Property values in Ramsey County have hit a record high after years of crawling back from the recession. But while apartment complexes, industrial centers and storefronts are worth more than ever in St. Paul and surrounding suburbs, home values are still lagging behind, 10 years after the financial crisis.

The collective value of single-family homes in Ramsey County is about $916 million less than it was in 2007, while just about every other type of property has increased in value over that time, according to county property assessor data.

“That was a deep recession, a long recession, and you can see that now we are just basically catching up,” said Luis Rosario, Ramsey County assessor. “There is still some road to recovery.”

Part of the reason that home values have been slower to recover is that there is still a lack of “inventory” — not as many homes are being built or put on the market, Rosario said. Some homeowners remain underwater, owing more on their mortgages than the home is currently worth, and are waiting for the market to rebound enough to be able to sell without taking a loss. Others have downsized and prefer living in apartments closer to the city, he said.

As a result, more people than ever are renting in Ramsey County. The footprint and the value of apartments have nearly doubled since before the recession, surging from an assessed value of $3.7 billion in 2007 to $7.2 billion in 2018.

Apartments have popped up not just in St. Paul, but in affluent suburbs like Shoreview as well. Eighteen complexes in Ramsey County with more than 1,900 apartments and townhouses have opened or begun construction since 2017. Vacancy rates have been hovering around record lows for several years, and are still under 3 percent.

There has been pent-up demand for more apartments for years because construction essentially stopped in 2008 and didn’t really start up again until 2012, said Maureen Michalski, director of development for Schafer Richardson, a Minneapolis-based development firm. Schafer Richardson is building its first apartment complex in St. Paul, a 175-unit building with a courtyard just next to Xcel Energy Center.

“When we decided to build, we looked around and saw that there hadn’t been a lot of product put in the market the same way as maybe in Minneapolis,” she said. “The vacancy rate was very low. We found a spot that was close to the river, in downtown and close to West Seventh Street, which we think we can market to both ends of the spectrum — to the younger demographic and to empty-nesters.”

The St. Paul market is likely to stabilize when the vacancy rate is around 5 percent, Michalski said.

When the recovery started, nearly all of the new apartment complexes were going up within the city. But lately more have been spreading into the suburbs, said Corey Erickson, commercial supervisor at Ramsey County.

The value of apartments in Ramsey County suburbs has grown from $1.7 billion to $2.7 billion since 2014.

Part of that is due to the difficulty of buying a home, as well as the increasing popularity of apartments loaded with amenities, Erickson said.

“In the suburbs, you have about 25 years where there was no construction of apartment complexes at all,” he said. “So you’re seeing some of this catch-up with these amenity-rich and beautiful complexes that just hadn’t been occurring in the suburbs.”

While home values are still below their 2007 high, they have been steadily climbing since bottoming out in 2012. Rosario said he expects values to catch up to 2007 in another year.

Patti Jo Fitzpatrick, president-elect of the St. Paul Area Association of Realtors, said the housing market is likely to stabilize in the next 18 to 24 months.

Apartments and investment properties have been still selling so fast that they often don’t make it to market, but sell through word of mouth, Fitzpatrick said.

The competition for homes is enough to turn potential buyers off or persuade them to wait for the market to cool down, she said.

“I think what we’re seeing is not that necessarily people want to continue to rent, but if you’re a young family trying to buy a home and you’re beat out constantly on offers, then you’ll stay off the fence,” Fitzpatrick said.

“People don’t want to overpay,” she said. “If you get into a bidding war, it can feel like overpaying.”