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People are not 'fleeing' Minneapolis, real estate data shows

While it's been a tumultuous year for the city, demand to live in it is still strong.
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The reports of Minneapolis' death have been greatly exaggerated, according to the latest real estate data.

A turbulent year for the city that has been hit hard by COVID-19 closures followed by the death of George Floyd, civil unrest, calls to dismantle Minneapolis PD, and a subsequent spike of crime has sparked claims that people are "fleeing" the city.

But that's not the case if property market stats are anything to go by.

The Minneapolis Area Association of Realtors this week released the results of its study into the Minneapolis property market to see if there was any truth to the claim that residents are packing their bags after a tumultuous few months.

Quite the contrary, with the study finding that Minneapolis' typically strong property market remains so despite the fallout from huge levels of unemployment related to the pandemic.

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While the effects of the civil unrest can be seen by a drop in showings and new listings in the week that followed George Floyd's death, the signs are that demand for property in the city remains as robust as ever, aided by a prolonged period of low interest rates.

The number of new listings in June was down 4.2% compared to last year, the same drop seen in Minnetonka, while suburbs including St. Louis Park and Golden Valley saw an increase in listings.

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What's more, such is the demand for housing in Minneapolis, the number of days a property spends on the market in the city dropped by 5.9% in June compared to last year, whereas St. Paul and suburbs including Minnetonka, Golden Valley, and St. Louis Park all saw houses stay on the market for longer.

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A check on social media in the past few weeks throws up plenty of anecdotal evidence that the property market is incredibly hot in Minneapolis right now, with properties particularly at the lower end of the market receiving multiple bidders.

A sign that people were leaving the city would be noticeable in the percentage of asking price houses are sold for, but the Minneapolis Area Association of Realtors finds there has been no change in the percentage of listing price in Minneapolis.

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"In summary, a closer examination of the data does not support claims that the City of Minneapolis is seeing a disproportionate increase in seller activity in Minneapolis in the weeks following the unrest," the association concluded.

"Recent market activity in the Minneapolis isn’t unique from other surrounding cities. Well-presented, turnkey properties in Minneapolis very often have multiple offers. Even if a disproportionately large share of homeowners were to list their homes, the insatiable demand is likely to absorb those extra listings, likely limiting any negative impacts on values.

"Moreover, there are a multitude of factors impacting market dynamics at any given time, including recent disruptions from COVID-19."

There are suggestions however of discontent in downtown Minneapolis, with a Minneapolis Downtown Council survey finding that "dozens" of businesses are considering a move out of the area, though none of these were named.

However, a recent crime spike and the uncertain future of the Minneapolis Police Department aren't alone among the reasons for the pressure, given that the pandemic continues to take a huge toll, with the survey finding "a lack of people working or socializing" downtown is among the complaints.

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