• Hyper-Local Comparables: Did you see recent sold homes in Hennepin, Dakota, Scott, Wright or Ramsey County that truly match your home’s condition?
• Real-Time Data: Were you shown pending sales in the Twin Cities? These are your most current indicators of what buyers are actually willing to pay right now.
• Absorption Rate: This is a critical factor in 2026 real estate trends. It measures how quickly homes are selling in your specific neighborhood. Without knowing your area’s absorption rate, you’re just guessing at the value.

Market insider- Twin Cities real estate update December 2025

I don’t typically do updates, but I’ve had several people reach out to me asking for some. I’m going to give it a go here this month and if it’s something that you enjoy and want me to continue, your feedback will be very helpful.

There are several different changes that I’ve seen in the market over the last month that I think are worth highlighting-

• Buyers waving home inspections is down 6% from 33% this is a wonderful thing that’s happening as far as I’m concerned. I don’t care if I’m a listing agent or a buyer’s agent, I want to see every single transaction have a home inspection period I think that not only does it make everyone on both sides of the transaction feel comfortable that the house is what it is, it also cuts down on problems after the closing.
• Purchase agreements with contingent upon the sale of the buyer’s property is up to 22% from 8% in a very short period of time. That means as the market time for homes listed for sale increase, the buyers need to have that loophole to get out should their home not sell.
• Cash purchases are down to 17% from 25% in previous months. This is great news for first time home buyers especially that have a smaller down payments period now they don’t have to compete with as many cash offers.
• Buyers are not asking for as many home warranties to be paid for by the seller it’s down to 3% from 4%.
• This is the one that surprised me the most. Buyers are coming in and asking for seller paid closing costs which has jumped from 25% of the transaction to 39%. That is a huge jump and something that the sellers need to be aware of. You may have to factor in this extra cost when selling your home in this particular market.
• Barely any appraisal gap coverage terminology in these purchase agreements. This is another great step forward for balancing out the real estate market. This has been a problem for quite some time because there are some home buyers that don’t have the ability to add this clause to a purchase agreement.
• Average days on market went from 19 to 37 although I would think it’s actually closer to 75. It really depends on the price point and the location to determine that.
• Average purchase to list price is hanging at 97% meaning that the majority of the homes that are selling are selling for 97% of the listed value. This also helps you navigate what your bottom line will be as you’re thinking about selling your home.
• Reported multiple offers have dropped from 13% to 11%. This stands to reason considering that we have longer market times period we’re still seeing multiple offers in certain properties in certain areas and price points. But the vast majority of the homes that are listed in all areas and price ranges are not selling multiple offers. Again giving buyers a chance to reflect and think about the home they’re going to purchase.

All of this is very interesting and good news for everybody involved although I’m sure some people won’t necessarily see it that way. I just feel that it’s important to keep all of my clients and followers updated on all this information. Let’s face it if you own a home, it’s probably the largest investment you will ever make in your lifetime. It’s important that you stay on top of the changes and are aware of how this can impact your home.

The offset- Waiting to buy a home

There’s always a lot of misinformation in real estate. I don’t necessarily feel that it’s malice or intentional. I just feel that many times when I read these articles in the newspaper the person writing doesn’t really have a perspective of what residential real estate is let alone what’s going on currently in the market.

As I write in this article several different web-based mortgage calculators are currently using 6.214% interest rate for a 30-year fixed mortgage. This is the rub right now because everybody fears rates. Understandably so because it’s one of those things where common-sense dictates that the lower the interest rate, the lower the house payment.

As we work through the remainder of 2025 into 2026, interest rates should continue to drop as the Fed continues to cut their rate making the dollar more appealing. When the dollar becomes more appealing, more countries invest in our US bonds which is what drives the interest rates for home loans.

In the meantime, there’s one other thing I would like to point out that a lot of people seem to be overlooking. I’ve included a chart with this article to give you reference. Essentially what I’d like you to consider is this- if you purchased a home today at $400,000 with a 6 1/2% interest rate which is what it’s been up until as of recent. You’re putting down 3% your payment would be roughly 2931 dollars. If you wait for the rate to drop to 5.75%. Hoping that that happens in early 2026 or sometime during the year, with average appreciation that $400,000 house could very well go back on the market $428,000 in the spring market.

