The highs and lows of Minnesota’s 2025 housing market

The Minnesota Star Tribune’s Hot Housing rankings are based on the price of houses, how many are for sale and how fast they sell.

Yet looking at each of those metrics individually can also reveal certain ZIP codes that make sense for specific homebuyers. And they also help explain last year’s market and what buyers and sellers might expect in 2026.

Last year was wonky.

There were slightly more home sales in 2025 than the year before, yet closings remained near the lowest level in nearly 15 years, according to year-end data from Minnesota Realtors.

With listings scarce, the median sale price rose to a new high last summer, breaking $400,000 for the first time, before the market started to turn.

Since December, pending sales have fallen far more than they normally do at this time of year, and house showings — an indicator of upcoming closings — have also been down.

Some agents say sluggish sales aren’t necessarily a sign of flagging demand. Instead, buyers simply lacked options. At the end of 2025 there were just 12,550 houses for sale across the metro, half as many as a decade ago.

Agents and brokers are at a loss to fully explain what’s holding back buyers.

Kirk Duckwall, a Twin Cities broker with BRIX Real Estate, closely tracks the number of weekly house showings as an indication of how many people are looking.

In early 2025, showings in the $250,000 to $500,000 price range were down 24%, while inventory remained within 1% of the same period in 2024.

“I think there are people who are sitting back and looking at concerns about economic uncertainty and everything else going on out there,” he said.

Activity was down again in the first month of the year after a slow December. Signed purchase agreements in January saw a 13% year-over-year decline, the lowest level in nearly 15 years. Closings, a reflection of deals signed in November and December, were down almost 18%, according to the latest data from the St. Paul Area Association of Realtors.

Still, there were signs of strong demand. Houses sold three days faster in January than last year at the same time, and the shortage of listings boosted prices in some areas. The median of sales prices increased 1.4% to $375,000.

Duckwall and others are optimistic a rebound is on the way for 2026, with price increases moderating and new listings being prepared for the spring market. Based on his analysis, Duckwall expects the spring season, which normally starts in mid-February, to peak later than normal, likely in mid-April.

“We have a bubble of buyers coming,” he said. “They will come faster later and will drop off quicker.”

David Arbit, director of research for Minnesota Realtors, expects 2026 will be a “stabilizing and normal” market that depends heavily on the economy and consumer sentiment.

“I am optimistic. I’m hopeful,” Arbit said. “There’s plenty to be hopeful about, but there are some concerns. So much of it hinges on the [mortgage] rate environment.”

There are more than 80 houses for sale in that area now, including a 3,100-square-foot rambler built in 1965 listing for $105,000.

The city, about 300 miles northwest of the Twin Cities, has fewer than 9,000 residents and is home to major employers Arctic Cat and DigiKey.

Other bargain cities are Albert Lea, Fergus Falls and Willmar, where houses sold for about $136 per square foot.

In Moorhead, Mankato and St. Cloud, slightly larger cities, prices are in the $140-per-square-foot range. In contrast, you’d pay nearly double to live in Stillwater or Hamel. Or triple in Wayzata, one of the most expensive cities in the metro.

The most expensive city was Greenwood, a small town of about 700 residents near Excelsior, where the median price of all closings last year was $2.575 million, according to the St. Paul Area Association of Realtors. Wayzata and Orono weren’t far off.

Because the land value is included in the total per-square-foot price, homes on larger lots and those with lakeshore tend to be far more expensive. That was especially true for sales that included Lake Minnetonka’s shoreline.

In the Twin Cities, waterfront neighborhoods also reigned. The most expensive urban ZIP was 55410, a section of Minneapolis along the western shores of Bde Maka Ska and Lake Harriet. Houses there sold for $351 per square foot.

Not far behind was 55401, a riverfront ZIP code that includes part of downtown Minneapolis, Nicollet Island, the Mill District and North Loop neighborhoods. Properties there, mostly high-end condominiums, sold for $344 per square foot.

The market is considered evenly balanced between buyers and sellers when there’s a five- to six-month supply of listings.

That wasn’t the case in any of the 100-plus ZIPs in the Hot Housing Index.

The Summit Hill neighborhood in St. Paul and communities east of Bde Maka Ska and Lake of the Isles in the Uptown Minneapolis area were also a bit closer balanced.

Outstate, a smattering of small towns like Detroit Lakes and Pequot Lakes had about a three-month supply of listings.

The 55448 ZIP code, which covers Coon Rapids, had less than a month’s supply of inventory last year.

The Longfellow neighborhood in Minneapolis had a similarly low supply of houses for sale. It was one of 23 ZIP codes where inventory was under a month.

Houses in the 55128 area code of the Oakdale area sold in just 28 days, the swiftest of any ZIP code in the index.

The situation was similar in several inner-ring suburbs, including Coon Rapids, Fridley and Champlin, all of which had a 28-day market time.

Upper-bracket buyers last year had the luxury of time. Houses in the 55391 ZIP code, which includes expensive Wayzata and Shorewood, took the longest to sell at 56 days.