

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St. Paul vs. Minneapolis

Lately I’ve met more and more buyers crossing the river in search of homes. Minneapolitans looking to settle in St. Paul are becoming a thing. They tell a similar story of wanting urban amenities at a more affordable price and feel their chosen Minneapolis neighborhoods are financially out of reach. These city dwellers share an appreciation of St. Paul’s charm and walkability where they can easily access restaurants, cafes, grocery and transportation, at a more affordable price.

Historically the median price in St. Paul has been lower than in Minneapolis but the gap between them appears to be growing. Shoppers may be sensing it and MLS data seems to support their claims. Sale prices for all home types have been increasing at a slightly faster rate in Minneapolis (check out the graph below.) St. Paul’s March 2019 median was 215,000 compared to 267,000 in Minneapolis — a slightly wider spread than the respective $125,000 and $150,000 median prices of 2009.

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Spring Market Inventory

If you’re looking to buy this year, don’t let the state of low inventory deter you. Spring may still be the best time to home shop in Minnesota as the number of new listings continues to grow offering more choices to buyers. Last year that number peaked in May with 561 new listings in St. Paul (for all home types). This March we saw 353 new listings, inching up from the low of 134 in December 2018. I’m confident market history will repeat itself when more homes enter the market in the next couple of months. As they do, be prepared mentally and financially to make your move.

New Listings | St. Paul

Derived from Northstar MLS data showing number of new listings by month in St. Paul, MN. Represents all home sizes & types (single-family, condo, townhouse) and both types of construction (new and pre-owned).

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Heidi Swanson is a Realtor® based in St. Paul, Minnesota. She writes a blog to share information on variety of topics including buying and selling, market conditions, homeownership trends, local events and more. Reach her at heidi@lyndenrealty.com or 651-503-1540.

Fall 2018 Housing Market Update | Twin Cities

Last summer’s frenzied market of overbidding to beat multiple offers has noticeably quieted, however, inventory around the metro remains low. Seasonal slowdowns are expected. With the advent of cooler temps, a new school year, and the holiday season, home shoppers downshift to a less aggressive search mode. But they’re still out there, on the sidelines. And new homes continue to enter the market, though at a slower rate than our traditionally fast-paced spring and summer markets. Competition for the most desirable new listings in sought-after locations is still evident with those properties selling within days when the price is right. But the rush to beat out the competition has significantly subsided. And at this time of year many buyers, distracted by holidays and winter weather, are content holding out for anticipated seasonal price-drops. But how does this compare to last fall? Is there a discernible trend? Will next spring and summer be a repeat of last? Both buyers and sellers are asking, “should I wait?”

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New fall condo listing in the Cathedral Hill neighborhood of St. Paul.

Seasonal Slowdown

As people’s priorities shift with the season the housing market slows and homes take longer to sell, theoretically favoring buyers. For home sellers, enduring an extended time on market can cause anxiety and a willingness to accept lower offers to avoid the mid-winter slump. Shoppers anticipate this downturn and those with flexibility often wait it out in hopes of getting a deal. I’ve recently talked to many potential buyers who are doing just that. After witnessing the summer drive-up in prices and stress of multiple bids, many have positioned themselves in stable temporary housing (short-term renting, house sitting, living with family, etc.) to avoid the pressure and anxiety of hyper-competitive buying. These buyers may not necessarily be waiting for a winter bargain, but rather the right home and the luxury of time for making a sound decision. It’s a smart move if you can pull it off.

One drawback to slow-season home buying, however, is lack of inventory. As the competition diminishes, so do properties. Last summer’s new listings in the 16-county Twin Cities Region peaked at 9,022, up from a mere 2,158 the winter before. No doubt the same will happen this year. The graph below clearly depicts these year-over-year seasonal dips — a predictable pattern for Minnesota markets. If you can find what you’re looking for, buying this time of year might be advantageous. If not, hold tight, the new year will bring more choices. Just be financially prepared and emotionally ready to face increased competition in a market experiencing an already scant supply of low and mid-priced homes.

