No Comments

December 2022 Housing Report

Inventory is up, but high interest rates continue to dampen activity
MINNEAPOLIS (January 11, 2023)
 — In December, closed sales fell almost 39% across the state compared to a year ago, marking 12 straight months of declines. New listings were 17% fewer than last year with 3,031 new properties coming on the market in December. With buyer demand slipping, homes were staying on the market longer, up 24.3% to 46 days. Sellers were accepting offers that averaged about 96% of the home’s original asking price. The overall number of homes for sale was up 15.3% compared to last year rising to 9,204 properties and putting a month and half of inventory in the pipeline, which is a 50% increase over December 2021. Despite decreased buyer activity, the median sales price notched up 1.7% to $305,000.“The overall trend in 2022 was a return to normal market conditions,” said Chris Galler, CEO of Minnesota Realtors. “Every year-over-year decline in closed sales we measured on a monthly basis was compared to the extraordinary activity of 2021. As we head into 2023, we’ll hopefully see declines level off, setting the stage for a healthy resurgence of sales in the spring. Interest rates, of course, remain a critical factor. As December closed, the rate on a 30-year mortgage rose to nearly 7%. By early January, it slipped to just over 6.5%. Still, potential buyers and sellers are wary, cautiously waiting to see which way the housing trends will go. Big picture: All the indicators show a market that has slowed but is fundamentally healthy and ready to resurge when inflation eases.” 

May be an image of text that says '9,204 Homes forSale for +15.3% vs Dec. 2021 $305,000 Median Sales Price 密 Minnesota Realtors® 1.7% vS Dec. 2021 Dec. 2022 Housing Report 4,444 Closed Sales 38.7% vs Dec. 2021 46 Days on Market 个 +24.3% vs Dec. 2021'

December year-over-year summary of key market indicators: 

  • Closed sales decreased 38.7% to 4,444 
  • Median sales price increased 1.7% to $305,000 
  • Average sales price increased 2.6% to $361,159 
  • New listings decreased 17.1% to 3,031 
  • Pending sales decreased 27.6% to 3,344 
  • Days on the market increased 24.3% to 46 days  
  • Homes for sale increased 15.3% to 9,204

% Change YOY in 2022 Statewide Closed Sales 

Month  Closed Sales
January -9.9% 
February -12.9% 
March -8.4%
April -10.9%
May -6.5%
June -13.7% 
July -19.2% 
August -17.0%
September -18.2% 
October -30.7%
November -35.3%
December -38.7%

Closed Home Sales Across Minnesota by Region

In December, closed sales declined in 12 regions compared to a year ago, bringing Minnesota’s average number of closed home sales down 38.7% year over year. The exception was the Upper MN Valley, which saw a 21.1% increase in closed sales. Otherwise, the smallest declines were seen in Southwest at 22.8%, Southwest Central at 25.4%, and Northwest at 30%. The largest declines were reported in South Central and East Central, each at 46.6%, and North Central at 47.3%. See the chart below for more details comparing closed home sales for December 2022 to December 2021.

The seven-county Twin Cities region comprises Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington counties. The official Minneapolis-St. Paul-Bloomington metropolitan statistical area recognized by the Census Bureau consists of 16 counties, on
which MAR & SPAAR local associations report. 

View full regional and county reports here. 

View statewide report here. 

No Comments


Honey, I Shrunk the House. . .

 By MNR News
Ready to chuck the clutter, chaos, and big fat mortgage? It might be time to “tinysize” your life
For a growing number of Minnesotans, downsizing is becoming “tinysizing.” Drawn by the promise of a simple, uncluttered life where possessions are pared down to essentials, these homeowners are investing in dwellings that average 186-square feet or less. Models of minimalism, the typical tiny house has a compact galley kitchen, a living area with a small couch, a bath and shower that’s not much bigger than an airline lavatory, and a loft with a bed.In a state where the average suburban home is at least 2,300 square feet, the idea of living in a house the size a large bathroom can be claustrophobic and stifling. But for the hundreds of Minnesotans now inhabiting tiny-home communities around the Twin Cities and Duluth, abandoning space and stuff is more than a fair trade for the freedom from big mortgages and the chores, maintenance, and expensive upkeep of larger homes. Tiny-house owners typically have more disposable income to indulge their passions, and tend to give more time and energy to their friends and communities.

