The Southwest Journal recently reported about rent increases in several Lyndale Neighborhood multi-family buildings. That strikes us as a good time to take the pulse of the owner-occupied or homeownership market.
Lyndale neighborhood prices have risen, as have those in Powderhorn and the entire city. Lyndale prices are hovering between the powderhorn community and the entirety of Minneapolis. At $217,450, prices are just under 10.0 percent higher than in the Powerderhorn Community but have risen about 28.0 percent from this time last year.
For those looking for condos, however, the landscape is significantly more affordable than when you include single-family homes in the mix. Lyndale condo prices are $127,500, the same as Powderhorn, significantly less than Minneapolis and have only risen a more modest 8.1 percent over the last year.
Locking the right condo into a purchase agreement can be challenging, however. Inventory levels are quite thin, which can pit serious buyers against one another and also suggests that sellers are likely to get (and accept) strong and competitive offers.
Both home prices and rents are rising across the board, though at differing rates depending on location, building and price point. There are still lots of asymmetries when it comes to supply and demand. The key to overcoming any affordability challenges will be maintaining our steady job and wage growth and ensuring home prices rise in line with incomes.
As the sounds around the University of Minnesota campus transition from construction equipment to the anxious clamor of students there is no shortage of activity around the Prospect Park neighborhood on the eastern edge of Minneapolis. Adding to that is the reopening of West River Parkway after a June 2014 landslide closed the parkway for over two years. Motorists, cyclists and walkers—really anyone attempting to move around the area—reveled in the reopened corridor
Prospect Park also features a variety of delightful properties. Homes in the community tend to be of a fairly high caliber, and prices in the neighborhood exceed those in the surrounding city by approximately 38.0 percent. Also noteworthy is the fact that Minneapolis home prices appreciated 4.7 percent over the last year compared to 24.0 percent price change in Prospect Park.
Inventory levels have been thin across the metro area, particularly at the affordable, entry-level price points in Minneapolis and St. Paul. In Prospect Park—perhaps due in part to light rail—there also seems to be a divergence between single family and townhouse-condo inventory. It seems as though townhomes and condominiums are making up a larger and growing share of the overall inventory pie, as they did from 2007 to 2009.
Those shopping for homes in this area can expect to pay about $190 per foot. So a 1,700 square foot home would cost approximately $323,000. But it’s important to understand that market dynamics vary not just by location by also by price point. A family shopping for a 1,400 square foot home in Prospect Park can expect to pay $211 per foot, while a family shopping for a 2,800 square foot home in the same neighborhood can expect to pay about $135 per foot.
Comprised of eleven neighborhoods stretching from Minnehaha Falls over to 35W and roughly from 42nd St. E. down to the Crosstown, the Nokomis Community offers classic South Minneapolis living with convenient lake, dining, nightlife, transit and freeway access.
Though it wasn’t always the case over the last decade or so, the Nokomis Community boasts higher median home prices than both the metro and the City of Minneapolis. The most recent July figures show the Nokomis median home price at $239,900, Minneapolis at $225,000 and the metro at $227,000 (rolling 12-month view).
Looking just at single-family homes, Nokomis properties have consistently commanded a higher price per square foot than both the city and the metro. At $161, buyers are willing to pay a nearly $10 per foot price premium to be in Nokomis compared to the rest of Minneapolis.
Shifting gears to neighboring South Minneapolis communities, Nokomis is toward the higher end of the pack for median sales price, even though it trails the Southwest Community by over $100,000. It does, however, boast higher price points than both Powderhorn and Longfellow.
Partly due to that marginally higher price point, Nokomis has an absorption rate slightly higher than neighborhood Longfellow and Powderhorn but well below the 2.1 months of supply available in Southwest.
The good news? South Minneapolis has a neighborhood for just about everyone.
The Lyndale Neighborhood is part of the Powderhorn Community and not the Calhoun-Isle Community (or “Uptown” to some). The Powderhorn boundary juts out to the west of I-35W to incorporate Whittier and Lyndale (map). Whittier and Lyndale are typically thought of as part of “Lyn-Lake,” just in case the various official and unofficial geographies weren’t confusing enough.
In terms of the price per square foot of a traditional, single-family, previously owned home, Lyndale tracks very close to the city with a value of $156 per square foot compared to $155 for Minneapolis. Just across Lake Street to the north, similar Whittier properties are selling for $151 per square foot.
Absorption rates are noticeably tighter in Lyndale than in Minneapolis. There are currently 1.5 months supply of inventory in Lyndale compared to 2.2 months supply in the City of Minneapolis as a whole. That means that there is about 50.0 percent less supply relative to demand in Lyndale compared to the city.
Similarly, homes in Lyndale are taking a median of 20 cumulative days on market to go under contract. For comparison, sellers in Minneapolis are waiting a median of 28 cumulative days before accepting offers.
Lyndale sellers are accepting offers at a median of 98.7 percent of their original list price. That’s one of the highest figures compared to nearby peer neighborhoods. Whittier sellers are accepting 97.2 percent of their original list price, Lowry Hill East sellers are accepting 98.3 percent.
Examining listing activity, active counts or sales trends by price range can shed a lot of light on local market dynamics. In terms of seller activity, the $200,000 and up range used to be the lion’s share of the market from 2005-2008. Since mid-2013, the $200,000 and up price point has once again dominated new listing activity.
The name “Wayzata” is from a Lakota Sioux phrase meaning “North Shore”—a rather fitting name for the city that occupies a hearty share of Lake Minnetonka’s northeasternly shore. Wayzata is a water-oriented community with a 2010 population of 3,688. Newsweek included Wayzata High School on its list of the top 1,000 public high schools in America.
The Wayzata housing market has always trended above that of the metro area as a whole. The city has a median sales price of $415,000 for single family, previously owned, traditional properties. That compares to a figure of $245,000 for the Twin Cities metro as a whole, meaning the city has a 70.0 percent premium in median sales price versus the metro area.
Thanks to its orientation around water, there are notable differences in the various waterfront types for different market segments. Based on the data, it seems like a phenomenal time to purchase private waterfront property in Wayzata! That segment is having a 50.0 percent off sale (that is, of course, if you can successfully acquire one of the five active listings).
After creating some custom price ranges by clicking on the “custom” button next to the price range variables, we can quickly ascertain that roughly 25.0 percent of the single family pending sales in Wayzata are above $1,000,000.
Absorption rates vary notably by price segment. There are 4.9 months supply of inventory of homes under $1,000,000 which is more or less considered balanced. But there are 8.9 months supply of inventory of listings over $1,000,000—which indicates a slight oversupply. However, 8.9 months is far more balanced than the nearly 20.0 months supply in this segment back in 2009.