January 2023 Market Insights

Key insights from December 2022 (compared to December 2021)*

• New listings: 2,281 | -11.5%
• Median sales price: $348,660 | +5.2%
• Closed sales: 3,083 | -39.3%
• Pending sales: 2,374 | -27.8%
• Days on market: 50 | +47.1%
• Inventory: 5,914 | +16.2%
• Months’ supply: 1.4 | +55.6%

Twin Cities real estate market ends 2022 on high-pricing, but low-activity, note

The long and the short of it

• Median pricing again rose year-over-year, rising 5.2% to $348,660.
• The supply of homes for sale continues to push upward, having jumped 16.2% from December 2021.
• The market continues to be more about quality than quantity, with fewer sales and listings but higher pricing and historically fast-moving sales.

The 13-county Twin Cities metro closed out 2022 with more high pricing and low activity, continuing a trend of quality-over-quantity that dominated the second half of the year.

Just 3,083 sales closed in December 2022, down nearly 40% from a record 2022 but also the fewest sales we’ve seen in the month of December since 2017. Closed sales for the year fell 19.1%, with 53,714 homes trading hands over the course of 2022.

Fewer sales didn’t mean bad news for sellers, however. The median sales price in December was $348,660, up 5.2% from last December. The median price of all sales in 2022 was $362,500, a new record high and a 6.6% gain over 2021.

As a reminder, the market hadn’t even seen median pricing over $300,000 until early 2021. Now it’s remained above that mark for 22 consecutive months.

Although higher mortgage rates have cut into some buyers’ budgets, well-maintained homes in desirable locations are still attracting plenty of interest – the market is just low on properties to buy.

In December, just 2,281 homes were newly listed for sale, an 11.5% dropoff from December 2021. Fewer listings was a persistent trend all year, with 2022 finishing at 10% fewer than the year before. The listing activity was also the lowest the Twin Cities has seen since December 2018.

Inventory levels remained low in December. At the end of the month, there were 5,914 listed properties. That’s a 16.4% year-over-year increase, but would amount to just 1.4 months of supply, still well off the five- or six-month supply that’s considered the sign of a balanced market.

The low inventory should continue to put upward pressure on pricing, but the lack of new homes on the market could slow down the pace and competitiveness of sales. In December, two metrics showed that trend: days spent on the market, and percentage of original list price received.

The typical home spent 50 days on the market before selling in December, a 47.1% increase over last year. That’s the slowest sales pace since early 2021, but is still well below the 60 to 80 days that typical homes have spent listed over the past 10 years.

Sellers received just 96.3% of their original list price in December, the lowest that metric has been all year. That could be good news for buyers, who on average have paid more than 100% original list price for homes over the past two years.

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

• Minneapolis-St. Paul area unemployment rate: 1.9% (as of November 2022)
• Average rates for 30-year conforming mortgage 6.15%**
• Interest rates fell steadily throughout December, getting close to dipping below 6% for the first time since September.

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 December 2022.

**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: 24 | -23%
• Avg. sales price: $248,284 | -9%
• Pending sales: 40 | -29%
• Days on market: 37 | -10%
• Inventory: 1 | -99%
• Months’ supply: 1.2 | +33%

Brainerd area

• New listings: 175 | -8%
• Avg. sales price: $323,537 | +5%
• Closed sales: 260 | -39%
• Days on market: 47 | +12%
• Inventory: 646 | +31%
• Months’ supply: 1.5 | +50%

Lake Superior area

• New listings: 100 | -31%
• Avg. sales price: $253,739 | -7%
• Pending sales: 210 | -34%
• Days on market: 32 | -11%
• Inventory: 498| +16%
• Months’ supply: 1.7 | +42%

Southeast Minnesota area

• New listings: 196 | -31%
• Avg. sales price: $289,461 | +2%
• Closed sales: 347 | -35%
• Days on market: 44 | +19%
• Inventory: 657 | +26%
• Months’ supply: 1.4 | +40%

St. Cloud area

• New listings: 44 | -25%
• Avg. sales price: $275,301 | +16%
• Pending sales: 73 | -23%
• Days on market: 41 | +37%
• Inventory: 135 | +21%
• Months’ supply: 1.1 | +57%

Mankato area

• New listings: 55 | -24%
• Avg. sales price: $227,566 | -5%
• Pending sales: 57 | -39%
• Days on market: 73 | +1%
• Inventory: 249 | +27%
• Months’ supply: 1.6 | +45%

West Central Minnesota area

• New listings: 89 | -42%
• Avg. sales price: $188,611 | +1%
• Pending sales: 128 | -36%
• Days on market: 57 | +27%
• Inventory: 413 | +3%
• Months’ supply: 1.8 | +20%

Northwestern Wisconsin area

• New listings: 144 | -29%
• Avg. sales price: $286920 | +4%
• Closed sales: 310 | -36%
• Days on market: 87 | No change
• Inventory: 881| -13%
• Months’ supply: 1.8 | -10%

Bemidji area

• New listings: 10 | -68%
• Median sales price: $255,000 | +31%
• Pending sales: 23 | -44%
• Inventory: 74 | +3%
• Months’ supply: 1.5 | +25%

Leech Lake and surrounding area

• New listings: 18 | -5%
• Median sales price: $242,000 | -12%
• Pending sales: 27 | -4%
• Days on market: 32 | -6%
• Inventory: 74 | +21%
• Months’ supply: 1.5 | +36%

Little Falls area

• New listings: 11 | -21%
• Median sales price: $175,950 | +1%
• Pending sales: 13 | +18%
• Days on market: 15 | -50%
• Inventory: 23 | +15%
• Months’ supply: 1.2 | +50%

Southwest Minnesota area

• New listings: 34 | -41%
• Median sales price: $159,500 | +14%
• Pending sales: 61 | -23%
• Days on market: 61 | +17%
• Months’ supply: 2.1 | +40%

Headwaters area

• New listings: 17 | -60%
• Median sales price: $248,750 | +19%
• Pending sales: 47 | -25%
• Days on market: 47 | -20%
• Months’ supply: 1.9 | +36%