The Twin Cities of Minneapolis and St. Paul are often what first comes to mind when we think about locations in Minnesota. But slightly smaller is the city of Bloomington, where residents enjoy a very high standard of life, among beautiful surroundings, in homes that are considerably more affordable than what can be found in St.Paul and Minneapolis.
Here, we’ll explore Bloomington, MN’s housing market and look at the trends that are shaping the city. It may be that Bloomington sounds like the exact place where you’ll want to buy your new home.
Bloomington, Minneapolis: at a glance
- The city’s population stands at about 85,000.
- Bloomington spans nearly 35 square miles and is only 10 miles from downtown Minneapolis. This suburban community sits on the north bank of the Minnesota River.
- Bloomington, MN, draws millions of visitors each year, and this shopping and recreational mecca has well over 40 hotels within the city limits.
- The Mall of America in Bloomington has over 500 stores, 50 restaurants, and attractions that rival a theme park. In addition to Mall of America, Bloomington is the home of Water Park of America and the Science Museum of Minnesota.
Buying Bloomington, MN real estate
Homes in Minnesota are in high demand. In a study that took into consideration factors such as health care, infrastructure, environment, and the economy, Minnesota came 5th overall in the best states to live in the US. This would lead many to believe that you would have to pay exorbitant prices for property in the Bloomington, MN real estate market. However, the market is varied and across the different types of homes and different price points, represents great value.
Home Prices and Real Estate Market Trends
Since the beginning of 2023, there has been an upward trend in house prices and by July 2023, the median sold house price in Bloomington, MN, stood at $375K. Although there was a dip in house prices from mid-2022 to the end of 2022, when interest rates were raised by lenders, the market has been very resilient and shows signs of recovering strongly.
Over a longer period, we see strong appreciation in the market. If you had bought a home in August 2020, it would be likely you would have paid in the region of $307K. This means that in under 3 years, the equity you would have built would be close to 70K.
Bloomington is very much a sellers market and homes on average spend only 25 days on the market before being sold. Homes generally sell for about 2.2% higher than their listed price which is an indication that many homes get multiple offers.
Indicators suggest that for the remainder of 2023 and well into 2024, demand in the Bloomington, MN, housing market will remain high.
If you’re considering buying a house in MN either as a home or as an investment, keep these factors in mind.
- Strong Rental Potential: Bloomington has a robust rental property market with high occupancy rates and steady rent growth. The city has many renters, particularly young professionals, families, and students. The strong job market also ensures a constant demand for rental properties. Employment is up in Bloomington, with the City having more jobs per capita than Minneapolis or Saint Paul. Several companies, including Donaldson, HealthPartners, and Well Fargo, are significant employers in the area. Also, one of the City’s most important contributors to employment is the Mall of America, with over 13,000 employees.
- Growing Population: Population growth has been steadily increasing over the past decade. Bloomington, MN’s continued population growth is two-fold, driven by migration and natural growth. A growing population supports steady housing demand.
- Affordable Real Estate Pricing: Bloomington remains reasonably affordable compared to other major cities in the United States. While there are cities in Minnesota that have home prices averaging over $1 million, Bloomington has both luxury homes as well as a wide range of fantastic properties under $1M.
- Excellent schooling system: Bloomington schools are highly rated and many are Blue Ribbon Schools of Excellence.
- Beautiful natural surroundings and recreational opportunities: A third of Bloomington’s total land area is reserved for park purposes, including two large natural regions: Minnesota Valley Wildlife Refuge and the Hyland Lake Park Reserve. In addition to these two parks open areas, Bloomington City has an extensive city park system where residents and tourists can have picnics and engage in sports like baseball, football, and swimming.
- Take advantage of financial assistance programs: When buying a home in the Bloomington, MN, housing market, first-time homebuyers should explore programs the state and City offer. Benefits of enrolling in a first-time homebuyer program include lower interest loan rates and closing fee cost assistance. Ask your Realtor or agent about available programs.
Best time to buy a home in Bloomington, MN
It’s common knowledge that spring and summer are the peak seasons to buy a home. This is the time when it’s just generally more pleasant for buyers to go out and view homes that they have a serious interest in purchasing. Add to this the fact that this is when many homeowners are trying to relocate before the start of the new school year so that there is the least amount of disruption to their children’s schooling.
However, this is not to say that there are no good reasons to go home hunting during the fall or even in the winter months. Here are some of the advantages of buying during winter.
Most families in winter are focused on the holiday or the ongoing school year, and so will usually wait until spring to begin their search. This means there’s less competition and you’re less likely to get into an unwanted anxiety-ridden bidding war.
Possible Lower Prices
Sellers who place their homes for sale during the winter months do not expect the levels of interest they would have had if they had placed them during peak season. This may indicate that there is a need to sell the home quickly. In such a case, negotiations become more favorable for buyers, even in a sellers market. Remember that homes in the Bloomington, MN housing market sell on average at over 2.2% listing price, but in more favorable conditions, buyers might be able to get much closer to the asking price, or even lower.
