Minneapolis, Minnesota, consistently ranks on lists of the top places to live in the United States. According to U.S. News World Report, it’s the sixth-best metro area in the nation, and it’s No. 13 out of 100 best places to live on Livability’s list.
Why? Jobs, economy, and quality of life. Many people are drawn to the city by its 17 companies on the Fortune 500 list, an unemployment rate that hovers around 1% lower than the national rate, or the outdoor-centered lifestyle enjoyed by its residents.
If this is you, it’s important to learn about the realities of house hunting in Minneapolis. Houses in this region need to stand up to some brutal winter weather so the age of windows, the roof, and the furnace should be a top concern. Finding the perfect home can be an overwhelming journey, but if you don’t know what you’re getting into, you could pay heating bills of $600 a month or more.
We interviewed experts like top-performing real estate agent Mark Abdel, who has spent 14 years helping buyers in Minneapolis, and he says the strong schools, healthcare, and high median income all continue to attract people to the area. Given the competition, it can be hard to find your perfect home: you’ll have to know where to look and connect with the right agent.
Start with your budget in Minneapolis
High demand and low supply both contribute to the tight housing market in Minneapolis. Decently priced homes in desirable neighborhoods sell within a day, and often for above the asking price. The median price of sold homes hit $290,000 as of June 2019, setting a new record.
Despite higher home prices, high rents are pushing many into the housing market. The average rent for a two-bedroom apartment was $1,847 in June 2019, and you might have to pay for utilities separately. Larger landlords often require that renters purchase renter’s insurance, too.
By comparison, the mortgage for a $290,000 house with 20% down at October 2019 market interest rates would be $1,192. If rent plus utilities plus renter’s insurance is higher than a mortgage payment, then it makes sense to buy.
When determining your budget, don’t forget that Minnesota charges more property taxes to non-owner occupied homes. To get the owner-occupied rate, you have to homestead your house. Homesteading requires you to complete and file forms with the city stating you will be living in the house.
The average property tax rate in the city is 1.345% higher than the national average. However, the average includes non-homesteaded properties, so this number is a bit misleading.
Get the lay of the land in Minneapolis
The city’s major highways have carved out Minneapolis neighborhoods, creating pockets of delightful charm that are still easily accessible. Abdel’s favorites include Linden Hills, Fulton, and Nokomis.
Tucked between Lake Bde Maka Ska and Lake Harriet, Linden Hills is one of the city’s oldest neighborhoods. Tall trees shade winding roads and bike paths, and large front lawns lead up to imposing brick and stucco homes. It could be a great area for you if you:
- Love having a nationally famous children’s bookstore, Wild Rumpus, where chickens and cats roam freely, independent coffee stores, restaurants, and ice cream shops within walking distance.
- Want access to great schools, lakes, and green spaces.
- Can afford an average home price between $400,000 to $600,000.
Next door to Linden Hills, the Fulton neighborhood has slightly more affordable prices, with median home values of $419, 217. Perks of living in this neighborhood include:
- Access to the same amenities as Linden Hills, such as the lakes, but a cheaper cost of housing.
- Low crime and excellent schools.
- Older children feed into the same high school as Linden Hills residents.
The Nokomis neighborhood offers some of the city’s most affordable housing. Homes are smaller, originally built as vacation cottages around Lake Nokomis. Standard layouts feature two bedrooms on the main floor, an attic converted into a third bedroom, and tiny kitchens. Here are some of the pros and cons of this neighborhood:
- Close to Lake Nokomis, walking trails, and highways 55 and 62.
- Median list prices between $280,000 to $325,000.
- Close to the airport’s flight paths, so planes occasionally fly overhead.
- The city subsidizes soundproofing measures for homes in Nokomis.
Commuting through downtown Minneapolis is a long slog, as Highway 94 narrows to one tunnel, and traffic gets bottlenecked. Most people try to live on the same side of the city where they work. If you have a job in the North or West of the city, you can look in Bryn Mawr, a revitalizing area just a few minutes from downtown.
