If you have been following the national headlines, you know the housing narrative has been a rollercoaster of interest rate speculation and inventory woes. However, real estate is ultimately local. Here in the Twin Cities, the October 2025 numbers paint a picture not of boom or bust, but of stability and resilience.
According to the latest data from Minneapolis Area REALTORS®, we are seeing a market that has found its footing. While the autumn chill usually cools buyer activity, the fundamental metrics suggest a market that is holding its value and offering opportunities for both sides of the table.
Here is a deep dive into what is actually happening in our local market right now.
Prices Are Growing, Not Spiking
For the past few years, the fear has been volatility. October offered the antidote: sustainable growth.
- Median Sales Price: Up 2.1% year-over-year to $389,900.
- Year-to-Date: Prices are up 3.0% overall for 2025.
The Takeaway: We are seeing “Goldilocks” appreciation. We aren’t seeing the runaway double-digit spikes that price buyers out, nor are we seeing depreciation. This 2-3% growth range is historically healthy, building wealth for homeowners while keeping the market predictable for entrants.
The Inventory Paradox
This is the most interesting dynamic in the current data.
- New Listings: Sellers are returning to the market, with new listings up 2.6% compared to last October. This suggests that the “lock-in effect”—where homeowners felt trapped by their low legacy mortgage rates—may finally be loosening as rates moderate.
- Total Inventory: Despite more new sellers, the total number of homes for sale actually fell 1.3% to 10,322 units.
What this means: Absorption is high. As fast as homes are hitting the market, they are being cleared out. The “Months Supply of Homes for Sale” dropped to 2.7 months. For context, a “balanced” market is usually considered 5 to 6 months of supply. We remain firmly in Seller’s Market territory, driven by scarcity rather than frenzy.
Buyers are Deliberate, Not Desperate
While supply is tight, the behavior of buyers has shifted.
- Days on Market: It is taking longer to sell—48 days on average, an increase of 6.7% from last year.
- Pending Sales: Contracts signed dipped 2.8%.
This indicates a “quality flight.” Buyers are active (Closed Sales were actually up slightly by 0.3%), but they aren’t snapping up just anything. They are taking the time to inspect, compare, and negotiate.
The Negotiation Gap
Are sellers getting their number? Mostly.
The Percent of Original List Price Received stands at 98.0%. This is a slight improvement (+0.2%) over last year.
The Strategy: If you are a seller, pricing correctly matters more than ever. You can expect to get close to your asking price, but the days of expecting massive over-asking bids on every property are largely behind us. If you are a buyer, that 2% gap represents your window of opportunity to negotiate repairs or concessions.
The Macro Tailwind: Affordability
Perhaps the most encouraging statistic in the report is the Housing Affordability Index, which ticked up 0.8% to 120. A higher number means greater affordability.
With mortgage rates stabilizing and softening recently (as noted in the national NAR data), the purchasing power of Twin Cities buyers is improving. This likely explains why closed sales managed to stay positive despite the seasonal headwinds.
Summary: What Should You Do?
For Sellers: The inventory shortage is your greatest asset right now. With only 2.7 months of supply, you have leverage, provided your home is prepped and priced in line with the steady 2% appreciation trend.
For Buyers: The frenzy has faded. You have an average of 48 days to make a decision rather than 48 minutes. Use this time to find the right fit. While prices are higher, the market is less chaotic, and affordability is moving in the right direction.
For Developers & Private Lenders (CCM’s core businesses): The data strongly validates the thesis for new construction. With existing resale inventory shrinking and supply stuck at a low 2.7 months, the market is structurally undersupplied. However, the increase in Days on Market signals that builders must account for slightly longer sales cycles and carry costs in their pro-formas. Success in this cycle comes from filling the supply gap with high-quality product, as today’s selective buyers are prioritizing condition over “as-is” potential.
The Twin Cities market demonstrates structural stability. October’s metrics confirm a rational environment driven by fundamentals rather than speculation.
Data Source: Minneapolis Area REALTORS® | October 2025 Monthly Indicators
