A Year in Review – Minnesota Real Estate Statistics and Analysis for 2024

Every year I like to sit down with the local statistics and see how everything buyers and sellers have experienced in the past 12 months compares to the market at large. I’ll take time in this post to explore the statistics that buyers like such as average numbers of houses shown before purchasing, along with those that sellers and homeowners in general are curious about such as days on market, price growth and more. All of this is viewed through the lens of the area I serve. As a Broker licensed in Minnesota and Wisconsin, I primarily work the Twin Cities Metro as well as the westernmost Wisconsin counties (Pierce and St. Croix). Where it makes sense for clients and myself, I do serve out-state areas but these are not reflected here. If there’s a piece of data I don’t answer here, I can often find it so don’t hesitate to contact me personally to better understand the real estate market as it pertains to you! I’ll review the key numbers for buyers and sellers as well as my take on what we could expect in 2025.

Buyer Statistics

Without further delay, let’s dive in and start with buyer statistics. For transactions closed in the calendar year 2024, buyers looked at 22 homes on average before closing on a home. The fewest I showed to a client is 8, and the most was 45. The median for my clients was 23 for the same period. In past years I have noted this at around 17. The fact this is going up supports the idea that buyers have more to look at in the current market, so are taking their time to make the right decision. The other aspect that has come back in force is inspections – where 2020 through 2023 saw few buyer inspections, every buyer client I worked with in the past 12 months had an inspection contingency included in their offer.

Buyer searches took an average of 88 days from viewing the first house in person to the date of closing. The longest was 125 days and the shortest was 46. Clients who had longer periods from beginning to the date of close usually had a situation where they wrote on multiple homes in that period and either lost out on an offer or had delays in the process beyond their control. From offer to close the average buyer had a period of 48 days.

In summary, the “Average” buyer in 2022:

• Looked at 22 homes
• Took a little under 90 days to find and secure a home
• Had a closing period of 48 days.

Anecdotally, all of these numbers are up from previous years. Some buyer transactions were more complex than in previous years and took more time; we still generally see 30 days from offer to close as acceptable though this will vary depending on holidays in between and other factors. The upside of this is that buyers have more to choose from. We will finish 2024 with a housing supply of 1.9 months. During the late summer of this year we peaked at 2.6 months. The last time we saw a housing market with this amount of supply was pre-COVID (Second half of 2019). Take a look at the data below for a more detailed view:

A balanced market for buyers and sellers is 3-6 months of supply, so the market generally favors sellers still while buyers have gained more power and aren’t at the mercy of sellers the way they were from 2020-2023. Depending on where mortgage rates go in 2025, this seems likely to stay stable or contract again. While I would love to see it go down for buyer’s sake I don’t see that as likely. Speaking of mortgage rates, the average rate for a mortgage in 2024 sits at 6.88%. The majority of buyers (>80% in my clients’ cases) in 2024 made their purchase with a conventional loan.

Seller Statistics

Throughout the year, I saw signs of a bifurcated market; certain segments moved as quickly as they have in recent years with desirable properties accepting offers in mere hours, while the bulk of these seemed to have accepted in the first three days of listing. At the same time, some properties languished on the market for weeks before accepting an offer (often after taking price reductions). Single family homes through  November 0f 2024 are on the market an average of 47 days. Townhomes are on the market an average of 56 days currently and condo properties are spending an average of 81 days on the market. Single family homes are moving slower than a year ago, and this is supported by housing supply noted in the first section. The reason for longer times relating to condos and townhomes is twofold – we are finding a good number of homeowners’ associations are dealing increased costs in the form of deferred maintenance and insurance premiums, and there is a significant portion that are dealing with mismanagement resulting in low cash reserves making them undesirable to potential buyers. The latter type of complex tends to drag down the market statistics and the former creates worry for potential buyers trying to make the best decision for them.

At their peak in June of this year, homes sold on average for 100.7% of their original price. Using a rolling average of three months, this currently sits at 98.2% but what is more notable, is the past three years have seen the peak go from 104.7% of the original list price to the aforementioned high of 100.7% As I noted earlier, this supports the idea that more parity has come to the market and buyers are not always writing over asking.

In general, houses below the average sales price of $466,910 [Data based on previously owned, single family homes, sold traditionally (not lender owned)] are selling faster than those above or considerably above the average price. For example:

• Homes priced from $300,000 to $475,000 averaged 31 days on market for 2024. (Up 6.9% YoY)
• Homes priced from $475-600,000 spent an average of 41 days on market. (Up 13.9% YoY)
• Homes priced above $600k spent an average of 51 days on market (Up 15.9%)

Market performance of listings

Without going TOO deep, the average single family home listed this year was showed 15 times before accepting an offer. This is down 6.3% from the previous year. The actual amount of showings can vary greatly by neighborhood, property type and price range though so this is absolutely a “Your mileage may vary” situation. At the same time, we saw 35,898 new listings in 2024 (up 6%) and 28,320 closed sales (up 2%) through November of this year.

