Local Market Conditions & home prices

According to market analysis from mid-2025, the U.S. housing market is on track to be the slowest in more than 25 years. A combination of high mortgage rates, persistent home prices, and resulting affordability challenges has created a standstill where both buyers and sellers are hesitant to make a move. 

The year isn’t over yet. Here in St. Paul, the median number of days on the market for a house in August was 16 days.  Homes are still selling for more than the asking price. Homeowners are slow to list their houses, but this is nothing new.

Homes are selling quickly and often for over the asking price. Most of the city is experiencing a seller’s market, with a two-month supply of homes for sale, while downtown St. Paul is in a buyer’s market with a 10-month supply of condos.  The condo market is experiencing a slowdown city-wide as high insurance rates result in higher association dues.

The average sales price downtown for July 2025 is high, but only because it is based on six sales, and two of those sales were in Lowertown in the Great Northern building. Each is larger and more expensive than the average downtown condo.

The number of new listings went up a bit in July, which means there are slightly more homes on the market. Prices continue to rise due to high demand and low supply.

The data used in the chart above was extracted from the NorthstarMLS, which is deemed reliable but not guaranteed.

 

Overall economic conditions have a significant impact on the housing market, and the housing market, in turn, has a substantial impact on overall economic conditions. If workers cannot find affordable housing, businesses cannot grow. If people do not have jobs, they cannot buy a house or afford housing.

The overall growth of the Minnesota economy was 0.5% for the first quarter of 2025. No growth is projected for the rest of the year.

The unemployment rate is below the national average. I know a few people who have been displaced by AI (artificial intelligence) this year and I am sure we will see more.

 

 

I have been publishing home sale numbers by St. Paul neighborhood for 20 years. I have watched prices rise, and then there was that one time when they actually went down. For June 2025, home prices are up, and it takes an average of 24 days to sell a house. The median number of days is 11.

For the last several years, the norm for the St. Paul housing market has been a seller’s market. Homes sell for over the asking price with multiple offers.

Home prices and new listings are up month over month, and pending sales are down.  April through July are peak months for home sales in the region. I didn’t expect pending sales to be down. They are also down from June 2024.

About 20% of all homes on the market are in downtown St. Paul, where we are experiencing a buyer’s market. Lower prices downtown make this a good time to buy.

The data used to make the table was exported from the NorthstarMLS and gently sorted, never stirred in MS Excel.

In May 2025, Minnesota home sellers were more active than home buyers, which, in a nutshell, means that there are now more houses on the market. Median home prices rose by less in the metro area than outside of it.

Listings are up and inventory is rising in 2025 while sales remain flat.
Key Updates: According to new data from the Minnesota state and Twin Cities metro REALTOR® Associations, new listings, pending sales, inventory, and prices all rose again in May.

Statewide seller activity rose 5.3% in May and is up 6.3% for the year.
The typical all-in mortgage payment in Minnesota stands at $2,637, including all counties, property types, and price ranges. That’s about $1,000 more per month than in 2021.
Statewide median home price rose 2.8% to $360,000 while the metro’s rose 2.6% to $395,000.