Better Agent Representation
Almost every agent will say that they give every client 100% representation all of the time. However, it’s fair to say that when there are fewer clients, agents will be able to devote a greater amount of energy and time to those fewer clients. Add to this, there are generally fewer properties on the market during winter. This can result in a much more streamlined and quicker purchase time.
Bloomington, MN housing market property types
The top three considerations for most homebuyers are location, price, and design, though not necessarily in that order. It is no easy task to find a home that fits the bill between where the house is, how much it costs, and what it looks like.
A young professional or even a retiree may want to purchase a condo, drawn to the easily available amenities and the convenience of having an association look after maintenance and repairs. Single-family homes are the preferred option for many people raising families, giving them the space they require as well as a better sense of privacy. Those in the position to buy luxury homes in the most exclusive neighborhoods will love the options presented in Bloomington.
Single-family homes dominate the Bloomington market with over 55% of housing consisting of this type of home. At around $750,000, you can buy a single-family home with 4 bedrooms and 2 bathrooms covering roughly 3,500 square feet. It would possibly have a private bath in the primary bedroom, multiple home spaces for work and school, and be within a gated subdivision.
At the $1M mark, the homes begin to include a raft of features and amenities that mark them out as luxury homes. This may include sizeable amounts of land surrounding the property, superior finishing throughout the house, and standout features such as hardwood floors.
At $3 million and above homes begin to become more like estates. You’re likely to get considerable amounts of area coverage, possibly above 8,000 sq ft. Features may include walk-in closets, enhanced security systems, large pools with accompanying hot tubs, and elegantly designed outdoor living spaces.
Often priced at about $1 million, buyers can expect two bedrooms and three bathrooms, breathtaking panoramic views, and features such as kitchen islands, and superior security control.
Top Bloomington, MN neighborhoods
There are several communities and neighborhoods in Bloomington that are worth your consideration. Here, we cast an eye over some of the neighborhoods you may want to have a closer look at.
This affluent suburban neighborhood generally comprises medium to large-sized properties (often with four to five bedrooms), single-family homes, and townhouses. With an occupancy rate of 3.1%, the housing supply in West Bloomington is considerably tight.
This neighborhood comprises older, more established homes built between the 1940s and 1960s. Buyers will find medium to large-sized homes and apartment and condominium complexes. With 3.6% real estate vacancies, like in West Bloomington, MN, the demand for real estate in this area is also above average.
Residents in this community in East Bloomington are employed in executive, management, and professional occupations. Most housing options in this area include small to medium-sized apartment units in high-rise complexes as well as single-family homes.
North Corridor Park
Living in one of the more expensive areas in Bloomington, North Corridor Park residents are predominantly employed in executive, management, and professional positions. Single-family homes with at least three bedrooms dominate its real estate inventory. Apartments in the area are also available.
Home-buying guide to Bloomington, MN
Buying a home in Bloomington, MN, is similar to buying a home in other areas, but remember that Bloomington is a sellers market. Here’s our quick 6-step guide with tips on buying a house in Bloomington, MN:
- Get the best professional help: Although this may sound self-serving, we cannot recommend strongly enough getting the best representation you can through the services of a Realtor or real estate agent. The benefits and advantages they bring to the table could transform a difficult venture that ends with a so-so finish into a wonderful adventure that ends with you landing your dream home.
Throughout the whole process, an agent can be a guide and facilitator, but they can also be an objective source of support.
- Prepare yourself financially: Start by calculating your home affordability, considering your income, debt, and how much you can put down as a down payment. Check your credit score to estimate what you’re likely to receive in terms of interest rates, and prepare documents like income tax returns to prove your steady employment history.
- Get preapproved: Save time and effort by getting mortgage pre-approval. This shows sellers you’re a serious buyer and lenders are willing to finance your purchase. During this time, explore the different types of home loans available, such as the USDA and FHA loans.
- Make an offer: Once you’ve narrowed down a few targets or even set your sights on one home, it’s time to make an offer. This is where an experienced real estate agent can make a big difference. Realtors and agents can help you craft a winning bid as well as negotiate vigorously and skillfully on your behalf.
- Schedule a home inspection and appraisal: This stage will bring to the surface any issues and defects present in the property. Hire a professional home inspector to inspect the property and make a report so you know the structural and mechanical problems of the home, if any.
- Close the sale: Once all the paperwork goes through and any agreements made on repairs and contingencies are met, do a final walk-around and pay the closing costs.
Partner with a top Minnesota Realtor
Get a Minnesota native with experience to help you navigate the Bloomington, MN housing market. As industry experts with an intimate knowledge of Bloomington, Minneapolis, St. Paul, and nearby areas, we work with clients to help them achieve their real estate goals.
Scott Haubrich is a boutique real estate agency with the knowledge, experience, and resources to provide solutions, whether you’re looking to buy, sell, rent, or lease property in the area.