If you’ve been watching the Twin Cities housing market and thinking, “Wait… why does it feel like nothing affordable exists anymore?” — you’re not imagining it.
When you break down sales by price range, something jumps out fast:
- Homes under $200,000? Almost gone.
- Homes under $300,000? Still shrinking.
- Even under $400,000? Trending down compared to the last few years.
But then, once you hit $400,000+, the trend flips.
You start seeing a ramp-up in activity—and at first glance, it doesn’t make sense. If overall sales are down, why would the higher-priced segment look stronger?
That was the “hiccup” that made me stop and dig in.
The Key Answer: New Construction Is Driving the $400K+ Market
Here’s the truth:
New construction is propping up (and boosting) the $400K+ category, and it’s happening for one main reason:
Builders can offer deals that resale sellers can’t.
When you toggle between:
- Previously owned homes
- New construction
- All construction types
…it becomes clear that the higher-end activity isn’t just “people buying expensive homes.” It’s buyers responding to builder incentives.
Why Builders Can Compete Better Than Resale Sellers Right Now
A homeowner selling a resale house can do small things:
- price reduction
- minor repairs
- maybe a closing cost credit
But builders are playing a different game.
Builders are offering:
- money off (sometimes structured as “incentives” instead of price cuts)
- no closing costs
- below-market financing or rate buydowns
And that’s a big deal in a higher-rate world—because monthly payment matters more than the sticker price.
Why Builders Keep the Price High (Even While “Discounting”)
This part is important and most buyers miss it:
Builders often protect the sales price — and discount everything else.
Why?
Because if a builder starts slashing base prices publicly, they create a problem:
- Recent buyers get angry (they paid more yesterday for the same model)
- Appraisals get hit in the neighborhood
- Future phases become harder to sell
So instead, many builders keep the “official price” looking strong…
…and then quietly make it cheaper through incentives and financing.
That strategy helps them sell homes without visibly collapsing comps.
Construction Quality: Is New Construction Worse?
A lot of people ask this, especially those who remember the last major crash.
From firsthand experience going through the post-2008 era:
- After 2008, there was a stretch where build quality dropped (roughly into the early 2010s)
- After that, standards improved again
And specifically with Major Builders — the build quality is described as strong:
- spray foam at rim joists
- engineered/micro-style beams in basements
- efficient layouts
So while “new construction quality” depends on builder and era, not all builders are equal—and not all new builds are cheap.
The Real Tradeoff Nobody Talks About: Slab-on-Grade vs Basement
Now let’s get practical. A major trend showing up in certain new construction communities is slab-on-grade (no basement).
That comes with pros and cons.
Pros:
- can feel comfortable if properly insulated
- simpler build design
- potentially lower maintenance
Cons:
- storage becomes a problem (real fast)
- may be harder to resell later if buyers compare to homes with basements
- in Minnesota, basements are still a big value feature for many buyers
And here’s a key update from walking through one:
modern slab-on-grade can be insulated well—it may not feel cold like older slab homes or some townhomes.
So the “cold floor” issue isn’t always the dealbreaker people assume.
But storage and resale perception still matter.
A Quiet Buyer Trend: Single-Level Homes Are Selling Less
Another interesting shift:
Builders are noting they don’t sell as many single-level / non-two-story homes anymore.
One possible explanation mentioned:
- Many boomers already made their “final move” before or during the COVID housing surge
- Now they’re either staying put or moving into 55+ communities
- Result: two-story demand is holding stronger than expected
That’s a big deal because it influences what builders keep producing—and what buyers will have to choose from.
Pools, Associations, and the Monthly Payment Reality
This is where buying gets personal.
Some neighborhoods have pools and amenities—but the association fees can be:
- $400–$500/month in some cases
So the question becomes:
Would you rather pay $400–$500/month forever… or finance a pool in your own backyard?
Because yes—pool companies can finance pools too.
So the real comparison isn’t just “pool vs no pool.” It’s:
- lifestyle
- rules (associations)
- total monthly cost
- how long you plan to stay
- resale impact
How Do You Navigate This Market?
There isn’t one universal answer.
It comes down to what you value most:
- new vs resale
- monthly payment vs purchase price
- basement vs slab
- association lifestyle vs full freedom
- short-term home vs “10+ year” home
But the big takeaway from this market snapshot is simple:
✅ The $400K+ sales activity makes more sense when you realize new construction incentives are pulling buyers upward.
✅ Cheaper inventory is disappearing, not because demand vanished, but because supply at those price points is drying up.
✅ Builders are “discounting” without crushing comps by using incentives instead of visible price cuts.
Coming Next: A Deeper Slab-on-Grade Breakdown
The slab-on-grade walkthrough raised a lot of real-life questions:
- how it feels underfoot
- insulation differences
- storage solutions
- resale concerns
That deserves its own full breakdown—and it sounds like that’s exactly what’s coming next.
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