Appreciation rates are AVERAGES of all the home sales in an area. Not every home in a neighborhood appropriates at the same rate. Some homes appreciate better than the average and some worse. Be sure you (and your REALTOR) know what type of home commands the highest prices in the neighborhood, and look at the price per sq. ft. of similar homes sold to be sure you're getting a good value. In today's market you'll find homes that are being offered for far less than they sold for a short time ago, or have been appraised for more than their price. That does not necessarily mean it's a good value.
As for schools, Bettie's right, and add to that taxes. Edina has a strong real estate market because it's widely know for low tax rates, good schools and safety.
As for the suburbs, I'd strongly suggest that you look in the "best" neighborhoods close into the city (first ring suburbs are fine). The demand for short commutes and "neighborhood villages" is very strong, and will not be going away anytime soon. There are suburbs that are doing well, today, like Eden Prairie, and Maple Grove, but that can change rapidly. Woodburry for example went from being very strong to ice cold in just a few short years.
Ok enough - gotta get back to work now ;-)
Many agents below have tried to give you very helpful suggestions but unless we know more of your situation and what you are looking for it is hard to give specific advice.
Do you like old or new?
How close to work do you want to be?
Where is work?
Urban or suburban feel?
There are MANY communities that are quite stable and yet differ greatly. Answers to these questions will help me give you a more specific answer. In 4 years I expect most communities to be at or above today's prices.
That is a difficult question because no one has a crystal ball to see the future. However, from what I've seen, the more foreclosures an area has, the lower the prices have fallen. Stability in values is directly relative to the influx of inventory. As inventory grows above historic "normal" levels, prices fall and visa versa. The inventory has increased drastically in many areas due to the increase in foreclosures. If you'd like a list of areas that are least affected by foreclosures let me know and I can direct you to it.
There are some really great websites for home buyers to do their own research on which areas in the Twin Cities Metro should retain their value. Of course this would be based on past sales data. I dont really like to speculate on future values, but doing research to see which areas over time have sustained their values is the best exercise you can do to predict what the home would be worth at the end of your stay.
Check out http://www.mplsrealtor.com/market.aspx and take a look at this report:
What you will see is a 7 year history on the communities in and around the Minneapolis/St. Paul Metro Area.
I can tell you that without question, the best performing community over the past 7 years has been Edina, MN
And if you are interested in seeing homes priced between $300 and $400K in Edina, see the links below...
Lastly, and this is a plug for my Real Estate Firm - take a look at our Home Buyer Rebate Program on our Website under How Buyers Save: http://www.webdigs.com/do/How+Buyers+Save
When you buy a home with a Webdigs.com Agent, you get up to a 50% rebate on our commission after closing. Based on a purchase price of $400,000 that rebate could be anywhere from $4,725 to $6,000 depending on what the Buyer's Agent Commission is. For more information, please feel free to call me directly at 612-767-5191 or send me an email.
Good Luck with your search.
Tom Meckey, Broker
I'd say your decision will be dependent on whether or not you wish to live IN Minneapolis or in the suburbs. We have several first ring suburbs that will provide you with easy and minimal travel time to get in and out of Minneapolis itself. There have been some areas that have been hit less hard with foreclosures than others. For example, Southwest Minneapolis is less impacted as are some of the Western Suburbs, like Plymouth, Maple Grove, Golden Valley (some parts) Edina and others. Please see my blog where I write regularly about Minneapolis life, Minneapolis cities of the Western Suburbs, community events and more.
It will also be a good idea for you to have an agent that can speak to many different areas. Please let me know if you'd like some reports about the market information here so you can look at trends.
Of course, I think it would be imprudent to make any predictions about where any area will be in 4 years. I don't think anybody could have looked ahead in 2005 to see where we are today. The ultimate decision will be yours.
I'd suggest Edina, Southwest Mpls, and St. Louis Park first off. There are a number of different neighborhoods to consider (East or West Edina, Cornelia, Country Club, Highlands, Linden Hills, Fulton, Armatage, Lynnhurst, Browndale, Mourningside, etc...)
Some are going to be beyond your price range, others are not and it's on these borders where you'll stand to make some money in the short run. It's all about land value in your case. The right home, on the right block will see very strong appreciation through rising land values as more affluent homes are developed in the area. We're seeing lots of remodeling and tear downs as people flock into "nice" neighborhoods closer into the city, it's within these areas that development clusters pop up.
Let me know what kind of a home and neighborhood you're interested in and I'll try to give you a better idea of where to look.
Good Luck! and Welcome to MN!
Ben Kolkman - Realtor, Lakes Sotheby's International Realty