Stillwater MN Housing Market: Costs & Trends for Early 2026

If you have been keeping an eye on the St. Croix Valley lately, you have probably noticed that the real estate landscape is shifting. As we settle into January 2026, the Stillwater market feels different than it did just twelve months ago. We are seeing a competitive seller's market that is slowly, finally, finding some balance.

For the past two years, high interest rates created a "lock-in effect" where homeowners simply refused to sell. Now, with rates stabilizing near 6.2%—and the initial shock of those rates wearing off—we are seeing that grip loosen. More inventory is coming online as sellers decide they can’t put their life plans on hold forever.

However, if you are thinking about moving to Stillwater MN, you might be confused by the numbers you see on Zillow or Redfin. There is currently a notable divergence between the average list price (often hovering over $600,000) and what the median home actually sells for (closer to $435,000). 

This gap usually comes down to the mix of property types—luxury acreage vs. historic downtown cottages—which we will break down below.

Let's get straight to the numbers. Understanding the difference between "Stillwater City" and the broader "Stillwater Area" (Zip Code 55082) is crucial for setting your budget.

When you look at the city limits, the median sale price is sitting right around $435,000. These are often older, charming homes on smaller city lots. However, once you expand your search to the full 55082 zip code, which includes the surrounding townships and sprawling new developments, the average list price jumps significantly, often exceeding $647,000.

Here is how the market metrics are shaking out right now:

If you are curious about where your specific property fits into these ranges, getting a precise home valuation Stillwater MN analysis is the best first step.

One of the unique things about this area is that the "market" behaves very differently depending on what kind of house you are buying. A historic Victorian downtown does not follow the same rules as a new build in the townships.

Properties near downtown Stillwater remain the most competitive segment. There is a finite supply of these "Birthplace of Minnesota" homes, and they command a premium. Restored Victorians can easily list for $695,000+. Because these homes offer the walkability and character that is impossible to replicate, they often see multiple offers even in a calmer market.

We are seeing significant activity in developments like the Hills of Spring Creek. Buyers are gravitating toward new construction because of the energy efficiency and modern layouts that older homes lack. Prices in this sector generally start around $450,000 and can quickly climb past $760,000 once you add finishes and landscaping.

Demand for St. Croix River views is steady. The trend here has shifted toward "Coastal Modern" designs and sustainability. Buyers in the $1M+ range are less sensitive to interest rates and are prioritizing lifestyle and privacy.

This is the toughest spot to be in. Inventory for homes under $400,000 is extremely tight. When a clean, well-maintained starter home hits the market, it tends to attract the fiercest competition because it is the most accessible price point for first-time buyers.

If you are looking for specific styles, checking for historic homes for sale Stillwater or browsing new construction Stillwater MN listings weekly is essential, as the good ones disappear quickly.

Why are prices remaining resilient despite higher borrowing costs? It comes down to lifestyle and infrastructure. Stillwater has successfully transitioned from a quiet river town to a robust suburb that people are specifically targeting when leaving the Twin Cities core.

School District 834 remains a massive draw. Households prioritizing education consistently seek out this district, which keeps property values in the area remarkably stable even when the national market wobbles.

Beyond schools, the local infrastructure is growing to meet the population, which is projected to reach roughly 20,100 by 2029. The expansion at Lakeview Hospital is a key economic driver, bringing more healthcare professionals and investors into the local rental and sales market.

Combine that with the sheer charm of the area—the lift bridge, the river access, and the walkable Main Street—and you have a very sticky market. People who move here tend to stay, and the commute to St. Paul or Minneapolis is manageable enough to attract "move-up" buyers who still work in the metro.

So, where do we go from here for the rest of 2026?

We are forecasting modest, sustainable price growth in the 2% to 4% range. We are unlikely to see the double-digit spikes of the pandemic era, which is actually healthy. It means the market is normalizing.

Inventory should continue to loosen up. As mortgage rates stabilize in the low 6% range, the "golden handcuffs" of the 3% mortgage are starting to rust. Homeowners who have been wanting to downsize or upsize are finally accepting the new normal (rates between 5.9% and 6.5%) and listing their homes.

The balance of power will likely remain with sellers, but the intensity will decrease. Buyers will have a little more breathing room to do due diligence rather than being forced into "panic buying."

For those following the numbers closely, our market watch newsletter is a great way to stay ahead of these monthly shifts.

Whether you are signing the deed or handing over the keys, here is how to handle the 2026 market.

For Sellers: Pricing is absolutely critical right now. In 2021, you could overprice a home and the market would catch up to you. In 2026, overpricing leads to stagnation. If your home sits on the market for more than 30 days, buyers start to wonder "what's wrong with it?" Focus on curb appeal and make sure your home competes visually with the new construction popping up nearby.

For Buyers: Be prepared to move fast on "turnkey" homes—the ones that need zero work are the ones getting full-price offers. However, if you want a deal, look for the homes that have been sitting for 60+ days because they have outdated wallpaper or older carpet. That is where your negotiation power lies. Also, don't wait for rates to drop back to 3%—that may never happen. The old saying applies: "Marry the house, date the rate."

If you are just starting out, reading a local first time home buyer guide can help you navigate the nuances of earnest money and inspections in Minnesota.

As of early 2026, Stillwater is a seller's market, though it is becoming more balanced. With a Market Action Index hovering around 43-48, sellers still have a slight advantage, but buyers are seeing more inventory and less intense bidding wars than in previous years.

The answer depends on where you look. The median sold price within the city limits is approximately $435,000, while the average list price for the broader 55082 zip code (which includes luxury builds and acreage) is significantly higher, often averaging over $647,000.

We do not anticipate a drop in home prices. Instead, forecasts predict modest appreciation between 1.2% and 2.9%. The demand for the St. Croix Valley lifestyle, combined with limited inventory, supports steady property values rather than a decline.

Homes are selling relatively quickly, typically going pending in 19 to 35 days. However, properties that are overpriced or need significant repairs may sit on the market closer to 45 days.