SmartAsset.com recently released their list of “America's Healthiest Housing Markets,” and lo and behold, Duluth comes in third, right behind Moorhead, in Clay County (up north) and Detroit Lakes, in Becker County.
So what, in the site’s editors’ estimation constitutes a healthy real estate market? They considered four factors:
- Affordability – Home costs as a percent of income. This criterion is weighted the most heavily in their report (40 percent, as opposed to 20 percent each for the others).
- Risk of Loss – The percentage of homes sold short (at a loss).
- Stability – The number of years homeowners remain in their homes and the percentage of them who are underwater on their mortgages.
- Fluidity – The editors used the average days a home remains on the market before selling. The higher this number, the less fluid the market.
How Does Duluth Stack Up?
Duluth homeowners spend 21 percent of their income on home costs. The average in the state is 20.9 percent.
Where the city really shines is in the “homes sold at a loss” metric ― only 5.8 percent of Duluth homes were sold at a loss. Compare this to the state’s average of 22.3 percent and it’s easy to see how Duluth made the healthy real estate market list.
That doesn’t mean Duluth homeowners are out of the woods when it comes to the risk of having to short sell if they need to move; an average 18.8 percent of them owe more than the home is worth. This far exceeds the percentage for Minnesota overall, at 10.9 percent.
The average number of years a Duluth homeowner spends in the home is 15.8. While that’s not the best on the list, it isn’t the worst either. Eden Prairie takes the honors for that with homeowners selling after living in the home for 13.8 years. Folks in Cottage Grove tend to remain in their homes an average of 17.6 years.
Rounding out the list of the 10 healthiest real estate markets in Minnesota are: