Local Market Conditions & home prices

It has been all over the news that in 2024 home sales were at 1995 levels which means low. The population has grown since 1995 and there are more houses too.

I pulled some numbers from the MLS and made a chart that shows the number of home sales over the last five years. It isn’t that houses aren’t selling. They are selling and prices are at an all-time high. Home sales were lower last year because fewer homeowners decided to sell. Higher interest rates were partly responsible. Move-up buyers did not want to move up to a higher-interest mortgage.

The new Trump tariffs will lead to inflation and higher interest rates. I’ll go out on a limb and predict that there will be fewer home sales in 2025 than there were in 20204. I’ll have some numbers for January 2025 home sales tomorrow.

December 2024 could best be described as a sluggish month for home sales. There were more pending sales than new listings. Fewer people put their homes on the market in December but this December there were even fewer new listings.  Prices are holding and days on the market are less than a month. Demand is still strong even though rates are high and houses are expensive.

Data from the NorthstarMLS which is deemed reliable but isn’t guaranteed was used to make the chart below.  I have been making these charts for almost 20 years. I have been selling real estate for 23 years and this year marks the 10th anniversary for my company, Boardman Realty, a local woman-owned and operated independent real estate company.

The numbers are a breakdown of home sales by St. Paul neighborhood. Townhouses and condos are included but rental properties and commercial properties are not. I import data from the MLS into a spreadsheet and sort and subtotal by neighborhood. I like data and I understand it.

Real estate is local and it is important to look at trends at the city and neighborhood level.

Real estate sales are local and somewhat seasonal.  Like most Novembers, we see a decrease in new listings and in home sales. Overall homes are selling quickly, for close to or slightly over the asking price. Yes houses do sell during the holidays. Often homeowners are unaware that the spring home sales season starts in January. We start getting calls in January from people who want to sell in the spring. Getting that house on the market by February is ideal.

The table below is a snapshot of home sales in November 2024 in St. Paul Minnesota. The numbers include single-family residential units and the data comes from the NorsthstarMLS which is deemed reliable but not guaranteed and includes most of the homes sold in St. Paul.

I’ll have some numbers for the whole state of Minnesota next week, and a look at mortgage interest rates tomorrow.

This is from Minnesota Realtors which is our state association of Realtors.

October Year-Over-Year Summary of Key Market Indicators: 

• Closed sales: 6,141 (up 2.9%)
• Median sales price: $347,500 (up 5.3%)
• Average sales price: $404,815 (up 5.1%)
• New listings: 8,005 (up 9.1%)
• Pending sales: 5,835 (up 10.4%)
• Days on the market: 42 (up 10.5%)
• Homes for sale: 16,281 (up 8.2%)

“Despite mortgage rates hovering between 6–7% throughout October, buyers seem to be adjusting as pending sales rose a strong 10.4% statewide. Supply levels have increased across Minnesota, but overall levels remain low due to a lack of new home construction. Existing sellers who would ordinarily move up the housing ladder and free up their first-time home feel “locked in” to their favorable mortgage rates.

There are signs of change, but housing demand has fallen due to the affordability crisis. The persistent housing shortage has continued to push home prices up, just as the Federal Reserve hiked interest rates to combat inflation. Prospective home buyers are still feeling the triple punch of higher prices, higher mortgage rates, and limited inventory.”

Can we build our way out of the housing shortage or will more housing become available as the oldest baby boomers turn 80 in 2026?

Real estate is local. Here is a quick look at what is going on in your neighborhood.

The overall median home sale price in St. Paul was slightly lower than the asking price which means that home prices are not going up as quickly as in past months. Prices continue to go down in downtown St. Paul. Bargain hunters should pay attention to monthly HOA dues which are up. The number of home sales and new listings are up slightly in October as is the Median home sale price.

The data used to make the table was extracted from the NorthstarMLS which is deemed reliable but not guaranteed.