“Tiny living isn’t just about tiny houses. Tiny living is about life simplification; about doing what makes you happy,” said Jenna Spenser, a filmmaker who regularly posts videos about the tiny-house lifestyle on her website, Tiny House Giant Journey. “I don’t work for my house, it works for me. . . . It’s not going to be a burden on you, like a lot of houses are. It’s going change your life. It’s going to help you reach your dreams. . . . And that’s what the tiny house movement is to me.”

Save, Steward, Simplify

Although priced dramatically lower than conventional homes, tiny houses are not cheap—at least not by the square foot. Recently, a 176-square-foot tiny house on wheels in Moorhead sold for $53,000—or about $300 a square foot. By contrast, a 2,300-square-foot home selling for $350,000 is closer to $150 a square foot. A lot of the expense comes from the high degree of customization for things like cabinetry, stairs, bathroom, water heaters, kitchen appliances, and other features. Still, because the overall cost is so low, nearly 70% of tiny-home owners do not have a mortgage. And those that do are able to pay them off within a few years as opposed to decades.

Demographically, tiny-home owners skew older. Almost 40% of them are over 50, and more than half are women. They tend to be highly educated—twice as likely to have a master’s degree as the average homeowner. Many have owned conventional homes but downsized after raising children, divorcing, or the death of a spouse. Across all age groups, they are environmentally conscious and chose a tiny home in part to lower their carbon footprint and overall impact on the planet. And whether their homes are permanently anchored on concrete slabs or on wheels and ready to roll, tiny-home owners save enough on house-related expenses to travel more often than owners of conventional homes.

While saving money is a big plus, the urge to declutter and simplify is one of the driving forces behind the tiny-house movement. This is an especially big factor for women. In a study of married couples with children, the Journal of Personality and Social Psychology found that the burden of housework tends to fall unequally on women. Their overall stress was higher than that of their spouses, as measured by raised levels of cortisol, a hormone released by adrenal glands. Clutter, and the cleaning projects associated with it, played a large role in anxiety and unhappiness.

Do Your Research

For Minnesotans who want to toss the clutter, ditch the big mortgage, and go tiny, there are several factors to consider. First, check out the building and zoning codes in the community you would like to live. Some cities do not allow tiny homes, and others impose tight restrictions on where the homes can be placed. Duluth and St. Paul recently changed zoning laws to allow tiny houses.

Minnesota law favors tiny houses that are built on site, attached to a foundation, and intended to be permanent. In official parlance, they are classified as accessory dwelling units (ADUs). By contrast, tiny homes mounted on wheels are designated as recreational vehicles. Strict laws in many Minnesota communities often make it illegal to park such dwellings, even if you own the land. One exception is The Sanctuary Minnesota Village, a privately owned parcel where owners of tiny houses on wheels can lease parking spaces.

ADUs must meet all the building codes for normal dwellings, plus additional requirements for safety and habitability. This includes minimum sizes for bathrooms, kitchens, and loft areas; openings for emergency escapes and rescues; and specific codes for electric, plumbing, and mechanicals. Learn more by visiting the Tiny House Guide to Minnesota.

If you’ve been thinking about going tiny but aren’t ready to make the big move, you can taste the minimalist lifestyle by renting a tiny vacation getaway in Minnesota. Ultimately, while small spaces and less stuff might not be for everyone, there are elements of tiny-house philosophy that can bring more order, less clutter, and greater happiness to even the most palatial homes. As decluttering guru Marie Kondo advises in her book, The Life Changing Method of Tidying Up, if something doesn’t “spark joy,” get rid of it. Whether this perspective helps you clean out a closet or empty an entire house, it could mark the beginning of a fulfilling journey, no matter how tiny or great.