Watertown is a very small city located in the state of Minnesota. With a population of 4,774 people and two associated neighborhoods, Watertown is the 168th largest community in Minnesota. There's nothing like the smell of a brand new house, and in Watertown, you'll find that a large proportion of houses were recently built. New growth in residential real estate is an indication that people are choosing to move to Watertown, and putting down their money on brand new construction. Watertown’s real estate is, on average, some of the newest in the nation. Watertown does seem to be experiencing an influx of affluent people, because the median household income is $93,008.00.

A relatively large number of people in Watertown telecommute to their jobs. Overall, about 19.07% of the workforce works from home. While this may seem like a small number, as a fraction of the total workforce it ranks among the highest in the country. These workers are often telecommuters who work in knowledge-based, white-collar professions. For example, Silicon Valley has large numbers of people who telecommute. Other at-home workers may be self-employed people who operate small businesses out of their homes.

The education level of Watertown citizens is a little higher than the average for US cities and towns: 22.16% of adults in Watertown have at least a bachelor's degree.

The per capita income in Watertown in 2022 was $41,419, which is upper middle income relative to Minnesota and the nation. This equates to an annual income of $165,676 for a family of four. However, Watertown contains both very wealthy and poor people as well.

The people who call Watertown home describe themselves as belonging to a variety of racial and ethnic groups. The greatest number of Watertown residents report their race to be White, followed by Asian. Important ancestries of people in Watertown include German, Norwegian, Swedish, Irish, and English.

The most common language spoken in Watertown is English. Other important languages spoken here include Polish and Greek.