Location: Duluth, MN | Metro: Duluth, MN-WI MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,070 |
| 1 Bedroom | $1,230 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $2,130 |
| 4 Bedrooms | $2,570 |
| 5 Bedrooms | $2,981 |
| 6 Bedrooms | $3,339 |
| 7 Bedrooms | $3,606 |
| 8 Bedrooms | $3,786 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,230 | $207,936 | 0.59% | F |
| 2BR | $1,540 | $298,465 | 0.52% | F |
| 3BR | $2,130 | $359,890 | 0.59% | F |
| 4BR | $2,570 | $462,401 | 0.56% | F |
| 5BR | $2,981 | $601,058 | 0.5% | F |
U.S. Census Bureau data (2024)
The real estate market in ZIP 55811, Duluth, MN, presents a unique scenario for landlords and small-portfolio investors. With a median home value at $345,910, the market is relatively stable, yet only 0.2% of listings have seen reductions in price. This indicates that sellers are maintaining their asking prices, suggesting strong pricing power in the near term. The median days on market (DOM) stands at 6 days, which is exceptionally low. This quick turnover rate signals a robust demand environment where homes are selling swiftly, further reinforcing the sellers' ability to hold firm on their prices.
On the rental side, the Federal Market Rent (FMR) for ZIP 55811 in fiscal year 2024 is set at $1,450. In contrast, the actual market rent, measured by Zillow's Observed Rent Index (ZORI), is $1,924. This significant gap between the FMR and the ZORI suggests that the rental market is outperforming government estimates, likely due to higher demand or limited supply of affordable housing options. For landlords, this means the potential to charge above the subsidized rates, enhancing cash flow and profitability.
The combination of stable home values, minimal price reductions, and rapid sales cycles points to a market that will likely maintain its strength over the next 12 to 24 months. However, for long-hold investors, the appreciation thesis is less clear. While the current conditions support holding onto properties without fear of depreciation, the pace of value increase may be modest. The low DOM and high rental rates indicate a healthy market but do not necessarily suggest substantial growth in property values. Instead, the focus should be on steady income generation through rentals and leveraging the current demand to ensure consistent occupancy and rental rates.
In summary, ZIP 55811 offers a solid foundation for investment, with strong seller pricing power and favorable rental dynamics. Long-term investors can expect a reliable asset that generates income rather than significant capital appreciation. The setup implies a market that is ripe for those looking to capitalize on the rental income potential, given the disparity between the FMR and the actual market rents.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.