Minneapolis Prepares for Value Surge and Refi Opportunities

By Joe Taylor Jr.
Local Lender Columnist
Jul 28, 2006
While rising mortgage rates have caused real estate markets like New York and Florida to cool off, so called "hybrid" cities like Minneapolis stand to pick up steam over the next few years. Experts suggest that Minneapolis residents who buy homes now can refinance in a few years and cash in on their expected appreciation.

Using statistics and surveys, analysts predict steady growth in Minneapolis home values. Real estate in the city looks relatively inexpensive to out-of-town investors looking to repeat the gains they made during the recent boom market in the Northeast and Southwest United States.

Minneapolis Real Estate Climbs

While real estate sales in Minneapolis may not fly up the charts the same way that prices in San Francisco and Las Vegas have, mortgage brokers expect Minneapolis home prices to keep rising while appraisals in many American cities show flat or negative movement.

More businesses are either launching in or moving to the Minneapolis metropolitan area, bringing many new workers with them. Other residents choose Minneapolis for its relatively low cost of living and the number of mortgage lenders that actively court new residents.

Minneapolis Residents Prefer Refi to New Mortgages

In an interesting twist, Minneapolis real estate agents find it relatively hard to sell expensive pieces of property in the region. Many homeowners have used refi opportunities to fund renovations to their existing homes instead of bumping up into expensive, new mortgages. To convince home buyers to consider jumbo mortgages, some sellers have resorted to including luxury cars and other amenities with their home purchases.

Minneapolis homeowners can seek out refi deals to convert their adjustable rate mortgages into fixed rate packages. Locking in today's home value at the current mortgage rate can make it easier to tap the increased value of homes in the next few years.

Sources
Arizona Republic
Miami Herald
St. Paul Pioneer Press

About the Author
Joe Taylor Jr. has covered business and finance news for Financial Times Television and CNBC. He coaches beginning mortgage brokers to provide better customer service and to understand creative financing opportunities.