Minneapolis Duplex Market Shows Signs Of Change

It seems there’s some balance taking root in the Minneapolis duplex market.

For the first time in nine years, May saw a 4 month supply of inventory in the city. A balanced market, where buyers and sellers are on equal footing, is between a 4 and 6-month supply. May was not unique. In the last six months, the city may have begun to experience some softening. November and January each had a 5-month supply, and February 4 months.

There was further evidence of this in the Cumulative Number of Days On Market, which is the total length of time a property has been recently on and off the market without selling. In May, a property averaged 100 CDOM. That is exactly double what it was one year ago. This March saw a CDOM of 132; 90 days more than March, 2023. This year’s marks were the first triple digit numbers since April of 2016.

Of course, the Days On Market, which tally the length of time a property was on the market before selling in its most recent listing were more positive in May at 45. Note; this number, along with March’s 46 were more in keeping with typical counts we see over the winter rather than spring.

It would stand to reason that if the market is ever so slightly softer than it was last summer it would also be reflected in the ratio of the average sold price compared to a property’s original list price. Yet this isn’t the case. May saw that number at 100%; largely in keeping with what it’s been for the last 18 months.

A total of 38 duplexes, triplexes and fourplexes sold in the city of Minneapolis in May at a record-setting average sales price of $474,392. The high seller was the Prospect Park – East River Road contemporary 7 bedroom, 4 bath duplex, which closed for $1.1 million. A gutted 4/2 house conversion in the Folwell neighborhood was the biggest equity-build opportunity, closing at $80,000.

Linden Hills was the leader in duplexes sold at 3. The Lynnhurst, Corcoran, Powderhorm Park, Prospect Park and Lowry Hill East added 2 each.

The month saw 84 new multifamily listings in Minneapolis. This represented a 44.8 percent increase over April. The Powderhorn Park lead the way with 5 new multifamily listings. Powderhorn Park, South Uptown, Whittier and Kingfield each added 4 to the total. The market had 128 Minneapolis duplexes, triplexes and fourplexes for sale in May. This was down from April’s 135 yet up around 20% over the first three months of the year.

Balanced markets are usually transitional, lasting no more than a month or two before shifting decidedly in favor or buyers or sellers. While it isn’t scientific, I suspect some of this may be determined by whether, as many expect, the Federal Reserve changes interest rates in September.