If you’ve been watching the evening news or reading what’s been coming off the press, you might be thinking that the sky is about to fall on Minnesota home prices. You’ll hear a lot of doom and gloom and a lot about the S&P/Case-Shiller Home Price Indices. I assure you that the media will not do an adequate job of explaining what this does and more importantly does not mean to you as a Minnesotan.
Since the great recession hit, metropolitan areas have increased in home values 3 percent from their lows. There were 5 major metropolitan areas that bucked the trend by strongly rebounding in their respective home values. They included the Minneapolis, MN area (including Saint Paul of course). The Twin Cities have come up 9 percent off the bottom:
As you can see it would take more than a dip to knock Minnesota home values off their gains.
Prevailing wisdom has it that the main driver of improving home values has been and will continue to be the employment market. This might explain why the Minnesota housing market has outperformed all but 3 of the major metropolitan statistical areas in the Case-Shiller Composite 20 City Index. While the employment market nationwide is only now starting to recover (maybe), the Minnesota employment market started its recovery in March of 2009. The national unemployment rate in November stood at 9.3% while Minnesota’s unemployment rate stood at 6.6% (with an established downward trend by the way).
The moral of the story is this. Housing is an extremely local matter. In fact, your Realtor can tell you about value gains and losses in areas down to a micro community level. Unfortunately, due to media consolidation, there has been a trend of nationalizing information leading to a loss of abundant and quality local data. Make sure when you’re buying you’re home, you filter out the misinformation localize your information sources!
Charles Dailey – Branch Manager, Loan Officer, Certified Military Housing Specialist – CA DOC, MN DOC & WI DFI
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Great information Charles! Unfortunately, most people get thier social reality from the media. The negative coverage causes economic pessimism which has people putting the brakes on borrowing and spending thus slowing economic growth. It’s a vicious circle and I, for one, am ready for some optimism. Thanks for providing some!
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