Why Some Minneapolis Sellers Are Losing Money (It's Not a Crash)

Everybody keeps telling me the Minneapolis housing market is crashing. It’s not. In a crash, prices come down. Prices here have kept climbing, just not fast enough to dig some sellers out. That’s why so many offers are getting rejected right now.

First, the market isn’t falling apart

When I made the video above in September 2026, the Twin Cities metro median price had just hit $410,000, a record high, with Minneapolis itself in the mid to high $300,000s. Nobody is giving houses away.

What has changed is speed. Homes were taking about 42 days to sell, almost 8% longer than a year earlier. There are price cuts everywhere you look, and buyers are picky. A picky market rewards the seller who can be flexible, and a lot of sellers can’t bend. (For the latest numbers, see our Twin Cities market page.)

The buyer who kept getting turned down

I was helping a buyer in the Lakeville area. Pre-approved, ready to move, not lowballing. We’d find a house that had clearly been sitting for 60 or 90 days or more, with two or three price cuts already, and a listing agent calling us twice a week asking for feedback. We’d write a fair offer. Rejected, or no answer at all. Then the next house. Same thing, three or four times.

Here’s what I’ve learned in this business: when a smart person acts unreasonable, there’s usually a reason. We were asking, “What is this home worth?” The better question was, “What does this seller need to be able to sell?”

So I went digging: what they paid, roughly what they still owe, and what it costs them to sell. One listing after another, I found the same thing. A lot of these homes were bought in the same short stretch of years: 2020 to 2022.

The pandemic buyers

If you bought or sold in 2020 to 2022, you remember. Homes listed Thursday morning, showings that afternoon, offers stacked up before the weekend. You had hours, sometimes minutes, to decide. Waive the inspection or lose the house. Offer over asking or don’t bother. Prices in the Twin Cities ran hard.

Good, smart people bought near the top. Values have crept up since, but slow growth hasn’t caught up to a high purchase price.

Why they can’t “just drop the price”

Selling a house costs real money: agent fees, closing costs, repairs the inspector finds, paint, carpet and cleaning so it shows well. For most sellers I work with, that’s 8 to 10% of the sale price, more if the house needs work. On a home in the $400,000s, that’s $30,000 to $40,000 before the seller sees a dime.

So do the math together:

1. They bought near the peak. The home is worth about what they paid, maybe a little more.
2. Selling costs come off the top. The gain is mostly gone. They’re even, or a little under.
3. Now a buyer asks for $20,000 off. Where does that $20,000 come from? Sometimes it’s a check the seller writes at closing.

They’re not being stubborn. They’re trying to avoid paying to sell their own home. Want to see your own number? Try our seller net proceeds calculator.

The mortgage rate piece

There’s a second reason, and it has nothing to do with the price paid. Lots of owners refinanced when rates were under 3%. Giving that up for today’s rates means a much bigger payment. Research from the Federal Housing Finance Agency found that each percentage point a homeowner’s rate is below the market rate makes them about 18% less likely to sell.

But here’s the twist. Some of the sellers we kept running into bought later, around spring 2022 or after, when rates had already climbed into the 6s and 7s. They don’t have a cheap rate to protect; today’s rate would be fine with them. The price they paid is what’s holding them back. That’s the toughest seller in Minneapolis: motivated, and stuck at the same time.

The kitchen-table conversation

I recently met with a couple in Burnsville who had simply outgrown their home. We did what we always do: pulled comps, looked at what’s pending and what’s still sitting. Then I ran their net sheet (what they paid, what they owe, the costs of selling, and what the home will bring today) and turned the paper around.

It wasn’t a fun conversation. They did exactly what the market told them to when they bought: stretched a little, offered over asking, because that was the only way to win. Now they’re on the other side, wishing buyers would do the same. But that was the market years ago. Buyers today have time and options. I’ll tell sellers that, because I’m not going to lie to them.

This is a market hangover

Minneapolis isn’t crashing. It’s a market hangover. A seller who looks unreasonable is often just doing the math.

If you’re buying: find out what the seller needs, not just what the house is worth. The right agent can read the purchase history and shape an offer the seller can actually say yes to.

If you’re buying now and will sell someday, do these three things:

1. Know your exit plan before you buy. What would you need to sell for in a few years to walk away clean?
2. Build in wiggle room. Selling takes a bite. If your numbers only work when everything goes perfectly, rethink the plan.
3. Never let a clock make your decision. Every stuck seller today was a rushed buyer once.

Thinking about selling and want an honest net number? See what your home is worth or talk with our team. Buying? Search homes on the map.