Housing prices in Duluth hit new highs

DULUTH — The median price of a house in Duluth jumped to $260,000 in 2022, likely the highest ever, according to a city housing official.

Duluth recently released its annual housing indicator report, which offers a snapshot of its housing trends. The median price of a single-family house grew 8% in the past year, and 33% since 2019. Those houses in 2022 also spent fewer days on the market — an average of 26 days from listing to a pending status.

We're still dealing with pent-up demand for housing in Duluth," said Theresa Bajda, a senior housing developer for the city. "It's a math problem."

For several years the city has endured a housing crunch for both affordable and market rate homes, even as hundreds of new housing units become available.

The city saw fewer new homes come on the market in 2022, both single and multi-family, compared to 2021. Just 201 received occupancy certificates, compared to 456 the prior year. That year, the Bluestone complex opened nearly 200 apartments.

The availability of single-family houses less than $200,000 continues to be a problem, said Karen Pagel Guerndt, president of Lake Superior Area Realtors and owner of Real Estate Services of Duluth.

A recent $175,000 West Duluth listing drew 37 showings, she said. But the higher end of the market also is tight. A Park Point house she listed last week for $575,000 had a schedule of 20 showings. Most didn't happen because an offer was immediately accepted.

"A lot of buyers are extremely frustrated with this lack of inventory and this market," Pagel Guerndt said. "We've got a lot of good, qualified buyers who just flat-out can't find houses."

A 2019 study estimated the city needed 3,600 affordable homes between 2019 and 2024. This year and next, Bajda said, construction of 150 such homes financed with help from the state's low-income housing agency will be underway. Another 380 units being built with some city financial involvement are now under construction.

"We have to continue to make that our mission in Duluth," Bajda said. "To continue to construct, convert, preserve and rehab across all levels of affordability."

The survey, which gathers information from landlords, social services, area universities and real estate companies, shows the rental vacancy rate at 3.5%, up from 2% the year prior.

Bajda, however, said that at the time of the survey one larger rental company had many apartments empty for renovations, while another had empty units because of a water main break.

The average rent in Duluth was largely unchanged at $1,311 per month.

The number of unused housing vouchers in Duluth grew to 20% from 14.8%, likely indicating difficulty in finding rental properties to take those vouchers.

The survey shows that the homeless population in St. Louis County — most in Duluth — also grew based on the annual January point-in-time count, with 555 counted as either unsheltered, using emergency shelter or in a transitional home. In 2021, that number was 348. That year was low because people sleeping outside or in cars weren't counted because of the pandemic, said Courtney Cochran, with St. Louis County's housing and homeless department.

However, the initial count for this past January is 579, showing shelter space isn't growing to meet an expanding population, she said.

The city's overnight warming center is always full, Cochran said, and even "if we had two warming centers that size, they would be full every night."