Minneapolis is a beautiful place to buy a house. Whether you’re moving in from out of state or you’re a veteran of the city, there’s no better place to establish your roots than in the Twin Cities. With abundant lakes, parks and bike trails, and ample opportunities in the housing market, there’s no better place to call home.
Looking for real estate in the area? Adorned Homes wants to provide you with the information you need to make an educated decision on buying a home in our city. We can’t wait to call you our neighbors – so let’s get started!
Quick Facts about Minneapolis Home Ownership
The Minneapolis housing market provides many benefits to newcomers and current residents alike. To start, here are a few quick facts about Minneapolis and its housing market:
- If you move to Minnesota, you come to a state with one of the highest quality of living ratings in America. And for good reason: It offers thousands of lakes, featuring more shoreline than California, Florida and Hawaii combined. There are gorgeous national parks and the largest camping area in North America that provide ample outdoor activity. And it’s also home to the Twin Cities, the 16th largest metropolitan area in the country.
- Minneapolis is situated immediately east of Minnesota’s state capitol St. Paul, making up the two halves of the twin cities. Minneapolis, with a population of more than 400,000 people, is the larger of the two cities, and has grown by 5% since 2010.
- The housing market has been on the up-and-up. Throughout the Great Recession, the market value experienced a prolonged downturn in home prices that lasted four years. As of April of 2016, the prices rose to a level just below pre-recession highs, with a median price of $210,000, indicating a resurging and growing housing market. This is good news for those folks that are considering a middle to long term purchase, as you’ll likely see a return on your investment.
- Minnesota is home to more than 200 colleges and universities, and 33 of them made the annual list of Best Colleges by U.S. News and World Report. Additionally, Minneapolis and St. Paul were both top ranking cities on a list of the most literate cities in the U.S. It’s a great location for both growing families looking for a city with good school systems and college-bound go-getters alike.
- Interest rates for mortgages continue to hover at low rates while many lenders are easing buying criteria for customers. It’s a great time to buy as the interest rates will only continue to rise as the economy recovers.
Overall, we think Minneapolis is a great place to live. Now, let’s dive into more detail about purchasing a house here.
Finding Your Dream Neighborhood in Minneapolis
First, you should research and visit (if possible) various neighborhoods throughout the city. Minneapolis is home to a lot of stunning neighborhoods featuring diverse amenities, interesting architecture and countless acres of parks. With so many unique areas, it may be hard to narrow your choices down, but there are a few specific neighborhoods throughout the city where people tend to flock that you can start with.
The most expensive neighborhoods are the Southwest neighborhoods surrounding Lake Harriet Park and the Calhoun Isles neighborhood, between Lake Calhoun and Lake of the Isles. If you can’t afford a median sale price of $354,000, don’t worry, there are several neighborhoods right close by that offer just as many benefits, if not more.
Located just beyond Lake Harriet is Linden Hills. Known for it’s tree-lined streets and gorgeous mix of house styles, this area has charms you won’t find anywhere else in the city. Affordable and spacious, this area is known to locals as the “small town in the big city”.
If you love unique, Tangletown is the place to be. Featuring winding, twisting roads (hence the name “Tangletown”), it completely ignores the city grid like other areas. It’s home to Minnehaha Creek and the famous Minnehaha Falls, a 53-foot waterfall and one of the largest in the entire state. It also features the historic Washburn Park Water Tower, an art-deco style landmark built in 1932.
St Anthony Main is where the action is at. The area is home to various festivals and events throughout the year, such as the City’s Fourth of July Celebration and the Stone Arch Bridge Festival. With the Mississippi River bordering the neighborhood, residents are treated to delightful, contrasting views of natural and urban features.
If you’re keen on taprooms, restaurant patios, biking or artistic endeavors, Northeast is the place to be. Home to relatively low rents and some of the oldest architecture in the city, Northeast is at the forefront of a local artistic revival in an industrious setting. The neighborhood is considered the epicenter of creativity in Minneapolis, harboring artists, musicians and other creative types and maintaining its bootstrap roots.
There’s a neighborhood for everyone in Minneapolis. Finding yours may depend on your lifestyle and tastes, but another half you need to consider are finances.
What You Need to Know About Taxes
Let’s transition into the business side of things. Let’s talk taxes.
The duty of property tax in Minnesota is to fund a wide variety of local public services, including parks, fire departments, water management, public health services and libraries, as well as county and city governments, capital projects, and school districts.
In areas around the state, your property taxes are determined by the net tax capacity (NTC) of your property. NTC is calculated dependent upon market price, as specific exemptions are available on properties valued under $413,000. Minnesota also places an added tax on property valued at more than $500,000.
The effective tax rate across Minnesota is 1.17%, whereas the national average is 1.19%. It can be a little bit more pricey in Minneapolis, however. People in Hennepin County, for example, pay an effective property tax rate of 1.32%. If you bought a $230,900 house, you’d pay $3,037 in taxes a year.
Minnesota counties also charge a real estate transfer tax equal to 0.33% of a property’s actual market value — also known locally as the deed tax. If you’re confused about all this mumbo-jumbo, the next section should give you the resources you need to figure it out.
Choosing the Right Agent
With so much to consider, you need someone that fights for you. Enter the real estate agent.
Choosing the right agent is important so that you can you save time and money on the process of buying a home. You need someone knowledgeable and experienced to guide you through the complex process. If you’re shopping around for real estate agents, here are some questions that you can ask to ensure that they’re working for you, and not just a commission:
- Why do you enjoy being a real estate agent?
