North Minneapolis home values came roaring back in 2014, with North Side neighborhoods dominating the list of Minneapolis neighborhoods with double-digit percentage gains in median home values.
Eight of the area’s dozen neighborhoods recorded gains in median home values of more than $10,000 during the year, according to a Star Tribune analysis of city assessments on which next year’s property taxes will be based. The analysis focused on the 80 neighborhoods that had at least 100 single-family homes.
Although the North Side’s dollar gains don’t approach those in some of the city’s toniest neighborhoods, they are a sharp turnaround from the year before, when most of the same neighborhoods gained only a few thousand dollars in value. Some saw sharp increases in their rate of gain.
Far north’s Lind-Bohanon and McKinley during 2013 were the only city neighborhoods where home values hadn’t rebounded from their recession lows. But they recorded gains in 2014 in their medians of nearly 19 percent and 9.3 percent, respectively.
The Harrison neighborhood, lying between Bassett Creek and Olson Hwy., was particularly robust, recording a 14 percent gain in median value for the second straight year. Nonprofit developer PRG kept a list of 13 people mostly from Harrison who wanted to be notified when a house it built in the neighborhood was completed, and just accepted an offer.
“Harrison’s hot,” said Realtor Stephanie Gruver, citing its location. “People can bike to downtown. They can bike to Target Field. They can bike to Bryn Mawr.”
An expanding residential tax base can be important to the city’s property tax rate. Residential homes comprise almost two-thirds of the city’s property wealth. That’s slightly less than last year only because the values of apartment and commercial properties rose even faster.
Another year of residential property base growth similar to the past two years would bring the city near its peak home property value of $26.6 billion in 2007. The median single-family home value citywide that year was $213,000 before the recession battered that down to $170,000 for 2012 and 2013. The median has now recovered to $190,500.
But the city’s recovery has varied geographically. In the southwesternmost corner, all neighborhoods but Windom have now matched or exceeded their pre-recession median home values. Linden Hills now exceeds its 2007 peak by 18 percent, the highest in the city; neighboring Fulton follows at 15 percent higher.
One reason for the North Side’s strong gains now is that its prices tumbled the most. Even with a $7,000 gain last year, its first increase in 10 years, the median home value in McKinley stands at a city low of just $82,000. The neighborhood just west of Interstate 94 stands at less than 57 percent of its peak value. Harrison, the strongest North Side neighborhood by that measure, stands at only 76 percent of peak value. In contrast, the Northeast Park neighborhood just west of The Quarry shopping center is the weakest in northeast Minneapolis, but it is a more robust 79.6 percent of peak.
Time for optimism?
Gruver, though, expects the North Side to rise again, especially because of how much buyers get for their money. A three-bedroom, two-bathroom house that might sell for $200,000 on the South Side can be had for $130,000 up north, she said.
Even new construction can fetch buyer interest. PRG, which has built three houses and rehabbed six others in Harrison in the past five years, is finding properties harder to acquire, said Erin Wilson, who markets finished properties. The city has marked the strengthening of the North Side by putting dozens of lots on the Humboldt Greenway up for developer proposals after a seven-year hiatus.
Localized factors can compound the general patterns. The city-backed EcoVillage cluster of new or rehabbed homes in north Hawthorne is buoying that neighborhood’s 13.7 percent gain in median value, triple that of the year before. Gruver has sold two houses there, telling buyers, “Look, there’s the Ferris wheel at Betty Danger’s.”
Gruver said that proximity to hip northeast Minneapolis, across the Lowry Avenue Bridge, also is helping Hawthorne and that it should eventually bolster McKinley.
Barbara Johnson, the area’s City Council member, also credits the federally backed recession-era program that funded the acquisition and rehab of selected foreclosed homes, many on the North Side, along with a city down-payment-assistance program. But crime is still a factor in trailing neighborhoods such as Jordan and McKinley, Johnson said, citing their presence on police maps of hot spots.
Yet Gruver remains optimistic. “Part of this is just timing,” she said. “When all ships rise, all ships rise.”