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Continued: Home values bounce back around metro

  • Article by: DAVID PETERSON , Star Tribune
  • Last update: April 26, 2014 - 10:49 PM

In Hennepin County, Assessor Jim Atchison said Minneapolis is seeing increases in its property tax base that easily rival any of those put up by nearby suburbs.

“Apartments countywide are up $1.6 billion, or 18 percent,” he said, “and about half of that, $800 million, is new construction, with $600 million in Minneapolis alone. And that’s just apartments, not condos.”

Jumps in the value of existing homes in Hennepin County range from 14 percent to 17 percent in older suburbs such as Hopkins, Brooklyn Center and Robbinsdale, to 20 percent or more in such Lake Minnetonka outposts as Excelsior and Tonka Beach.

The setting of basic values is the starting gun for a process that ends each year in the mailing of property tax bills. And that will vary some by jurisdiction.

Officials in Anoka County say their residential bounceback is so much stronger than the commercial sector’s that homeowners are liable to find themselves shouldering more of the cost of local government.

Not all good news

In Hennepin County, though, new commercial construction — notably in Minneapolis, Bloomington, Edina and St. Louis Park — could help keep a lid on home taxes.

“The headline to me is $2 billion in new construction,” Atchison said. “Even though commercial is up 3 percent and residential 9 percent,” he said, commercial is taxed much more heavily, “although it isn’t a third of the tax base.”

The darker side to the picture, reports online real estate tracker Zillow, is the large number of homeowners still underwater on their mortgages.

Overall the Twin Cities area is no worse than the nation (18.6 percent, a shade under the national average), but it contains some extremely high figures. Exurban Isanti County, for instance, stands at 34 percent of mortgages with negative equity, and Sherburne is at 27 percent, the same range as for some stressed city and suburban neighborhoods closer in.

Even so, officials say, it’s notable that home values are also rebounding in cities offering some of the lowest price homes.

In Dakota County, for instance, median home values jumped between 12 and 14 percent in modestly priced South St. Paul and the posh enclave of Sunfish Lake, where the average value rose by nearly $90,000.

“Things are hot in this metro for homes fairly close in, that are selling for less than $200,000,” Stillwater real estate agent Melissa Pugh said. “Young people these days with their student loans find it very hard to jump into houses costing a lot more than that.”

 

David Peterson • 952-746-3285

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  • One of biggest increases in Ramsey County home values came in St. Paul’s Payne-Phalen neighborhood, an area anchored by Payne Avenue but also long known for blight and decay. After years of steep drops and stagnation, property values are booming again. Ramsey County Assessor Stephen Baker called it the “most positive year for residential in eight or nine years.”

  • Peter Hansen, looking over a home for sale near Lake Phalen with a vast lawn, represents those drawn to the area and contributing to its dramatic increase in home values. “It feels like a real city, with some real history,” said Hansen, a former Duluth resident.

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