If that happens with a lower interest rate, putting the same amount of money down but with the higher sale price. You end up having the same payment roughly of 2931 dollars. Lesson to this story is rather than just pay attention to what I have to say or anybody in the newspaper or media, take a look do it for yourself and find out what the facts are. You might be in a better position right now to purchase than you will be if we end up with multiple offers.

This is not a scare tactic and it’s certainly nothing that I can prove. But I’ve been a licensed real estate agent for over 23 years, and I’ve seen all different types of markets. It only stands to reason from a commonsense standpoint that interest rates drop which is what a lot of home buyers are waiting for. They will all jump back into the market at the same time. With a limited number of properties even though we have more for sale right now than we did three years ago, it’s very conceivable that the good ones will end up in a bidding war period so it’s very possible you could pay anywhere from $5000 all the way up to $50,000 over the list price depending on how it was priced to start with, location and how many buyers you have in that area looking for the same type of home.

All I’m saying is here’s some information for you to read and consider. That’s it, the more you know the better options you have which will lead you to better decisions. There are varying factors and degrees to all of this. Give me a call today and let’s have a conversation. I can connect you with a loan officer that I trust to answer your questions.

How do I price my home correctly for sale (in a market like this)?

That seems to be the $1,000,000 question. Let me backtrack by telling you a few things that you may want to know ahead of time before we dive into this. Right now, in October of 2025, it seems to be a case of the haves and the have nots. The homes that are selling quickly are for the most part under $350,000- and single-family homes.

For the most part townhomes and condominiums are sitting unless it is a town home that is all living on one level. That is indicative I believe of the current market with the interest rates. Being at 6.25% on average for a 30-year fixed rate right now. Once you jump over $700,000 and then the houses are selling quickly again because a lot of people in that price range are not affected by the current interest rates.

Taking all this into account Those are important, but you also have to look at what’s currently active, what is pending to see if the listing price is less than the sold price over the last 180 days. It’s a combination of all of this that will help you determine where you start with a listing price on your home.

Absorption rate plays a key role in this right now. You have to consider that along with what has sold. That will help you get to the right list price. The other thing to consider is a lot of new construction right now In many cases is offering an amazing interest rate for 30-year fixed mortgage. They are hurting so badly for sales that they spent 10s of millions of dollars buying down these rates from lenders to get people into their homes.

 All of this is just scratching the surface period if you’re truly serious and want more information to understand the current market and what you should do if you’re going to list your home comma please reach out to me, I’ll be more than happy to answer your questions.

Do I need 20% down to buy a house?

The answer is no, it’s a myth. Many years ago the standard was 20% down but that’s changed over decades of different types of financing. You can buy a house now with as little as 3% down. The most common is a 3.5% FHA loan. But all of this comes down to what you qualify for based on your credit score, income and everything else that they look at.

The next question then is always well if I don’t have to put 20% down to buy a house why would I? Well, there are three really important factors to consider when you’re purchasing a home and how much you’re going to put down. If you’re in a multiple offer situation, the buyer who has more down always looks like a stronger buyer because they have more skin in the game. It can give you an advantage,

20% down you’re considered to have enough equity in your property that most lenders will not ask you or require you to pay PMI which is private mortgage insurance period it’s not a huge amount of money but it’ll save you anywhere between $50.00 to maybe $100 a month your house payment period some people may pay more depending again on your situation.

Lastly, a lot of lending institutions if you’re putting 20% down would give an appraisal waiver. What that essentially means is they will just look at the comparable sold homes and the activity in the area and give your purchase an appraisal value of the purchase price without having to go through the standard appraisal. The standard appraisal requires an appraiser to literally go into the property take photos, measurements and everything else. Then go back and do a full blown analysis of the property.

If you can skip that step, not only does it make it easier for you with your loan but the sellers like it because it’s less likely that there will be an appraisal issue moving forward. Sellers want you to have a home inspection and they want everything to be right. But if you can give them a little bit more confidence that your purchase agreement will go smoother than your competitors, it always puts you in a better position.

This is just a quick look inside the possibility of not having to put down 20% for the purchase of the home. There’s so much more that goes into it than what I shared with you today. Please reach out to me and I’ll be more than happy to have a conversation with you and answer any questions that you have.

How much house can I afford?

