The Minnesota housing market in February 2025 presents a complex landscape characterized by modest price increases and declining sales activity. The Median Sales Price for homes in the state reached $353,000, marking a 2.8% increase year-over-year (YoY). Similarly, the Median List Price rose to $374,100, reflecting a 2.6% YoY growth. These figures suggest a steady appreciation in home values, albeit at a moderate pace.

Despite the upward trend in prices, the market is experiencing a contraction in sales volume. The number of Homes Sold in February was 3,301, representing a significant 7.5% decline compared to the previous year. Pending Sales also saw a sharp decrease, down 15.6% YoY to 4,122. This downturn in sales activity indicates a cooling demand, possibly influenced by economic factors or buyer hesitancy.

New Listings in the market totaled 4,606, a 13.2% drop from the previous year. This reduction in New Listings contributes to the overall inventory, which stands at 8,839 homes, down 5.4% YoY. The Months of Supply, however, increased by 10% YoY to 2.7 months, suggesting that while fewer homes are entering the market, the existing inventory is taking longer to sell.

The median Price Per Square Foot for Homes Sold was $185, a 3.1% increase YoY, while the Median List Price per square foot was $197, up 2.7% YoY. These metrics indicate that buyers are willing to pay more per square foot, reflecting the overall price appreciation trend.

Homes are spending more time on the market, with the Median Days on Market rising to 55 days, a 4% increase YoY. This extended time on the market could be a result of the higher prices or a shift in buyer preferences. The average sale to list ratio slightly decreased to 98.6%, down 0.3% YoY, indicating that sellers are receiving offers closer to their asking prices, but with less frequency than before.

The percentage of Homes Sold above list price dropped to 27%, a 2.3% decline YoY, suggesting that competitive bidding situations are becoming less common. Conversely, Price Drops have increased by 2% YoY to 22%, indicating that sellers are adjusting their expectations to align with market conditions.

Interestingly, the percentage of homes going off the market within two weeks rose to 47.6%, a 2.6% increase YoY. This suggests that while overall sales are down, there is still a segment of the market where homes are selling quickly, likely those that are priced competitively or in high-demand areas.

In summary, the Minnesota housing market in February 2025 is characterized by rising home prices and a decrease in sales activity. While the market shows signs of price appreciation, the decline in sales volume and New Listings, coupled with longer days on market, indicate a shift towards a more balanced or even buyer-favorable market. Sellers may need to adjust their strategies to attract buyers in this evolving landscape.