Townhomes are a hot commodity in the Twin Cities
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Townhome sales are picking up in the Twin Cities.
Driving the news: This spring, the properties gobbled up their biggest market share in more than 15 years, according to Minneapolis Area Realtors.
- And the trend doesn’t seem to be letting up: Townhomes were the only segment with sales growth in June, David Arbit, the group's director of research, tells Axios.
Why it matters: Townhomes' growing popularity comes as younger buyers look for more affordable homes and baby boomers want to downsize to a maintenance-free lifestyle, local real estate experts say.
- The median sales price for a metro-area townhouse was about $104,500 less than a single-family home here, June data provided by Minneapolis Area Realtors shows.
The big picture: Across the U.S., condo and townhouse prices are now climbing at a faster clip than single-family homes, Realtor.com analyst Hannah Jones tells Axios.
Zoom in: Signed purchase agreements for single-family homes were down nearly 14% in June from a year earlier, while those for townhomes inched up 0.5%, per the Minneapolis Area Realtors data.
- Context: Townhomes typically offer more space than a high-rise condo plus snow removal and lawn care services.
State of play: With fewer homes for sale, condos and townhomes can draw multiple offers if the homeowners association fee is low, local real estate broker Denise Mazone tells Axios.
- Properties with higher monthly dues — they range from $250 to about $1,000, on top of a mortgage payment — aren't moving as fast.
Reality check: Some first-time buyers are holding out for the white picket fence.
- "We want a small house and a tiny yard, but we do want our own walls … so we continue saving," says reader Britt B., who told Axios she and her husband have been ready to leave their one-bedroom apartment for about a year.
By the numbers: Twin Cities condo price growth has outpaced single-family homes in recent months, per the latest Zillow data.
- In May, the typical metro-area condo sold for about $200,300, up 4% compared to last year. Meanwhile, the typical single-family home here cost roughly $362,800, down 2.2% year-over-year.
Between the lines: The post-pandemic housing shortage is keeping prices high nationwide. Twin Cities builders have slowed from their peak pace but are still building more homes than in the U.S. overall.
The intrigue: That new local building activity is being dominated by apartments.
- Very few developers have built condos in the Twin Cities, even though demand is here.