Housing markets across the United States have seen remarkable changes in recent years and the Twin Cities Metropolitan Area is no exception. Since the onset of the COVID-19 pandemic in 2020, the real estate landscape across the metro has shifted time and again to meet the changing needs and wants of buyers in an undersupplied market. All the while, Minneapolis Area Realtors® (MAR), with over 9,500 members, has served clients large and small, first-time home buyers and more established move-up households, and provided the services and expertise critical to being successful in the ever-changing world of real estate. This undertaking spotlights the Twin Cities (and occasionally national) homebuyer and how their tastes, needs and budgets have evolved over time.
“Today’s home buyers need to be adaptable and persistent. They’ve had to navigate years of undersupply, a pandemic and now higher interest rates,” said MAR president Jerry Moscowitz. “Our research shows how Twin Cities home buyers are adapting to higher interest rates and monthly payments by pursuing different housing options and based on what they now now qualify for. We have gone from a market where a house just being available made it attractive, to a market where condition of the house is more important than ever. Ultimately, real estate can be like a pendulum—just when you think we’re headed one way, the market shifts and back we swing.”
Given the broad nature of the topic, it’s important to hone in on some core questions that most would find most valuable: What are buyers buying? How are they buying it? Who is buying? Where are they buying? And what are they spending? Dissecting these topics will hopefully facilitate a new and deeper understanding of this complex topic. Predominantly sourcing data from the Northstar Multiple Listing Service, readers will take from this paper a better understanding of how buyers have adapted to a “new normal.” This analysis will dive deep into home size, bedroom count, price and product type. It will also assess financing type and cash utilization. The topic of investor ownership will be examined briefly with the intent of providing an overview but also to raise critical, unanswered questions. The data will illustrate the shifts between urban and suburban markets, and it will also reveal who is buying a home and when. The intent is not to thoroughly answer every possible question about home buyers but rather to provide a starting point for the conversation about the many changes and their implications moving forward.