From this we can say that more listings and slightly more buyers than the previous year resulted in less competition between buyers when it comes to securing the ideal home. These buyers feel more comfortable in adding inspection contingencies to their offer, though the market still leans slightly to sellers.

Affordability and its relationship to buying and selling

2024 saw the first Fed rate cut in recent memory with .5 percentage points in September and .25% in November. It’s been hoped that this would spur buyer activity but the direct effect for borrowers has been less than hoped with mortgage rates still in the high 6% range. For the first week of December, lenders I work with reported rates for a 3 year fixed at 6.68% [Liz’s number needed here]. While things appear to be trending downward, those recent cuts didn’t result in immediate reductions to ratesthat buyers felt meaningfully.

One way real estate affordability is measured is through affordability indices – while there are several different versions available, here is one that is also clearly color-coded to show whether housing is considered “affordable” or not. Clicking the tab for “drivers” shows some of the factors that are contributing to the affordability issue – in the last few months insurance and taxes have taken a bite out of homeowners’ ability to make the purchase. That’s not to say that home price and mortgage rates are helping either – the average price of a home in the Twin Cities Region of MN is up 4.2% year over year (YoY) to $449,546. If you cross the river to St Croix County the price gets slightly better but the growth in expense is still there at 5.8% YoY.  Pierce Co currently sits at $385,371 for the average home price (up 9.3%).

Graphs can only do so much, however, and lived experiences are also relevant to potential buyers and sellers. Here’s what I am seeing as some potential trends:

1.  Sellers are opting to stay put when there’s not a clear benefit to moving – the cost associated with moving up from an historically cheap mortgage can outweigh moving. Many news outlets have referred to this as being “locked in.”
2. Sellers are less likely to make incremental moves – gaining an extra bedroom or garage stall doesn’t make financial sense for many, but moving further away (or closer to family) for affordability and gaining additional space can make a move “make sense.”
3. Buyers are turning to family for help in getting over the down payment hurdle – in recent years I have seen a lot more buyers getting gifts from family for down payment purposes. I have also seen more buyers co-borrowing/co-signing for mortgages. This often includes a parent on the loan application to obtain a higher approval amount.

External Factors

As noted above, costs such as property taxes and insurance (among others) contribute significantly to a buyer’s ability to afford a home. A homeowner’s mortgage payment is primarily made up of the principal [borrowed amount] and interest payments. Comparing homes in the average price point for Minneapolis and Burnsville as an example, and using a 10% down payment, we arrive at monthly payments of principal and interest for the average home of $2,640. These homes also have average annual taxes of $4,500-5,000 and insurance costs estimated at $2,000 annually. For most this will be rolled into their monthly payment (also referred to as “PITI” which stands for principal, interest, taxes, and insurance). Those last two items bring the average monthly payment to around $3,200 (≈ $400) which represents approximately 17% of the total payment. This absolutely affects what a buyer can afford in a home.

Another issue unique to condo and townhome buyers is association dues – this can often include insurance costs, but also represents the costs of maintaining shared spaces and “amenities” (such as pools, greenspace, driveways etc). While exact data is hard to pin down, discussing with clients who own condos and townhomes an 8% increase in dues is not uncommon for the past twelve months. If you already pay $400 monthly, adding another $35 each month will add up. The reason for this is that, in my view, many of the homeowner’s associations around the metro have aging infrastructure that needs to be addressed to maintain safety and they are planning for those expenses by putting the burden on homeowners. The other two issues some (but not all) associations are facing are insurance and underfunded reserves. Many associations locally were hit with storm damage in the form of hail to roofs, and the direct costs of those claims plus the increased insurance costs following have been a blow to associations and individuals alike. The other part is the underfunded reserves; penny pinchers on association boards were historically loathe to approve projects and scrutiny from tragedies like the Surfside Condos in Florida have mean that these associations may not be able to legally ignore the deferred maintenance. While long-time owners enjoyed cheap dues, today’s condo and townhome owners are paying the price to maintain common elements.

Conclusion

There should be no disagreement that buying and owning a house comes with challenges in this market, but in general the market in the past twelve months has balanced some, and buyers are in a better position to purchase if their personal finances allow it. 2024 was certainly better than the previous year though, and we are generally seeing some improvement in terms of the buying EXPERIENCE for buyers. I work hard to educate my clients so that they feel comfortable with their purchases and it is critical to me that potential and planned buyers alike get the answers they need to make the right decisions. If you or someone you know is considering buying or selling – reach out! I love mining the data and answering the tough questions to help make the right decision for you. Whether that’s staying put or making a move, being confident that you made the right choice today is the best feeling you can have.

Curious to know my thoughts for the coming year? Reply to the email you were sent this in or drop me a text message and let me know what questions you have for the upcoming year.