The report released by the Federal Housing Finance Agency in late November was not expected to hold great news. The House Price Index (HPI) report showed that across the United States the average appreciation was -4.00 during the past year. Minnesota’s appreciation rate was -4.33 just slightly worse than the national average. It ranked 41st out of 51 (states plus the District of Columbia). Though several other states were exhibited higher depreciation rates, there is no cause for celebration. The affect of foreclosures on the market are evident.
The bottom of the list states are no surprise either. Four states showed double digit depreciation; Nevada with -20.92, California with -20.79, Florida with -16.04 and Arizona with -13.49.
Our neighboring states faired somewhat better than we did in Minnesota. Wisconsin, though feeling the strain of the mortgage meltdown, came in with a -1.30 which was ranked 28 of 51. While Iowa and both Dakotas showed positive appreciation, Iowa with 0.67 was 14th from the top, while South Dakota and North Dakota held the number 2 and 1 spots with 3.89 and 4.02 respectively.
Interestingly, not one city in Minnesota made the list of communities with the lowest appreciation nor did any city in North Dakota make the top listing.
One reason for the high numbers in Minnesota comparatively to neighboring states like the Dakotas can be attributed to the limited use of subprime mortgages in the Dakotas and Iowa. North Dakota natural gas reserves may be another contributing factor for the increasing real estate values.
Home buyers in Minnesota can benefit from the situation as the Affordability Index is significantly better than in nearly a decade. First time buyers can really benefit as houses in some communities are selling at tens of thousands less than they had just a few years ago.
Need help understanding today's changed real estate market? If you are buying or relocating to Minnesota and need help from a professional REALTOR®, give me a call or visit my website for a FREE Relocation Packet or Homebuyers Success Packet. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.
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