The Covid-19 pandemic has disrupted the real estate industry in 2020. During the first quarter of the year, Minnesota real estate market also recorded a decline in property sales when lockdown and restriction of movement measures were implemented as there were less inventory and interested home buyers. According to the data from the Minnesota Realtors, the Minnesota housing market recorded a 24.2% decline in new listings and 20.4% in home sales compared to a similar period in May 2019.

However, as the state started to partially-reopen the economy in June 2020, the number of new listing started to increase. Currently, the Minnesota real estate market is showing some positive signs which is an indication that the market has already started bouncing back. 

The biggest challenge that remains to be resolved is the shortage of inventory. Real estate experts had earlier projected that the inventory would stabilize by the end of last year but many home sellers opted to withdraw their listings or not list at all when the COVID-19 pandemic crisis started.

As a result of the low number of houses listed for sale, the Minnesota housing market has largely remained a seller’s market. Recent data from the Minneapolis real estate market indicated that as of June 2020, there was a 5.8% increase in median sales prices for listed homes which pushed prices to $287,500 nationally. Also, in the same period, the median sales price for houses in the Twin Cities metro area hit a record high of $305,000.

Going by the current market trends, Minnesota real estate market is likely going to remain a seller’s market in this last quarter of 2020 and we expect to see the trend continue in the first quarter of 2021. The rising shortage of listed houses for sale coupled with high demand for homes will create a strong seller’s market. We can project that the shortage in housing inventory will continue and this will drive the cost of housing even further.

Therefore, if you are looking for an investment property, the Minnesota real estate market is going to be profitable even in 2021. You can count on Minneapolis and Twin Cities metro areas as the best areas to buy an investment real estate property. They have a moderate price to rent ratio of 18 which is a good indicator that most local residents here would prefer to rent rather than buy a home. With a projected high occupancy rate, it’s a clear indication that Minnesota real estate market presents a good investment opportunity going into the future.