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After many hours of research and browsing this forum, we think that the area we would love best for our family of four (3.5 year old and 1 year old girls) is Linden Hills. I work out of my home office and this is the area we think we would like best for our family out of anywhere in the US.
Looking at current house prices for the Linden Hills area, it looks like 3 bedroom houses can be found in the $300,000-$350,000 range. Looking at the history of the area, this looks to be very low for the area.
The general plan would be to try to get a rental in that area and live there through 2014 and then buy a house in that same area in 2015. The big question I have though is if it would be better to try to buy a house earlier than that while home prices are lower in the area? In other words, is it likely for the low to become $400,000-$500,000 for a 3 bedroom house in that area in the next 3 years?
We would like to knock down some of our debt before buying another house. But we also would hate to be priced out of the area. Any thoughts on this would be appreciated!
No one knows what house prices will do, so all you'll get here (or anywhere) is an opinion. That said, here's mine. House prices are unlikely to appreciate measurably in any area over the next several years. The bubble was too big and it's not fully deflated. On the positive side for Linden Hills is the draw of Lake Harriet School, which creates some demand, and the fact that there isn't much supply overhang from foreclosures, etc. on the negative side, Linden Hills is over priced in comparison to comparable Minneapolis neighborhoods like Fulton, or those on the other side of the lake, such as Lynnhurst or Kingfield. It seems unlikely to me that you'll be priced out of LH if you choose to wait, and you can use the time to explore other neighborhoods nearby.
After many hours of research and browsing this forum, we think that the area we would love best for our family of four (3.5 year old and 1 year old girls) is Linden Hills. I work out of my home office and this is the area we think we would like best for our family out of anywhere in the US.
Looking at current house prices for the Linden Hills area, it looks like 3 bedroom houses can be found in the $300,000-$350,000 range. Looking at the history of the area, this looks to be very low for the area.
The general plan would be to try to get a rental in that area and live there through 2014 and then buy a house in that same area in 2015. The big question I have though is if it would be better to try to buy a house earlier than that while home prices are lower in the area? In other words, is it likely for the low to become $400,000-$500,000 for a 3 bedroom house in that area in the next 3 years?
We would like to knock down some of our debt before buying another house. But we also would hate to be priced out of the area. Any thoughts on this would be appreciated!
Linden Hills is nice, very nice, but I'd look at Kenwood or Lowry Hill if you can swing it financially. They're nicer & more prestigious than Linden Hills. Both have lake access (To Isles, the nicest lake imo), plus access to Uptown Mpls. Grade schools, middle schools are comparable & both share Mpls SW for High School. If you're dead set on the Harriett area, then also consider Lynnhurst. Having many friends from both areas when I went to Mpls SW the real wealthy kids came from Kenwood/Lowry Hill & lived in incredible homes, the kids who's parents were strivers lived in smaller houses in Linden Hills. In the end I think you don't get much bang for your buck in Linden Hills & you can do better. If you're dead set on it, then rent & wait. I don't see the market going anywhere but down over the next 5-10 years.
The main reason to choose Linden Hills over another SW Minneapolis neighborhood is because you like the core downtown area and the concentration of library, park, stores, etc. My sister-in-law recently purchased a house in Tangletown after looking all over SW; she didn't understand the appeal of Linden Hills, as the you get a lot less house for your money there than you do in some of the other SW neighborhoods that were equally convenient as far as access to Lake Harriet. For her, paying to live in LH would have been a waste of money. It's one of those things that if you don't really love the "village" element of LH you might be happier with any number of other nearby neighborhoods that have some of the same benefits, but potentially a bit cheaper for what you get for your money.
For a cheaper neighborhood still close to the lake (lacking a "downtown" but still with a nice array of local businesses and gathering places, and an excellent farmers market and a really strong community group and nice neighbors) Kingfield would be my suggestion as far as neighborhoods to investigate -- I think it has a similar feel in some ways, and it is more affordable.
My guess is that housing prices in Linden Hills will stay stable or increase. I doubt they'll drop, but I doubt you'll see rapid price escalation, either. Renting now, buying later, seems like a good plan. You'll have the chance to really get to know the area and get rid of your debt. 300k isn't going to buy you much in LH these days, anyway; or, rather, you can buy something, but at that price point you'd probably be on a busy street. Renting will give you the time to figure out what priorities are most important to you and how you want to best allocate your money. (for me, I'd take a tiny Linden Hills house on a busy street over the bigger house in Lynnhurst, but many others would make a different decision. You have a lot of decent options in the same general geographic area, so even if you rent in LH for a year and ultimately buy in, say, Kenny or East Harriet your kids will still be able to go to the same preschools, play at the same parks, have the same nearby circle of friends, etc.).
Oh, while you're at it, check out the ECFE classes at Kenny School. GREAT way to meet other parents, and they have classes for both the babies and the toddlers/preschoolers.
Mason3000: Kenwood or Lowry Hill all look incredible, but there is no way we could afford most of those properties. $350k would be our very top end...and that might be pushing it with what I make now. Right now I make $82k per year, but my wife is probably going to start working in a few years. But I don't envision us even coming close to getting into the low end of that neighborhood. I do appreciate you bringing up this area...as I hadn't even heard of it before.
uptown_urbanist: Thanks for sharing your knowledge! I think what you describe you would do is probably where we are at (smaller house for a better neighborhood).
