Right now there are only 189 single family homes for sale in Minneapolis. The median list price of these homes is $350,000 with 3 beds, 2 bath, 1,764 square feet, with an average of $216 per square foot. Of the 189 listings, 44 or 23% are priced between $200,000-$300,000. Another 56 of 189 or 29% of the market is priced between $300,000-$400,000. So 52% of the market is priced between $200,000-$400,000. Another 20 of the 189 listings are priced between $400,000-$500,000. So 62% of the market is priced between $200,000-$500,000. If we see more properties jump from the 300-400k range, with more going above 500k, I think that is when we will see a real slow down in the market because most first time home buyers will not be able to purchase at those prices.
First time home buyers make up a large segment of the market so if they can't afford the homes, then we will see lower demand. With that being said, we still have a lot more demand compared to supply. Right now there are about 13 buyers that tour a listing by the time it sells. Each one of those showings is a buyer interested in purchasing the home, many will end up making an offer, but only one will end up with the home. So that means there are around 13 buyers per home for sale in Minneapolis. So we will probably see price appreciation this season, but it will not accelerate as much as it did over the last 12 months. Interest rates will be increasing and that will increase mortgage payments. As a result, some buyers will be priced out of the market . Be very careful buying in this market. Costly repairs that you didn't see on your tour or on the inspection can really set you back financially. Most of these old Minneapolis houses need a lot of work so keep your eyes opened for problem areas during your showing. If you need help buying or selling give me a call.