Home values in Minneapolis have almost climbed to their pre-recession peak, but the recovery is far from uniform across the city.
Although roughly a third of city neighborhoods now exceed the peak median home values they notched before the recession, other neighborhoods still struggle far below that level, according to estimates by the Hennepin County assessor. While the median value of homes in Linden Hills in south Minneapolis is up 24 percent over 2007, houses in some North Side neighborhoods have recovered only 70 percent of their value.
The difference is stark for recent home buyers like Loren Purcell.
He started his search in south Minneapolis, but affordability and availability issues there prompted a wider look. After looking at 30-some houses, he bought a 1924 Craftsman bungalow on the North Side in October.
“This is by far the nicest house I looked at. … It was just well below budget and a fantastic quality house,” said Purcell, a graphic artist relocating from Oakland, Calif. “And it cost $30,000 less than the cheapest house we looked at on the South Side.”
That low price came because he bought in the Jordan neighborhood, where the median-value house remains at just 70.8 percent of the value recorded in 2007, the year the city’s values peaked. The recovery in next-door Hawthorne and Lind-Bohanon farther north has been even slower.
However, the North Side has recorded some of the city’s highest percentage gains in median value in the past two years. Eight of the 12 neighborhoods with largest percentage increase in 2015 were in north Minneapolis, and they rose faster than the city as a whole, even as the market cooled.
In dollars, the tony Kenwood neighborhood saw its median home value jump the most — up $112,000 from its low point in 2013. That increase alone is more than the $94,500 median assessed value of a house in Jordan. The difference is attractions like the lakes, Minnehaha Creek and Uptown, said Realtor Faye Bland.
“Not everyone can afford to live in those neighborhoods and get the kind of house they’re looking for,” she said.
It’s not just the North Side, but also South Side neighborhoods such as Howe and Corcoran where a buyer can get more for their money.
Purcell said he’s not worried about the crime or blight associated with the North Side.
“The neighborhood does have its share of problems, but it’s not that different from a lot of neighborhoods in south Minneapolis,” he said. “We’ve never had the feeling that we had to worry about ourselves or our house.”
He said his neighbors are friendly and invested in the area. It was reassuring to have Realtor Deb Wagner, who listed the house, living next door.
The strengthening real estate market also has given the city more data, making it easier to establish home values.
At its worst in 2009-2010, 45 percent of home sales were foreclosures by banks or owners dumping homes for less than the debt against them, which often excluded them from the type of sales the assessor’s office uses to set values. Now that figure is down to about 10 percent, according to Assessor Patrick Todd.
Realtor Stephanie Gruver, also a North Sider, thinks demand there would be bolstered if the area could grow more amenity-rich business corners such as 44th and Penn, which has restaurants and shops.
But one couple, Tom Kloos and Megan Gauer, found enough amenities to attract them to a house in the Willard-Hay neighborhood. They plan to close on it this month before their July wedding. The 1941 home is not far from Theodore Wirth Park.
“The parks were a big thing for us when we were considering a neighborhood,” Kloos said.
A teacher and social worker, they looked as far afield as St. Paul’s Frogtown neighborhood but began focusing north of Olson Highway.
“That’s where prices seemed to be within our price range,” Kloos said.