Growth in home values slows around the lakes

Median sales prices rise quickly in more affordable neighborhoods

A row of houses on Linden Hills Boulevard
A row of houses on Linden Hills Boulevard. Many homes near Lake Harriet have not increased in value since last year, according to the Minneapolis Assessor's Office. Photo by Nate Gotlieb

Home values slowed their steep incline this year around much of Lake Harriet, Lake of the Isles and Cedar Lake while growing sharply in more affordable parts of Southwest Minneapolis, according to data from the city’s Assessor’s Office.

Many homeowners near Cedar Lake, Lake of the Isles and the east side of Lake Harriet saw little change in their valuations, according to the Assessor’s Office. Meanwhile, many homeowners south of 54th Street, east of Lyndale Avenue and east of Bde Maka Ska saw increases. Some homeowners in Linden Hills and Fulton did, too, though those increases appeared to be more modest than in past years.

The median sales price either went down or else increased by less than 5% in 13 of Southwest’s 21 neighborhoods between 2017 and 2018, according to a report from the Minneapolis Area Association of Realtors. In four of Southwest’s most expensive neighborhoods — Kenwood, Lynnhurst, Linden Hills and Fulton — the median sales price increased no more than 2 percent. In some of Southwest’s more affordable neighborhoods, such as Whittier, Lyndale, CARAG and Kingfield, prices grew by upwards of 9 percent.

Lakes-area realtor Larry LaVercombe said the market has been great for sellers of entry-level homes but far tougher on sellers of upper-bracket homes for the past four years. He said there are a lot of more expensive homes available but a lack of families looking to transition into something significantly more costly.

“There’s kind of a vacuum in that price range between selling your first-time house and looking for something that’s not a million-plus,” he said. “It’s hard to make that big jump.”

LaVercombe said there’s a demand for larger, nicer houses in lakes-area neighborhoods like Linden Hills, noting that many weren’t originally built for luxury. Many of the older homes in the area don’t have two bathrooms upstairs, he noted, which is something he said many wealthier families want.

He said he doesn’t see as many people moving to the suburbs from the city compared with 15 years ago, noting the increasing value of a walkable neighborhood.

Realtor Judy Shields said she has a portfolio of buyers looking for houses in the $200,000 to $350,000 range, noting how quickly those houses go off the market.

Median Home Values in Minneapolis

Lower tax burden

Home values in Minneapolis as a whole rose at a higher rate in 2019 than they did in Southwest, according to the Assessor’s Office. Some areas, such as North Minneapolis, saw collective double-digit-percent increases in valuations.

The bigger increases in other parts of the city mean some Southwest homeowners could carry less of the property-tax burden in 2020, the year in which 2019 valuations are applied for tax purposes. Any actual changes in taxes will depend on what the city, Hennepin County, the School Board and other local governments decide to levy this year.

City Assessor Patrick Todd said the assessed values are driven by what people are paying on the open market and that areas with the biggest increases in valuations are where home prices increased the most.

He said there’s no correlation between last year’s increase in valuation appeals, many of which came from Southwest, and this year’s valuations.

Todd said his 38-person office gets appeals from less than half a percent of property owners in Minneapolis in a given year.

“Time and time again, the assessed value is really close to what things are selling for,” he said.

The Assessor’s Office mailed 2019 valuations to property owners in March and has already started inspecting properties for appeal. The Local Board of Appeal and Equalization will hear appeals April 23 through May 7.

Todd said property owners could show up on one of the mornings of the hearings to make free appeals, though he recommended people call his office first.