The September 2025 real estate numbers are in, and they paint a picture of a market that’s simultaneously hot and showing signs of a subtle shift. While sellers still hold a strong position, the data suggests buyers are gaining a little more breathing room. Let’s break down the key takeaways from September’s report.
A Surge in Activity Heats Up the Fall Market
For anyone who has been waiting for more homes to hit the market, September offered a glimmer of hope. New Listings were up 5.2% compared to last year, bringing 6,343 new properties to the Twin Cities market. This influx of inventory is a welcome sign for buyers who have been facing limited choices.
This new inventory was met with robust demand. Both Pending Sales and Closed Sales saw significant increases, rising 7.9% and 7.5% respectively. This indicates that as soon as homes become available, eager buyers are ready to make a move, keeping the market’s pace brisk and competitive.
Prices Climb, But Inventory Remains Tight
The strong buyer demand continues to support home values across the region. The Median Sales Price saw a healthy increase of 2.6%, landing at $390,000. This steady, sustainable appreciation is good news for homeowners’ equity.
However, the reason prices continue to climb is simple: there still aren’t enough homes to go around. Despite the increase in new listings, the total Inventory of Homes for Sale actually dipped by 1.0%. With a Months Supply of Homes for Sale at just 2.7 months (down 6.9% from last year), we remain firmly in a seller’s market. A balanced market typically has a 5- to 6-month supply, so competition among buyers remains a key feature of our current environment.
A Slower Pace and Squeezed Affordability
Despite the high demand and low inventory, homes are taking a bit longer to sell. The average Days on Market Until Sale rose by 12.8% to 44 days.
Why the slowdown? A likely factor is affordability. The Housing Affordability Index dropped by 4.0%. This index measures whether a typical family earns enough to qualify for a mortgage on a median-priced home. As prices rise, buyers’ purchasing power is stretched thin, forcing them to be more selective and take more time before making an offer. This suggests that while demand is high, buyers are becoming more sensitive to price and value.
What This Means for You
• For Sellers: The market is still very much in your favor. Prices are up, and there are plenty of buyers. However, the increase in Days on Market is a clear signal that strategic pricing is crucial. The days of expecting multiple offers regardless of price or condition are evolving. A well-presented and accurately priced home will still sell quickly.
• For Buyers: The increase in new listings is a positive development, giving you more options to explore. Be prepared for competition, but don’t feel pressured to rush into a decision. The slight increase in market time gives you a valuable window to conduct due diligence. Get your financing in order and be ready to act decisively when you find the right property.
• For Investors: The market fundamentals remain attractive. Rising home prices point to solid long-term appreciation potential. While the low inventory makes finding properties challenging, it also signals strong rental demand. The slight increase in Days on Market could provide a small window for negotiation on properties that aren’t priced perfectly, but be prepared to act quickly on well-priced assets. Focus on cash flow and long-term holds in this competitive environment.
In summary, the Twin Cities real estate market is dynamic and strong, but it’s not the frenzied market of years past. It’s maturing into a more balanced environment where both buyers and sellers can find opportunities.
