You May Be Busier Than Ever As Minnesota’s 2021 Real Estate Market Heats Up
Despite the onset of the COVID-19 pandemic last year, the Minnesota real estate industry has quickly bounced back. In 2021, markets across the state are forecasted to continue that upward arc. With high demand, waning unemployment rates, and rapidly rising home sale prices, real estate agents all across Minnesota should gear up for another booming year.
2021 Minnesota Real Estate Outlook: Heating Up
In November 2020, the average home in Minnesota was priced at $274,571, a 5.8% increase year-over-year. There’s little sign of prices stalling, though, as Zillow predicts this figure will rise another 7.6% within the next year. Rising prices echo the gradual healing of the economy statewide, signaling that this year could be profitable for agents and sellers alike, while low-interest rates maintain some degree of affordability for buyers.
Along with rising home prices, home sales statewide grew 15.8% year-over-year in November 2020. Days on market also fell a significant 25.5% from 51 to 38 days during that same period. Between lasting low-interest rates and unseasonably strong demand, Minnesota is a seller’s market as 2021 unfolds.
After the economic tribulations of 2020 and in the midst of a national big city exodus, rent prices increased only 2.9% statewide and even decreased a significant 7.7% in the Minneapolis metro area. Meanwhile, a total of 0.6% of Minnesota homeowners fell delinquent on their mortgage, the seventh-lowest rate in the nation, and equity slipped into the negative on only 2.5% of homes statewide. So, while new transactions boom and attractive rent prices draw more and more people to Minnesota, current homeowners continue to thrive as well.
2020 Minnesota Real Estate Market Data
|Zillow Home Value Index||$274,571|
|1-Year Change on Home Values||+5.8%|
|1-Year Change on Rent Prices||+2.9%|
|Homes With Negative Equity||2.5%|
|Delinquent on Mortgages||0.6%|
|Buyer’s or Seller’s Market||Seller’s|
Market Insights for Minnesota
In November 2020, the Minnesota Department of Employment and Economic Development reported Minnesota’s unemployment rate had dropped 1.3%, landing at 4.6% statewide. A full two percentage points below the national average, Minnesota’s job market shows promise. As healthy economic activity often correlates with growth in the real estate industry, narrowing unemployment rates are a positive sign for agents the year ahead.
In fact, the positive impact of this stimulation can be observed in a measurable way. In December 2020, state officials announced a forecasted budget deficit had materialized in a $641 million surplus. This stimulation to the local economy is due in large part to higher consumer spending and business investment. This illustrated disposable income and healthy spending are great signs for agents statewide as we kick off the new year.
Despite the traditionally hot spring and summer buying seasons far behind us, pending sales reached a new record high of year-over-year growth, spiking to 27.7% in October 2020. This momentum illustrates a departure from the typical seasonality of home buying and is a good sign for the coming colder months. Buyers are still eager to commit, even without the draw of spring curb appeal and warm-weather open houses.
With a strong 2021 forecasted, Minnesota real estate agents will need to be at the top of their game. From buyers battling rising prices to sellers fielding multiple offers, there has never been a better time to serve your fellow Minnesotans. This year, agents can expect to benefit from and help contribute to a booming local and national economy as the Minnesota real estate market heats up.
Take On 2021 With the Best Minnesota Real Estate Courses From The CE Shop
Enroll in our Pre-Licensing program now to get your career started and begin connecting your fellow Minnesotans with the home of their dreams. Or keep going strong with one of our comprehensive, 100% online Continuing Education packages. Want to stay up to date on everything Minnesota? Join the Midwestern Real Estate Facebook Group!