That’s the first question most home buyers will ask. And it’s probably the most important one. How do you know what you can buy until you know what you can afford?  You’d be surprised at how many people don’t ask that question up front and just start looking for homes on their own. There’s nothing wrong with looking at homes independently before you ever even contacted a loan officer. The trouble starts when they physically start to look at homes and decide they want to buy one before they’ve gone through the process.

Almost every home buyer I’ve ever worked with has been approved for more than they want to spend. There’s a big difference between what you want to spend and what the bank will loan you. The key is knowing where your comfort level is over and above everything else. What is a reasonable payment to make every month That is comfortable and doesn’t make you house poor.

The idea that you must put down 20% to purchase a home is simply not true there are different options out there with as little as 3 1/2% down. I’ll give you 3 quick scenarios with an average purchase price of $350,000. All of these are at the current rate today, 6.29%. This is just an average rate that I’ve taken off the Internet. It’s not locked in some will pay more and some will pay less depending on credit and other variables. There will also be a 3% closing costs that you will need to bring in addition to your down payment. I have other videos that explain how closing costs are broken down.

If you put down the following, this should give you a rough idea of payment including average price of taxes and insurance.

• 5% down or $17,500 your payment all in would be $2411 per month
• 10% down or $35,000 your payment all in would be $2303 per month
• 20% down or $70,000 your payment all in would be $2087 per month

As I had mentioned, everyone’s going to be different depending on how much you have for down payments, what your credit looks like and a lot of other pieces. But here’s a quick little scenario to give you an idea of what you’re looking at. Imagine if the interest rates come down how much better the payments will be. But I should caution you by saying that a half a percentage lower in rate doesn’t change the payment all that much. You really need to see the rates drop a full percentage point or more before you start to really see it difference.

The price is being offset a little bit by house prices coming down in some areas. There are a lot of great deals out there you need to know where to look for them.

How to win the home buyer war.

I know that’s probably a little bit of an overused title it seems like everything is a war period storage wars, concert ticket wars, housing wars, tow truck wars and on and on. But they didn’t know what else to call it simply because of the fact that this is how a lot of my clients at times feel.

As a home buyer they feel like they are literally at war. The question then becomes how do you avoid that feeling and how do you battle back to end up in the home that you want to purchase? Their actual several there are actually several different ways to accomplish this but it comes down to the home buyer individually. What are you looking for in a new home? And what are you willing to change, repair or alter to get to where you want to be?

Case in point, if you’re looking for a house right now that’s completely move in ready that requires no work at all that looks like something out of a magazine or restoration hardware, be prepared to fight for it. A lot of home buyers are looking for that specifically right now. If that’s the case for you, then we have to look at different ways to write a purchase agreement to make you stand out and make you more attractive than all of the other competition. It’s really not that hard to do but you have to be willing to try something that’s a little bit of the out of box thinking. This is a combination of answering questions from myself as well as your loan officer to put the right offer together for you.

If that’s not the case and you’re looking for an older home that maybe needs some updating but stuff you can handle whether it’s your first home or your 5th home, then the strategy is a little bit different you don’t have to worry as much about how you write the offer because you’re not competing with other people. A lot of wonderful homes right now between $400,000 and seven or $800,000 are sitting on the market for several months without any offers and barely any activity. The key is scooping these up before the interest rates drop.

The last bit of insight would be what can you do from an interest rate perspective? I would argue that it’s better to purchase a home right now with a higher interest rate and refinance for $5000 when the rates drop. . Then to wait for the rates to become very attractive and all of a sudden now you’re in a bidding war because a lot of buyers who are waiting for the same thing you are will jump into the market. All of this goes back to timing and motivation. Give me a call and let’s have a conversation. You’re under no obligation but I’ll be more than happy to share the strategies in more detail with you and tailor them to your specific needs.

• Neighborhood Appeal: Look for areas with strong employment (e.g., Minneapolis’s healthcare sector) or attractions (e.g., proximity to lakes). Desirable neighborhoods hold value better.
• Rental Market: Check rental inventory on platforms like Zillow. Low rental supply (e.g., <2% vacancy) signals high demand, ensuring your flip appeals to buyers or renters if it doesn’t sell quickly.
• Home Prices and Trends: Analyze recent sales via Redfin or a real estate agent’s comparative market analysis (CMA). In 2025, homes in up-and-coming areas like St. Paul’s Midway sell for $250–$300/sq. ft. after upgrades, offering profit potential.
• Pre-1978 Homes: Many Minneapolis homes predate 1978, posing lead paint risks (banned that year). Federal law requires lead disclosures, and remediation ($5,000–$20,000) can impact costs.

