Minnesota Home Sales Dwindle to Eight-Year Low
Emily Green, president of the Minnesota Realtors, speaks at a Jan. 18 press conference as Minneapolis Area Realtors president Jerry Moscowitz stands near. Winter Keefer

Minnesota Home Sales Dwindle to Eight-Year Low

The median price of a home in Minnesota is now $362,500 and home sales are the lowest they've been since 2014.

In 2022, home interest rates more than doubled, inflation rose, and statewide median home prices reached a new record high. 

All of these factors played a role in the state seeing its lowest year for home sales since 2014, according to a Wednesday news conference highlighting the findings from an annual report by the Minneapolis Area Realtors and the St. Paul Area Association of Realtors. 

This year, sellers listed 68,006 properties, a 10% decrease from 2021. Buyers closed on 53,714 properties, down 19.1%. And, median home prices rose 6.6% to $362,500.

While Emily Green, president of Minnesota Realtors, says the federal interest rate bump into December was not something she welcomed, she noted at the news conference rising rates could trend down as inflation tapers and the state’s job market and the economy remain strong. 

“Although the sales numbers appear discouraging, they demonstrate a correction,” she said. “We are seeing a return to a more normal balanced market like that in 2019 and earlier. Frantic bidding and drive-by home buying have given way to thoughtful negotiations between buyers and sellers. The result is a more equitable transaction for both sides.”

The report pointed out that 2020 and 2021 were very unique years, making it notable to compare 2022 to a pre-Covid year. When compared to 2019, home sales in 2022 were down 10.3%. While market times are up compared to 2021, homes are still selling more quickly than in 2019 and 2020.

While home prices are not rising as quickly as they did in 2020 and 2021, Jerry Moscowitz, president of the Minneapolis Area Realtors, said he doesn’t believe home prices will drop anytime soon.

“For the prices to come down, the supply has to go up to make that change,” he said. “Right now we still have a supply and demand where the supply is short.”

Notably, changes in sales activity varied by market segment:

  • Single-family sales were down 19.2%; condo sales fell 20.3%; townhome sales decreased 17.8%
  • Previously owned sales decreased 20.1%; new construction sales fell 8.3%
  • $1 million or higher luxury sales grew 7.5% to a record high

Brianne Lawrence, president of the Saint Paul Area Association of Realtors, said luxury home prices are up in part because there are so few affordable homes on the market. Hybrid work has also impacted the housing market. Buyers are often times looking for office space. Houses at a lower price point might also be in need of repairs or updates a homeowner is unable to afford. 

“Typically homes $200,000 and under may need new carpet, new paint, new things, and the average buyer doesn’t have the cash to put to that,” she said.