South Metro, MN Real Estate Predictions for 2025

by Todd Priebe

In 2025, the Minneapolis South Metro real estate market is anticipated to experience moderate growth, with conditions favoring both buyers and sellers at different times. Here's an overview based on recent analyses:

Market Trends:

Home Prices: Home values in Minneapolis have seen a modest increase, with a 1.3% rise over the past year, bringing the average home value to $313,874.
Inventory Levels: The housing inventory has increased by 6.1% over 2023, providing more options for buyers.
Sales Activity: Home sales have risen by 3.8% compared to the previous year, indicating a healthy market demand.

Interest Rates:

Mortgage rates are expected to stabilize around 6-6.5% for a 30-year fixed-rate conventional loan, making home financing more predictable for buyers.

Economic Factors:

Minnesota boasts a strong economy with low unemployment rates, ranking seventh in the U.S. at just 3%, which supports a robust housing market.

Expert Insights:

Lawrence Yun, chief economist for the National Association of REALTORS®, forecasts a 9% increase in home sales in 2025, while other experts predict increases closer to 5%.

Considerations for Buyers and Sellers:

For Buyers: The increase in housing inventory offers more choices, and stabilizing interest rates may improve affordability. However, it's essential to act promptly, as desirable properties may still receive multiple offers.
For Sellers: While the market remains favorable, especially in sought-after neighborhoods, pricing competitively and ensuring the property is in good condition will attract serious buyers.

Overall, the Minneapolis South Metro real estate market in 2025 is expected to remain active, with opportunities for both buyers and sellers to achieve their goals.