Inquiries about ways to reduce summer cooling costs are often received in Minneapolis. While Minnesota is more famous for its winter cold, there are days in summer when high humidity and heat can last for several days, leading to significant electricity bills for homeowners. When I receive such inquiries, I explain the two options: downsizing or maintaining the current home.

First, let's look at electricity costs. According to the Energy Information Administration, the average retail electricity price in Minnesota is 12.35 cents per kilowatt-hour, which is the average for all consumers as of 2024. Residential rates may differ, but they are not particularly cheap, ranking around 20th in the nation. Single-family homes tend to have larger heating and cooling areas, resulting in higher summer cooling and winter heating costs compared to condos or townhomes.

So, how does the sale price change when downsizing? Data from the real estate data company RealtyTrac shows that the median sale price in Minneapolis over the past year is $345,782, while the median listing price as of July 2026 is $359,500. However, the median sale price for the same month is $282,000, which is significantly lower compared to $380,900 in August 2025. This suggests that the market is currently undergoing adjustments. Condos and townhomes are often priced lower, allowing for the possibility of using the difference as retirement funds when downsizing.

Property taxes are also a factor that distinguishes the two options. The average effective property tax rate in Minnesota is 1.02 percent, with an annual median property tax of $3,501. Hennepin County, where Minneapolis is located, has a higher rate of 1.17 percent, resulting in an annual tax of $4,626 based on a median home price of $396,100. Seniors aged 65 and older with a household income below $96,000 can apply for the Senior Citizens Property Tax Deferral Program. This program allows property taxes to be deferred in the form of a loan, with the amount tied to 3 percent of household income, while the state pays the remainder. Repayment occurs when the home is sold or the program is terminated, with interest not exceeding 5 percent. Applications are due by November 1 each year, and the home must have been owned and occupied for at least five years.

Insurance premiums are another item that varies between the two options. Minnesota experiences frequent insurance claims due to roof damage from heavy snowfall and ice in winter, as well as hail damage in summer, leading to steadily rising insurance premiums for single-family homes. Condos and townhomes often have master insurance policies for the building's exterior and roof provided by the HOA, making individual insurance costs relatively simpler. However, it's important to remember that these costs are included in the HOA fees.

I advised the inquirer about cooling costs to tour both a downtown condo and a suburban single-family home. With the same budget, the downtown condo, while smaller in size, significantly reduces heating and cooling costs and management burdens, whereas the suburban single-family home allows for enjoyment of a yard and extra space. Ultimately, there is no perfect answer, and the decision comes down to what priorities are set.

In summary, maintaining the current home means carrying the burden of property taxes and heating/cooling costs while preserving asset size. Moving to a condo or townhome allows for realizing sale profits and reducing monthly heating/cooling expenses, but introduces a new fixed cost in the form of HOA fees. Both paths have their pros and cons, so it's worth considering personal cash flow and health status when making a decision.

Property tax and deferral program conditions are adjusted annually, so be sure to check the latest criteria before applying. This article is not investment or legal advice, and consulting a professional before any actual contracts is recommended.