As we progress through 2025, it's essential to stay informed about the latest developments in the real estate market, both locally and nationally. This newsletter provides insights into the Minneapolis housing landscape, national trends, and current interest rate information to assist you in making informed decisions.
Twin Cities Housing Market Trends
The Minneapolis real estate market is showing signs of being a somewhat competitive market.
We are seeing a trend of homes selling both over and under asking price, indicating a varied market.
Pricing Trends
Median home sale prices have shown year-over-year increases. However, there are variances depending on the size of the home.
It is important to note that different sources show slightly different median home prices. Therefore, it is important to consult with a local real estate professional.
Inventory and Sales
The number of homes for sale in February 2025 was 3,066, a 13.9% increase compared to January 2025. This shows an increase in available inventory.
The number of homes sold in February 2025 was 575, a 15.8% decrease compared to January 2025.
Downtown Minneapolis Office Space Dynamics
The commercial real estate sector in downtown Minneapolis is undergoing significant changes. Notably, an office tower that sold for $200 million in 2016 was recently traded for just $6.25 million, reflecting a 97% decrease in value. This sharp decline is attributed to the rise of remote work, leading to decreased demand for office spaces. Despite this, there are positive signs, such as rising condominium prices and a rebound in tourism, indicating a potential revitalization of the downtown area.
National Real Estate Insights
U.S. Housing Market Outlook
Nationally, the housing market is experiencing a period of stabilization. In January 2025, U.S. home prices saw a 0.6% increase compared to the previous month, slightly accelerating from the 0.5% growth observed in prior months. However, this growth is tempered by a slowdown in sales and an increase in listings, suggesting a potential cooling in price appreciation as homes remain on the market longer and sell below list prices.
Rental Market Trends
The rental market is also undergoing notable shifts. Rents across the 50 largest U.S. metropolitan areas have decreased, providing some relief for renters, especially those earning minimum wage. The median rent in November 2024 fell to $1,703, marking the 16th consecutive month of decline. Despite these reductions, overall rents have risen significantly since 2019, and affordability challenges persist, particularly in cities with lower minimum wages.
Interest Rate Overview
As of February 2025, mortgage rates have experienced a slight decline. The 30-year fixed-rate mortgage averaged around 6.9%, the lowest point in approximately two months. While still elevated compared to historical lows, this reduction may provide some relief to prospective homebuyers. However, it's essential to consider additional homeownership costs, such as property taxes, insurance premiums, utilities, and maintenance, which can significantly impact monthly expenses.Â
Neighborhood Spotlight - Armatage
The Armatage Neighborhood Association (ANA) is the nonprofit neighborhood organization for the Southwest corner of Minneapolis. The ANA hosts monthly neighborhood board and committee meetings, year-round events, free workshops, and programs. All are welcome and encouraged to get involved, whether you rent, own a home or represent a neighborhood business or institution.
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