2011 Minnesota Housing Market

Rebuffed by the expiration of the federal home buyer tax credit, Minnesota home sales are down as homeowners wait for spring time sales to pop back, while bankers slash housing prices on foreclosures to get them off the books. The Minnesota market, which has endured so much and appeared as though it may have been recovering, is in a second downturn.

St. Paul

Home sales slid in the latter part of 2010 after the federal tax credit expired in Minneapolis as buyers became increasingly uncomfortable about the market, despite near record low mortgage rates. Sales in St. Paul, the other half of the Twin Cities also slipped, producing lower home prices for the region.

Record high foreclosures have slowed in the area as bankers investigate whether foreclosure procedures were handled correctly amid growing allegations of improprieties over the foreclosure crisis.

The massive volume of homes that make up the inventory of properties that have been foreclosed and those not yet counted as formally being taken back by bankers in the shadow inventory are pressuring the markets and home prices in the Twin Cities. Minneapolis average home prices are forecast to decline 4.8% in 2011, while St. Paul will take a larger hit forecast at 5.7% for the year.

The housing market in Duluth is a bit better off than the Twin Cities with similar home sales figures for the past two years in a row, but the prices on homes that are selling is slipping like most places in the country. The inventory or number of homes listed is also increasing, and that demonstrates a weaker housing market may be in the offing for Duluth, which shares a metro area with Superior, Wisconsin as the Twin Ports.

Home sales are expected to remain slow through the winter in Duluth as winter weather rolls into the region providing one of the colder climates in the U.S. The market is forecast to produce more home sales in the spring with near record low mortgage rates, but average deflation of 4.2% for the year.

Duluth

Home sales are expected to remain slow through the winter in Duluth as winter weather rolls into the region providing one of the colder climates in the U.S. The market is forecast to produce more home sales in the spring with near record low mortgage rates, but average deflation of 4.2% for the year.

On the banks of the Zumbro River in Rochester home sales are still plugging along, but remain slow from the volume experienced during the federal tax credit. Med City as the city is nicknamed for being home to the Mayo Clinic, has seen a drop in the volume of sales over the past year amid concerns over the greater U.S. economy and worries over unemployment. Rochester is expected to see sluggish sales in 2011 on forecast deflation averaging 4.1% for the year.