- Why should I work with you and/or your agency?
- What do you do that’s better than your rival agent?
- Do you have references and can I see the listing information of previous clients?
- What is the average time it takes from initial talks to closing on a house?
- Do you work closely with other housing professionals and what are their credentials?
- What are common problems in the buying process and how do you avoid them?
A typical real estate transaction can include about two dozen separate individuals. From the Realtor to the escrow offers, mortgage person to the loan officer, there’s no shortage of duties when it comes to the ownership of property. Your real estate agent in Minneapolis should know the nuances and qualities of each individual role and be helpful in answering any questions, no matter how complex.
A good real estate agent can very easily make or break the sale, especially if you’re a young buyer. If you can obtain a referral, that’s normally the best way to find someone trustworthy.
Now, let’s get back to the more fun side of things. After all, there’s more to life than just sitting at home — you need to experience everything Minneapolis has to offer!
Minneapolis is a Bad Place to be “House Poor”
With so many activities, events and general happenings throughout the year (yes, even in the coldest winters!), you should prepare to save up an entertainment fund, if that type of stuff interests you. Being house poor, when you’re spending enough money on your house that you can’t save for anything else, isn’t very fun when there’s so much to do. Let’s check out some of the unique events you can attend throughout the year.
- Rock the Garden
Minneapolis’ largest music festival takes place on the grounds of the Minneapolis Sculpture Garden in late July. The festival has featured such artists as Chance the Rapper, Policia and the Flaming Lips.
- Take advantage of professional sports
Minneapolis is home to a number of different professional sports teams, such as the Vikings, Twins, Timberwolves, Wild and Lynx. With the newly-opened U.S. Bank stadium and host of the 2017 Super Bowl, Minneapolis sports teams always provide a wonderful experience.
- Loring Park Art Festival
Located in the expansive Loring Park on the edge of Downtown Minneapolis, the summer art festival features artist booths stocked with vibrant local art, live music, and food. With more than 140 visual artists selling original work, there is surely something for every attendee.
- Twin Cities Marathon
This is an annual marathon that’s dubbed, “The Most Beautiful Urban Marathon in America”. Normally occurring in the first weekend of October, it’s one of the 10 largest marathons in the nation. Not only is there a race, there’s a full weekend of events providing activities for runners and casual spectators alike.
- Minnesota State Fair
As the largest state fair in the United States, the Minnesota State Fair is a sight to see. Fair-goers can revel in a number of different attractions, such as gigantic pigs, exhilarating rides and an all-you-can-drink milk stand. It was even named the best state fair in the United States in 2015 by the readers of USA Today — so you know you can’t pass it up!
- Winter Carnival
Although it’s located in Downtown St. Paul, the Winter Carnival is worth the drive across town. As the nation’s oldest and largest winter festival, attendees are treated to jovial parades, cultural celebrations, a giant snow slide and intricate snow structures. Perhaps the most exciting event that takes place during the festival is the Red Bull Crashed Ice Race. Ice hockey skaters race down a giant, downhill ice course, and crashing ensues.
**Note – we could create an entirely new list with things to do in St. Paul. Just something to keep in mind as you’re making your decision to move — it’s like getting two for the price of one!
- Loppet Cross Country Ski Festival
The Loppet is an urban cross country ski festival located in the heart of Uptown. Cross country skiers literally race through the streets of uptown and across the Chain of Lakes. There’s also a snow sculpture contest, beer garden featuring local beer from Surly, and a skijoring race, where skiers team up with man’s best friend and race for first place.
If you’re worried that finances may be tight, try to be frugal for the first few months after your purchase and you’ll be better positioned to afford more later on. Thankfully, the median household income in Minneapolis is about $51,000, and the cost of living is fairly low, so you should be able to save up for at least one or two awesome local events throughout the year. Plus, there’s a ton of free events happening around the city every day to take advantage of.
General Rules of Thumb when Buying a Home in Minneapolis
Minneapolis has some great housing opportunities for all types of buyers. After you take the leap and become and buy a house, you should consider some of these general rules of thumb.
Consider Your Ideal Home Style
What style of home have you always dreamt of owning? Does Victorian, colonial or craftsman suit your fancy? Then you’ll love Minneapolis. While every type of home is available, from modern to Cape Cod, those three are the most popular. What style of home you end up buying will depend upon your tastes and needs as well as price point.
Maintaining Your Property
Minneapolis experiences four seasons, so if you buy a house here, you need to put a little work into maintaining your property and protecting your investment. People in Minneapolis generally take pride in their property and provide it with standard to above standard treatment. The city ordinates that grass needs to be shorter than eight inches and snow needs to be shoveled from sidewalks within 24 hours of snowfall.
Protect Your Investment – Get Insurance
Blizzards, tornadoes and lightning storms can come in throughout the seasons. With the unexpected can come huge potential damage costs — homeowners insurance is a necessity!
Build Your Investment – Consider a Fixer-Upper Property
Sometimes it’s wise to buy a cheaper house with a few problems and put some work into it to reveal its natural beauty. Adorned Homes has been providing renovation, sales, design and logistical services in Minneapolis and has seen the potential of local houses firsthand. The housing market offers many architectural wonders at affordable prices. With the right help and a can-do attitude, you can build the space of your dreams.
Ready For the Big Move?
Minneapolis offers amazing real estate opportunities and one of the highest qualities of life ratings in the country. No matter where you live, if you’re looking for real estate, put Minneapolis on the list. Best of luck with your house hunt and look us up when you get here – we’re excited to say hello!