Seasonal Changes in New Listings

Low Inventory

How low is low? It depends. Yes, the market has slowed from last summer but not because supply has increased, especially in the lower price ranges. Starter home supply is especially lacking with a meager 1.1 months available in the $150-200K range as of late October. A 5-6 months-supply is considered balanced, favoring neither buyer nor seller, which is currently the case in the move-up market. October data reveal a 5.9-months supply of homes priced $500,000+ across the Twin Cities Region, with 4.0 and 4.2 in Minneapolis and St. Paul, respectively.

Months Supply by Price

Includes all home types in the Twin Cities 16-county Region (single family, condo, townhouse), traditional listings (not distressed). October data derived from the regional MLS.

Changes Ahead

During the past three years we’ve experienced a steady decline in available homes for sale across the metro, tipping the balance in favor of sellers. Is that changing anytime soon? Perhaps, but slowly. Data from the past year show less of a decrease this year compared to previous years — only 1% from last October. Considering we experienced double-digit drops in the years preceding (17% then 14%), this number stands out as potentially significant. It may be signaling a trend reversal and shift toward greater balance in the market.

The months-supply metric also shows signs of leveling. This October was the same as last at 2.4 in the 16-county region for all home types, sizes and sellers (traditional and lender-mediated). Since its high point in 2008 (9.9) that number has plummeted to its low last winter (1.5) but appears now to be holding steady. We’ll see what this winter brings.

What might these changes mean for home shoppers? It’ll be good news for buyers wanting more choices. And a greater number of homes to meet demand could translate to price-dropping, or at least price-leveling in the coming year.

Number of Homes For Sale* | Twin Cites

Decline in number of homes for sale may be leveling out. Includes 16-county Twin Cities Region, all types, styles and sellers (traditional and lender). Data derived from Northstar MLS.

Selling this spring

What about current owners looking to list? Future sellers should be comforted by the inventory numbers which are still historically low. If you’re selling in the low-to-mid market, you should be okay. Location and condition matter too, however. And, despite the limited supply, home buyers’ expectations tend to be high. If you plan to list this spring or summer, start now with repair and update projects (if you haven’t already)! Most buyers expect HGTV-worthy homes that are updated and move-in ready. What does that mean? You should declutter, deep-clean and make small repairs at the very least. Neutralize your paint colors, update lights and fixtures and complete small remodeling projects if you can. Then work with a stager to add or arrange on-trend furniture and decor to match your target market. It may seem like too much in a “seller’s market” but homes that have been thoroughly prepped stand out from the competition and typically sell faster. And, the costs involved are usually recouped through a higher offer price and fewer days on market. Most buyers cannot see past clutter or disrepair when visualizing living in a space. Sellers can help them! Now is the time to start if you are planning a spring listing.

Mortgage Rates Rising

Mortgage interest rates have ticked up and many speculate further increases for the coming year. Have the recent hikes affected buyer behavior? For the most part, no. Buyers appear more focused on changing sales prices than fluctuating interest rates, for now. Why? Perhaps because rates are still historically low and people have been able to purchase the homes they desire. But if you’re thinking about buying soon (in the next year or so) consider closely the cost of another potential rate increase. Even a 1% change could drastically affect your monthly payments and amount for which you qualify. For example, payments on a $250,000 house (with 20% down) jump from $1053 to $1177 per month with a 1% rate hike, and you would end up paying an additional $44,773 in interest over the life of the loan.

You should also be aware of how increased monthly payments can affect your buying power. Fannie Mae and Freddie Mac conforming loan guidelines require certain “front-end” (mortgage-to-income) ratios — typically your monthly payment cannot exceed 28% of your income. If your monthly payment goes up with a 1% rate hike, so must your income if you wish to purchase that same $250,000 home. The consequences of rising interests rates could push you into a lower price-bracket, unless your income keeps pace.

Example: 1%↑ in Interest Rates

Estimates for a $250,000 home with 20% down ($200,000, 30-year, fixed rate mortgage)

Slow and Steady

The Twin Cities Region has experienced a steady rise in median home sale prices over the past several years. As of October the median price of traditionally-sold properties (non lender-mediated) had increased 6.8% over last (with a 5% bump the year before). With supply still lacking in the low-to-mid range, major price drops in the coming year are not anticipated. For city dwellers, St. Paul remains a more affordable option over Minneapolis with a current median sale price of $216,600 compared to $265,500 in Minneapolis.

