MINNEAPOLIS (WCCO) — A report released Tuesday is giving us some new insight on home sales in the Twin Cities.
It takes a look at how neighborhoods in Minneapolis and St. Paul seem to be recovering from the foreclosure crisis.
The study by the Minnesota Homeownership Center in St. Paul found that while the foreclosure crisis is nearing an end, some neighborhoods in Minneapolis and St. Paul continue to face depressed home prices. Some neighborhoods, however, are booming.
When researchers compared neighborhoods where the majority of residents are people of color to neighborhoods that are predominantly white, they found the home ownership gap has widened.
Julie Gugin is the executive director of the Minnesota Homeownership Center.
“We have a home ownership rate I believe of white households of 73 percent. In communities of color, we have one of the lowest rates of home ownership in the country. That’s a huge disparity,” Gugin said.
And there’s another difference – the prices of homes. Gugin says in north Minneapolis, prices have decreased so much that if you bought a house in 2006, you would need to see your 2013 home value increase by 85 percent to return to its purchase price.
“They’re underwater on their mortgages. They owe more on their homes than they’re currently worth. And we see that trend predominantly concentrated in areas like north Minneapolis,” Gugin said.
Over in St. Paul, it’s neighborhoods on the East Side that are seeing home prices struggle, such as Payne-Phalen and Dayton’s Bluff.
“That’s a huge problem. Those households are not enjoying a robust return to the economy,” Gugin said.
In contrast, predominantly white neighborhoods like Highland Park in St. Paul and most of southwest Minneapolis has already recovered any lost home value from a few years ago.
“As a result, homes there now are selling quicker again and the values are recovering quicker, demand is hot, so the values are recovering,” she said.
Another finding in this report has to do with people in their 20s. It found that they are delaying buying houses because they simply can’t afford them.
In many cases, people in their 20s are seeing a slow start to their careers and are dealing with a lot of student loan debt. Many are opting to rent or return to their parents’ homes.
The Minnesota Homeownership Center and a group of non-profit agencies it works with are offering a series of free classes in June designed to educate potential homebuyers.
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