The housing bust made one thing clear: Communities where foreclosure rates were highest suffered the biggest decline in prices and are farthest from rebound. That was particularly true in Jordan and several north Minneapolis and east St. Paul neighborhoods, where prices are still 40 to 70 percent below peak. These areas were largely populated by first-time home buyers of humble means who became victims of predatory lending during the run-up in home prices. When the recession hit and the housing market crashed, many lost their jobs and fell behind. Some had adjustable-rate mortgages that eventually made their houses unaffordable, causing them to go into foreclosure after being unable to sell their houses for what they paid. Last year, more than 40 percent of all sales in several north Minneapolis neighborhoods were foreclosures or short sales, compared with 26 percent metrowide.
Because prices have fallen so much in the Jordan community, it often attracts first-time buyers like Amy Anderson, who was recently able to buy a fully renovated former foreclosure. She couldn’t qualify for a large enough mortgage to afford most other neighborhoods.