Condo and single-family homes are on similar tracks across the Twin Cities with 5.8% and 6.0% increases, respectively. Townhouses may be in greater demand showing an 8.2% jump since last October. Keep in mind the real estate market is location-driven and what’s true in your neighborhood may not be the case in another. Even within neighborhoods, demand and price can vary block to block. Overall, however, our region appears stable despite the early chill in the air and consequent drop in market activity.

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*Homes for Sale refers to the number of properties available for sale in active status at the end of a given month. Also known as inventory.

In this this post the Twin Cities 16-county Region include the following: Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Le Sueur, Mille Lacs, Pierce (WI), Ramsey, Scott, Sherburne, Sibley, Washington, Wright and St. Croix (WI).

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Heidi Swanson is a Realtor® based in St. Paul, Minnesota. She writes a blog to share information on a variety of real estate related topics including buying and selling, market conditions, homeownership trends and more. Reach her at heidi@lyndenrealty.com or 651-503-1540.

Spring 2018 Housing Market Update | Twin Cities

Slow & Steady

As we move into spring, trends in the Twin Cities housing market consistently follow the same trajectories as reported last fall. Inventory continues to drop as prices steadily rise. The median home price in the Twin Cities region rose 5% in the last 12 months, from $238,000 to $250,000 and inventory continued its drop to a 2.2 months supply, from 2.7 one year ago.

Twin Cities Median Home Sale Prices

MLS-derived data reflects Twin Cities region, single-family, all sizes, new and existing homes, traditional sales only (not foreclosed or lender mediated).

One difference between the major metros remains — St. Paul is more affordable than Minneapolis. Since last fall, however, Minneapolis has experienced a drop in median sales prices while St. Paul has seen a continued rise. Data from last October showed Minneapolis median prices increasing by 5.4% and St. Paul by 2.6%. This spring the numbers have reversed — St. Paul now shows a 6.9% increase while Minneapolis is now at 3.4%. Are buyers being priced out of Minneapolis and setting their sights on more affordable urban neighborhoods? Could be. I've met many home shoppers who've made this claim.

Who's Buying?

Several new homes hitting the market this spring have sold with multiple offers, within days. Some are even selling before print. The demand for move-in ready homes in lower price ranges appears to be even greater than it was last fall as buyers gear up for warm-weather transitions. Who's competing for these homes? There seems to a mix of buyers going after similar single-family homes in urban neighborhoods.

Empty nesters moving from the suburbs to the city are seeking walkable neighborhoods with amenities, mass transit options and smaller spaces to furnish and maintain. At the same time, a growing number of millennials looking to buy their first home, noting similar preferences and a desire to buy below their means, are going after the same. Add investors to the mix. Empty nesters and millennial may find themselves competing with cash-buying investors looking for single-family rentals or small homes to flip. Occasionally these include parents of college students looking to allay the rising costs of rent.

Get Prepared!

If you are searching for homes this spring it's best to be financially prepared and ready to act quickly. Get pre-approved with a good lender and be as flexible as possible with your schedule. You'll want to tour new listings as soon as possible (a day's delay can often be too late.) I also advise seeing multiple homes and researching neighborhoods well before making an offer. You don't want to make an emotional decision under pressure that you may later regret. Having house-hunting experience, a financial plan and a clear, realistic vision will help ease your stress in this seller's market. 

New spring listing in St. Paul's Hamline-Midway neighborhood: 4 Bedroom/3 bath | 1534 TSF | $315,000

Up-and-Coming

The recent data also show more drastic increases in median sales prices in traditionally lower-priced neighborhoods throughout the Twin Cities. For example, St. Paul's Hamline-Midway neighborhood has experienced a 13.5% increase in the past 12 months while Highland Park has experienced only 2.1%. Similarly, neighborhoods in north Minneapolis show double-digit increases while those in higher-priced areas like Linden Hills hover in the single digits. This pricing phenomenon raises the issue of gentrification and affordable housing, a very real concern that extends beyond the scope of this post. To further explore local effects, check additional resources here and here.

If you're searching in an up-and-coming neighborhood be sure to work with a professional who's aware of local trends. What may appear overpriced at first glance may end up selling for well over asking with multiple bids. It helps to have an agent who knows the area and stays up-to-date.

