Todays article in the Star Tribune describes the benefits of living in St. Louis Park and Golden Valley; both communities have experienced larger median home sale increases over the past decade compared to other surburan communities west of Minneapolis. I’ve alwasy been a big proponent of both St. Louis park and Golden Valley as I have bought properties in both communities. I believe Golden Valley is the next “St. Louis Park” and will continue to evolve and redevelop once the housing market turns.
St. Louis Park homes no longer so affordable
Golden Valley also has seen home values rise enough that many would-be buyers are priced out of the market.
By MARY JANE SMETANKA, Star Tribune
Last update: September 7, 2010 – 4:34 PM
Ten years ago, four out of five houses in St. Louis Park were within the financial reach of families with modest incomes who wanted a home.
Today, that figure has dropped to slightly more than half.
City Council members met recently to talk about changes in affordability of housing in the city, and some were surprised at how St. Louis Park compared to surrounding communities.
On a list of cities that included Brooklyn Center, Richfield, Robbinsdale, Crystal, Hopkins and Bloomington, the least affordable were St. Louis Park, Golden Valley and Edina. St. Louis Park and Golden Valley showed the biggest 10-year drop in the proportion of housing that could be bought by a four-person household earning 80 percent or less of the median area income, or $64,000 a year.
In St. Louis Park, the proportion of homes valued at $233,000 or less dropped from 80 percent in 2000 to 57 percent this year. In Golden Valley, that figure dropped from 61 percent to 47 percent.
By one measure, that’s good news: Homes have increased in value and are holding value better than those in surrounding communities. But is it a good thing for the character of a community? St. Louis Park City Council Member Anne Mavity sees both sides.
“Properties have been maintaining value in St. Louis Park, and that’s really positive because it’s certainly not true of every community,” she said. “I think the challenge for the whole metro area, and frankly the nation … is how we help new families and homeowners get into housing.
“When I moved to St. Louis Park 12 years ago as a single mom with two kids, I was able to buy a house for $105,000, a nice three-bedroom home. That’s not possible anymore. Or if it is, it’s possible only in a limited way.”
Jonathan Spar, a real estate agent with Edina Realty, has current listings in St. Louis Park that range from a $2 million home to a $180,000 condo. He isn’t surprised homes are holding their value. “It’s a dichotomy for the city, because you want to remain affordable, but people want their homes to retain value, too,” he said.
At open houses in St. Louis Park, Spar said he meets people from cities such as Eden Prairie and Maple Grove who want to be even closer to Minneapolis.
“They say we’ve been there, we’ve done that, and when they want to come in, they want to be really close,” he said. “The [Minneapolis] lakes are a big draw, and city nightlife is a big draw. I also get a lot of people who grew up in Edina, St. Louis Park and Golden Valley who want to come back.”
In Golden Valley, City Planner Joe Hogeboom said the city’s major multi-family housing development in the last decade was a high-end development. Although Golden Valley’s housing stock is quite different from St. Louis Park’s, with many big homes on large suburban lots, he thinks homes have held their value for a similar reason: Location. Tighter economic times are pushing people who once were willing to drive 40 miles to work back toward first-ring suburbs.
“We sort of have the best of all worlds, with larger lots but proximity to downtown,” Hogeboom said. “People who live in homes here have been there for quite some time. The decline in affordable housing may partly be because we haven’t had the ability to build single-family homes or condos on a large-scale basis in the last 10 years.”
Both cities have met or exceeded goals for low-income housing set with the Metropolitan Council and have added Habitat for Humanity homes. St. Louis Park, which has lots of small Cape Cods that are ideal starter homes, as well as condo and townhouse developments and big homes in some neighborhoods, has used loan and housing initiative programs to try to help young families and singles move to the city.
Even something like the city’s “Move Up in the Park” loan to improve starter homes affects affordability, Mavity said. The program, which tries to keep young families in the city by offering no-interest loans up to $25,000 to help remodel houses, increases home values — and makes them less affordable for the next buyer. The city also has very strict inspection standards for homes that go up for sale, which Mavity said is an effort to ensure that even old homes are in good shape.
Council members asked for the housing information because they wanted to understand what the situation was, Mavity said.
“It’s a little unclear what the right balance is,” she said. “I don’t know that the council is saying this is a problem, but we want to make sure that families and others can come in and buy homes…
“I think we have been proactive and strategic and thoughtful, but rather than react to a crisis, we want to get a handle on what the situation is and make sure our financing tools are appropriate for the situation