February 2023 Market Insights

Key insights from January 2023 (compared to January 2022)*

• New listings: 3,285 | -10.6%
• Median sales price: $341,995 | +2.7%
• Closed sales: 2,083 | -32.2%
• Pending sales: 2,560 | -19.3%
• Days on market: 60 | +46.3%
• Inventory: 5,588 | +14.5%
• Months’ supply: 1.3 | +44.4%

New year, same market: Twin Cities sees high pricing, low activity

The long and the short of it

• Median pricing remains high at $341,995, up 2.7% year-over-year.
• January saw just 2,083 homes sold, a more than 30% drop from January 2022.
• The right homes still attract strong buyer interest, according to Realtors in the field, but homes are overall taking longer to sell.

The new year brought few changes to the 16-county Twin Cities metro real estate market, with high pricing and low activity continuing to be the dominant themes throughout the area.

2,083 homes were sold in January 2023, down 32.2% from the same time period in 2022. A lot of that decrease in buyer activity can be attributed to mortgage interest rates, which at 6.1% are nearly double the average interest rate at the beginning of last year.

At just over 2,000 homes sold, January saw the fewest sales in a month in a little over a decade. But the bright side for sellers is that demand remains high for well-priced properties in desirable neighborhoods.

The median sales price in January was $341,995, a 2.7% jump over January 2022. The median price for the Twin Cities had never hit $300,000 until 2020, but did so then and has remained high ever since, with January 2023 marking the 23rd consecutive month above a $300,000 median price.

A large factor affecting pricing has been a low inventory of homes for sale. And while that supply of homes does continue to grow steadily, it hasn’t done so enough to shift the advantage from sellers to buyers.

There were 5,588 homes listed for sale at the end of January, up 14.5% from January 2021. At current rates of activity, that inventory represents a 1.3-month supply of homes. Experts tend to consider a five-to-six-month supply of homes as a sign of a balanced market.

Would-be sellers largely decided to hold off on listing their homes in January. 3,285 new listings hit the market over the course of the month, a 10.6% decrease from January 2022.

While the most desirable homes attracted interest, the market as a whole did see less interest from buyers. Sellers received 96.0% of their original list price at closing, down 3.6% from January 2022, and the average home spent 60 days on the market, a 46.3% increase from last January’s 41-day average.

One factor that may inspire increased activity is the approach of spring. Many agents consider early February as the time marketing the start of the spring market, when home sales start their rise.

Interest rates will continue to be key for buyers as we move deeper into 2023, while sellers interested in achieving attractive prices should still be able to do so, but with a bit more patience.

Economic check up

• Minneapolis-St. Paul area unemployment rate: 2.6% (as of December 2022)
• Average rates for 30-year conforming mortgage 6.12%**
• Interest rates have been higher than 6.0% since September, but are getting closer to falling below that mark again.

Ready to help

We are here to help you confidently navigate your housing needs, now and always. Whether you are researching future options or your circumstances require immediate action, reach out to an Edina Realty agent today for guidance.

*Data courtesy NorthstarMLS for the 16-County Twin Cities metro area for January 2023.

**Data sourced from Freddiemac.com for informational purposes only. Please contact your mortgage consultant for any questions related to specific loan transactions.

Where you live

Edina Realty serves locations across Minnesota and western Wisconsin. Here’s a look at the market indicators where you live. All % changes are year-over-year.

Alexandria Area

• New listings: 28 | -43%
• Avg. sales price: $238,543 | +2%
• Pending sales: 35 | -40%
• Days on market: 48 | +7%
• Inventory: 85 | +4%
• Months’ supply: 1.1 | +57%

Brainerd area

• New listings: 220 | +2%
• Avg. sales price: $330,096 | +29%
• Closed sales: 187 | -19%
• Days on market: 56 | +24%
• Inventory: 584 | +38%
• Months’ supply: 1.4 | +56%

Lake Superior area

• New listings: 134 | -19%
• Avg. sales price: $258,605 | +19%
• Pending sales: 124 | -33%
• Days on market: 36 | +13%
• Inventory: 441| +14%
• Months’ supply: 1.5 | +36%

Southeast Minnesota area

• New listings: 308 | -6%
• Avg. sales price: $286,733 | +4%
• Closed sales: 235 | -31%
• Days on market: 48 | +9%
• Inventory: 620 | +35%
• Months’ supply: 1.3 | +63%

St. Cloud area

• New listings: 78 | -8%
• Avg. sales price: $272,307 | +9%
• Pending sales: 55 | -29%
• Days on market: 51 | +59%
• Inventory: 150 | +44%
• Months’ supply: 1.2 | +100%

Mankato area

• New listings: 86 | -7%
• Avg. sales price: $238,110 | -6%
• Pending sales: 86 | -12%
• Days on market: 86 | +1%
• Inventory: 233 | +35%
• Months’ supply: 1.5 | +67%

Northwestern Wisconsin area

• New listings: 232 | -10%
• Avg. sales price: $289,463 | +1%
• Closed sales: 207 | -38%
• Days on market: 88 | -15%
• Inventory: 860 | -2%
• Months’ supply: 2.0 | +18%

West Central Minnesota area

• New listings: 107 | -36%
• Avg. sales price: $157,194 | -5%
• Pending sales: 117 | -34%
• Days on market: 54 | +4%
• Inventory: 371 | +2%
• Months’ supply: 1.7 | +31%

Bemidji area

• New listings: 29 | +7%
• Median sales price: $281,000 | +18%
• Pending sales: 28 | -22%
• Inventory: 67 | +16%
• Months’ supply: 1.4 | +40%

Leech Lake and surrounding area

• New listings: 26 | +4%
• Median sales price: $186,500 | -9%
• Pending sales: 20 | -35%
• Days on market: 51 | +65%
• Inventory: 63 | +37%
• Months’ supply: 1.3 | +63%

Little Falls area

• New listings: 9 | -36%
• Median sales price: $190,500 | +12%
• Pending sales: 14 | na
• Days on market: 21 | -5%
• Inventory: 18 | -5%
• Months’ supply: 0.9 | +13%

Southwest Minnesota area

• New listings: 43 | -34%
• Median sales price: $141,000 | +5%
• Pending sales: 48 | -27%
• Days on market: 61 | -9%
• Months’ supply: 1.9 | +46%

Headwaters area

• New listings: 43 | -34%
• Median sales price: $141,000 | +5%
• Pending sales: 48 | -27%
• Days on market: 61 | -9%
• Months’ supply: 1.9 | +46%