Price & Inventory Changes by Neighborhood

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MLS-derived data based on Minneapolis single-family homes, all sizes, previously owned, traditional sales. Chart includes a selection of neighborhoods, not all. Check out St. Paul neighborhood chart here.

A balanced market has a 5-6 months supply of homes for sale. Fewer favors sellers.

Has Spring Sprung? 

Though early spring inventory remains low, many buyers are holding out hope for more to come. Some suspect the drawn-out winter weather is causing future sellers to delay preparing their homes for the market, which may be true. I've spoken to several homeowners who are still gearing up for a spring (or summer) listing. Sellers may also be lacking any sense of urgency, knowing they too may soon be struggling to find the next place to live.

As home sellers delay, some buyers are doing the same. I've heard several shoppers express their resolve to hold out for the perfect home — a smart tactic if time allows. For others with more urgent needs, this low-inventory market is proving to be quite stressful. Let's hope more homes become available as the days continue to warm. The spring market activity which typically kicks in post-Super Bowl may be off to a slow, weather-permitting start. 

If you would like to learn about value increases in your neighborhood or city, please give me a call. If you haven't been following trends in your market, you may be surprised.

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Heidi Swanson is a Realtor® based in St. Paul, Minnesota. She writes a blog to share information on a variety of real estate related topics including buying and selling, market conditions, homeownership trends and more. Reach her at heidi@lyndenrealty.com or 651-503-1540.

Fall 2017 Housing Market Update | Twin Cities

Minneapolis vs. St. Paul

The past year showed a gradual and consistent increase in median home prices throughout Minneapolis, St. Paul and the greater Twin Cities region for all types of homes, including single family, condominiums and townhouses. The overall median sale price increased by 5.4% in Minneapolis, and 2.6% in St. Paul. Inventory is low, typically favoring those selling rather than buying, especially at lower-end price points in high-demand neighborhoods. 

Overall, St. Paul remains a more affordable city with a September 2017 median sale price of $194,000 versus Minneapolis' $245,450. City dwellers shopping for new homes may be taking notice. Lately, I've met more and more Minneapolitans searching for homes east of the river. The reason most often cited? Affordability. They can enjoy the convenience and amenities of urban living for less. However, low inventory across the Twin Cities region might also be a factor. The months supply of homes for sale in Twin Cities has been steadily declining throughout the year which may be forcing shoppers to expand their search beyond first-choice locations.

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All data from MLS Northstar Infosparks, Oct 25, 2017.

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Rise and Fall

These interactive graphs depict slow and steady growth in sales price along with a simultaneous drop in inventory over the past year in Minneapolis, St. Paul and the six-county region. The data points are derived from our regional MLS database and will remain live on this post, updating continually as the market data changes. 

Results are based on traditional sales (no bank intervention), all construction types (newly built as well as existing), and all sizes of homes. 

Median Sales Prices | Past Year

Months Supply | Past Year

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A Seller's Market? It Depends

If you've been shopping for your first home or searching in the lower-end price ranges, you've most likely felt some competition. Low inventory of more affordable homes has typically favored sellers and often created multiple offer scenarios, especially in coveted neighborhoods. If you plan to sell in this range and move up, however, you may be perfectly positioned. Inventory in the $400,000-$700,000 range remains much more balanced, alleviating competition among buyers searching for those homes. So, if you're thinking of moving up, now might be a smart time.

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A 5-6 months supply represents a balanced market. Lower supplies typically favor sellers.

All data from MLS Northstar Infosparks, Oct 25, 2017.

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Location Matters

Remember that real estate trends are local and can vary greatly by city, neighborhood or even block. What's happening in your area may be different than what's happening in the larger region. If you'd like specific market data for your location and home, let me know. I can crunch the numbers and send you custom graphs reflecting specific trends in your city and neighborhood, or prepare a more in-depth market analysis using specific info. about your home.

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Heidi Swanson is a Realtor® based in St. Paul, Minnesota. She writes a blog to share information on a variety of real estate related topics including buying and selling, market conditions, homeownership trends and more. Reach her at heidi@lyndenrealty.com or 651-503-1540.