• Spend 1–2 months researching neighborhoods, visiting open houses, and talking to locals.
• Use WalkScore.com to evaluate amenities and Redfin for sales data.
• Consult a real estate agent like Tom Sommers in Minneapolis-St. Paul for a CMA and insights on emerging areas.

• Purchase and Down Payment: Expect 20–30% down for investment loans ($40,000–$60,000 on a $200,000 home). Rates are 7–8%, per 2025 MBA data.
• Holding Costs: While renovating (3–6 months), cover mortgage payments ($1,200–$1,800/month), property taxes ($3,000–$5,000/year), insurance ($1,000–$2,000/year), utilities ($200–$400/month), and maintenance.
• Renovation Costs: Budget $20–$50/sq. ft. for updates ($40,000–$100,000 for a 2,000-sq.-ft. home). Kitchens and bathrooms yield the highest ROI (80–90%, per 2025 Remodeling Magazine).
• Lead Remediation: For pre-1978 homes, lead paint stabilization ($2,000–$10,000) or removal ($10,000–$30,000) may be required, per EPA guidelines.
• Selling Costs: Include 5–6% agent commissions ($15,000–$18,000 on a $300,000 sale), closing costs (1–2%, or $3,000–$6,000), and transfer taxes.

• Create a detailed budget using the 70% Rule, factoring in all costs.
• Get contractor quotes ($50–$100/hour) for repairs, adding 10–20% for overruns.
• Work with a lender to pre-qualify for a hard money or investment loan, ensuring funds are ready.

• Set a 6–12 month timeline to find a property, avoiding pressure to buy prematurely.
• Monitor listings daily on MLS or platforms like Zillow, focusing on distressed but viable homes.
• Avoid foreclosures unless you have cash reserves and legal expertise to navigate risks.

• Define your ideal property (e.g., 1,500–2,000 sq. ft., built 1950–1970, $150,000–$200,000).
• Partner with an agent to set up MLS alerts for matching listings.
• Hire RRP-certified contractors for pre-1978 homes to avoid $47,000 EPA fines.

• Cosmetic Updates: Paint ($2,000–$5,000), flooring ($5,000–$10,000), fixtures ($1,000–$3,000).
• Major Systems: HVAC ($5,000–$15,000), roofing ($10,000–$20,000), plumbing ($5,000–$15,000).
• Lead Remediation: For pre-1978 homes, lead paint removal ($10,000–$30,000) or encapsulation ($2,000–$10,000) is often required.
• Permits and Inspections: $500–$2,000, plus lead inspections ($500–$1,500).
• Unexpected Repairs: Add 10–20% ($5,000–$20,000) for surprises like foundation cracks.

• Get 2–3 contractor quotes before buying to lock in repair costs.
• Conduct a pre-purchase inspection ($300–$600) and lead test ($500–$1,500) for pre-1978 homes.
• Secure title insurance ($1,000–$3,000) to protect against liens from past environmental issues.

• Build a Team: Partner with a real estate agent, lender, CPA, and lead-certified contractor. An agent like Tom Sommers can identify off-market deals in Minneapolis-St. Paul.
• Secure Financing: Hard money loans (10–12% rates, 2–5 points) suit flips but require quick repayment. Self-employed flippers can use bank statement loans, showing 24 months of deposits.
• Comply with Federal Laws: For pre-1978 homes, disclose lead hazards per the 1992 Lead-Based Paint Hazard Reduction Act. Buyers get 10 days to inspect, and violations incur $47,000 fines.
• Market Smartly: In 2025, professional photography ($200–$500) and virtual tours ($200–$500) attract online buyers. Highlight lead-safe upgrades or energy-efficient features to boost value by 5–8%, per Remodeling Magazine.
• Protect Finances: Maintain a 6–12 month emergency fund for self-employed flippers to cover delays or slow sales, costing $5,000–$10,000 in holding costs.

• Start researching neighborhoods and budgeting today, aiming for a 6–12 month timeline.
• Contact a real estate agent like Tom Sommers for market insights and deal alerts.
• Consult a lender and CPA to secure financing and optimize taxes, especially if self-employed.