Due to generational turnover, more Bryn Mawr homes are now coming on the market, but few have been updated. Abel says that although the “area is one of those that still can be decently priced, (you) might have to put a little elbow grease into it,” and that many buyers in the neighborhood are buying and remodeling.
- Median home values in Bryn Mawr match the city’s median value of $290,000 as of October 2019.
- Proximity to downtown has led to a higher crime rate.
- You can score a great deal and cash in on eventual price appreciation.
- The schools aren’t the best in the area — Bryn Mawr Elementary scores a one out of ten on Great Schools.
- Minneapolis has open enrollment, which allows parents to send their children to schools in other districts, as long as they supply transportation.
About 9% of Minnesotan students attend a school outside their district, often going from the city to the suburbs. It’s an option that allows you to buy in one neighborhood and send your children to school in another.
Know the housing in Minneapolis
Almost half of the housing stock in Minneapolis (48%) was built before 1949. While you’ll find gorgeous woodwork and fireplaces, you’ll also contend with radiator heating and detached garages. Before you get scared off by some of these older home’s quirks, know what to expect.
Foundations settle over time, and after a hundred years, the floors may sag a little. It’s nothing to be worried about, assuming there are no large cracks or holes in the foundation. Your home inspector will check the basement for water and dampness, which are a greater cause for concern.
When you live in a city where it snows 54 inches a year, a good roof becomes very important.
Heat escapes from a poorly insulated roof, and with improper grading ice dams develop between eaves.
Reuven Saltzman, owner of Structure Tech, a top-rated home inspection company founded in 1997 with an average 5-star rating on Google, has been a home inspector for more than 22 years. According to him, the more obvious signs that a roof has had ice dam issues are, “beat-up shingles in the valleys and at the eaves, and hack marks or hammer marks on the shingles.”
Heavy snow and ice damages roofs, reducing their energy efficiency, causing leaks, and accelerating their deterioration — meaning you’ll have to replace them sooner. Saltzman advises buyers to get a roof rake and “when you see your neighbors pulling snow off their roof, you do the same.”
All homebuyers should get a home inspection, and Abdel also recommends scoping the sewer pipe leading from your house to the street. “Minneapolis has very mature trees that the roots tend to grow into the sewer line,” he explained.
“A lot of times, those sewer lines are clay, and they have humps and bubbles in them.”
Before you buy, you’ll want to know if you should plan on having the sewer line cleaned out or the pipe replaced at some point.
Minneapolis buyers still want old-world charm, but they’re not usually looking for fixer-uppers. They want remodeled kitchens with quartz or granite counters, updated tile, and stainless steel appliances. A light and fresh look, such as white trim with gray paint, gets buyers excited. As Abdel puts it, buyers “still value the preserved character. They want the built-ins, they want the fireplaces to be original and some of the woodwork, but also want it modernized and updated.”
If you’re looking for a steal, learn to look past a home that hasn’t been modernized to see its potential. Talk to your agent about how easy it would be to paint or make some quick updates and immediately build value. It is simpler to modernize than it is to add old-world touches.
When to buy a house in Minneapolis
The best time to buy a house depends upon your main buying concerns. Do you want to find the cheapest option possible? Or choose from a wide selection of homes?
Abdel warns that demand gets pent-up over the winter, and the housing market tends to take off after the Superbowl. Home prices spike between April and June before dipping again when everyone goes on vacation in July and August. This time of year, you’ll have the most homes available to buy.
If your primary goal is to get a cheap home, shop in the winter months. But you won’t find much selection.
Find a top buyer’s agent in Minneapolis
The top 3% of realtors in Minneapolis buy and sell homes 82.5% faster than other agents, which demonstrates their negotiating and closing expertise. You don’t just want a Realtor to help you find a home; you’ll need one for negotiations and seeing the transaction through to close.
It’s a competitive housing market in Minneapolis, and you could face a situation where you’re one of many offers. A great buyer’s agent will put together a strong offer letter that appeals to the sellers, whether it’s facilitating a quick and flexible closing or including escalation clauses that help you beat out other buyers.
Reach out today, and we’ll connect you with one of HomeLight’s vetted, local real estate agents.
Header Image Source: (Nicole Geri/ Unsplash)