Keep in mind that we haven't even visited these areas yet (we still live in MT...we have a trip planned in October to visit Minneapolis).
But what I like about LH from my research is how extremely walkable it is and how it is close to everything the lake trail system has to offer. I read about how elementary kids can play in the neighborhood with minimal parent supervision and the community is very welcoming and family friendly. For all of this we would be willing to sacrifice on size and quantity in a house. Looking at what is listed now, this looks like it might be perfect, and it is listed at $290K: 4012 Abbott Ave S, Minneapolis, MN 55410 MLS# 4077899 - Zillow . But there aren't many of these types of listings, so I'm assuming this probably an exception.
But I also understand that nearby areas may be a better fit in getting a similar house (or better) for less and still be very good. I look at this as more than just an investment in a property, but more of an investment in the quality of life for my family.
You should continue be able to find a home in that price range. If anything once prices rise, you may get less for your dollar, but you shouldn't be totally priced out.
Can I guarantee you that you can make $150K-$200K on a low-end Linden Hills home in 2-3 years? Absolutely not! For one thing, if you find a 3 BR house in Linden Hills it's probably very small or has a lot of issues with it -- or both. There ARE a lot of modest homes in Linden Hills that just happen to be a part of that neighborhood, so they aren't exactly rare, but it IS rare to find a steal of a deal like the one you are describing. If anyone here had that kind of foresight and knew what you thought you knew, they'd buy the house themselves or at least find an investor and get a piece of that sweet deal.
In other words, nobody can give you any guarantees like that and if anything, it's dillusional to think that way in the 1st place. What you should be thinking is: would I invest in a home that I could rent out for more than it costs to pay for the mortgage while myself and my family move to MN and get adjusted for a couple of years? Or, should I buy a home that my family loves and, assuming 0% return on our investment over the next 2-3 years, would be more than happy to be still living in, considering that other homes may make some money and others may lose some money? Your focus should be on how the home suits YOU or, if you want to be an investor, how the home can suit somebody else assuming 0% appreciation on the asset itself. Don't bank on things you have 0 control over.....bank on the things that you can measure and control.
Wish I could tell you what you wanted to hear.....but I think that'd be very misleading!
Mason3000: Kenwood or Lowry Hill all look incredible, but there is no way we could afford most of those properties. $350k would be our very top end...and that might be pushing it with what I make now. Right now I make $82k per year, but my wife is probably going to start working in a few years. But I don't envision us even coming close to getting into the low end of that neighborhood. I do appreciate you bringing up this area...as I hadn't even heard of it before.
uptown_urbanist: Thanks for sharing your knowledge! I think what you describe you would do is probably where we are at (smaller house for a better neighborhood).
Keep in mind that we haven't even visited these areas yet (we still live in MT...we have a trip planned in October to visit Minneapolis).
But what I like about LH from my research is how extremely walkable it is and how it is close to everything the lake trail system has to offer. I read about how elementary kids can play in the neighborhood with minimal parent supervision and the community is very welcoming and family friendly. For all of this we would be willing to sacrifice on size and quantity in a house. Looking at what is listed now, this looks like it might be perfect, and it is listed at $290K: 4012 Abbott Ave S, Minneapolis, MN 55410 MLS# 4077899 - Zillow . But there aren't many of these types of listings, so I'm assuming this probably an exception.
But I also understand that nearby areas may be a better fit in getting a similar house (or better) for less and still be very good. I look at this as more than just an investment in a property, but more of an investment in the quality of life for my family.
If that's the case ($350K being your top end), then maybe you should buy the "castle" in neighborhoods like Kenny, Armitage, or maybe even SE 'hoods nearer Nakomis or along the Minnehaha Creek instead of finding the shack in the rich neighborhood. I know this isn't usually the way you invest in housing, but this isn't as much an investment if you actually live in this house, and your family is probably the most important asset you have (as is their happiness). Besides, $350K doesn't get you a "castle" in those neighborhoods either, but it can get you a rock solid home in a VERY good school district (if you're in the Southwest district). Focus on that district and also proximity to:
Min-Chi-Cbus: I'm not wanting to purchase a house to rent out. It would be to live in. The real question is whether I should focus on trying to save for a down payment now to purchase a house sooner or to just rent, pay off debt and buy a house in 3-4 years.
My main purpose was to get some context for the area. It doesn't sound like this is a once in a lifetime time period to buy a house in that area, which is all I wanted to know.
If that's the case ($350K being your top end), then maybe you should buy the "castle" in neighborhoods like Kenny, Armitage, or maybe even SE 'hoods nearer Nakomis or along the Minnehaha Creek instead of finding the shack in the rich neighborhood. I know this isn't usually the way you invest in housing, but this isn't as much an investment if you actually live in this house, and your family is probably the most important asset you have (as is their happiness). Besides, $350K doesn't get you a "castle" in those neighborhoods either, but it can get you a rock solid home in a VERY good school district (if you're in the Southwest district). Focus on that district and also proximity to:
That's great advice, and we may decide to go that route. I'm sure any of those areas is 3x better than what we are used to in the small towns of Montana.
I can't wait to visit this area. Thanks for the tips!
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