Archive for May, 2012
Comments Off on Minneapolis Duplexes Worth A Little Bit More
With the release yesterday of the first quarter 2012 Case-Shiller Home Price Index, Minneapolis and St Paul duplex sellers got a bit of good news.
The index showed that Minneapolis was one of only seven cities that showed year-over-year price gains for the quarter, up 3.3 percent from the first quarter of 2011.
This jump was second only to Phoenix, which lead the nation with a 6.1 percent increase in value.
It is important to note that nationwide, the average for the nation’s largest 20 cities actually showed a 2.7 percent decline.
While the quarterly data for the Twin Cities looked good, the numbers between February and March told a different story. At that time, Minneapolis reported a .9 percent decline in value.
And it’s important to remember that nationwide, values are down as much as 30 to 50 percent from their peak in 2007.
Earlier in the month, the Minneapolis Area Association of Realtors reported a rise in the median home sales price in April of 12.4 percent. This leap was attributed largely to the decline of low priced bank-owned inventory on the duplex and housing market.
This decline in bank-owned inventory, coupled with a shortage of traditional sellers has lead to the tightest duplex market in years.
Comments Off on Minneapolis Duplex Buyers Find Little To Buy
The story in Minneapolis and St Paul duplex sales continues to be a lack of inventory.
For the week ending May 19, 2012, there were 20 new duplex, triplex and fourplex properties listed for sale. Last year, during the same week, there were 35. In other words, new inventory for the week was down 42 percent, week over week.
However, 55 percent of the market’s new sellers this year are not in a distressed situation, and have equity in their duplexes.
Last year for the week, 34.8 percent of the duplex sellers would have walked away from a closing with cash.
When comparing the two weeks, the number of Minneapolis and St Paul duplex sales remained the same. There were thirteen property owners who accepted offers on their duplexes last year during the week, just as there were this year.
However, a whopping 76.9 percent of the sellers who signed offers this year were not in distressed situations. In other words, they were neither banks, nor did they need to receive permission from one in order to sell.
Last year, just 23 percent of the duplex sellers could say that.
Of course, traditionally owned duplexes typically sell for more than distressed properties. The week’s average off market list price of $149,484 was clearly healthier than last year’s average sold price for the same stretch of $113,873.
It’s starting to look like a very good time to sell.
Comments Off on Minneapolis Duplex Sales Marvel-Ous
Like comic book super heroes, Minneapolis and St Paul duplex sales took off the week ending May 12, 2012.
Thirty-three cape-wearing duplex, triplex and four unit building owners accepted offers during the week; 54.5 percent of which did not need to call the bank for permission.
Compare this to last year’s Clark Kent-ish numbers, when just 25 Minneapolis investment property owners accepted offers; of which a mousey 32 percent were equity owners.
The number of new listings coming onto the market continued to be less heroic, however. There were just 25 new duplex opportunities for buyers, with 68 percent of them brought to market by traditional sellers.
Last year, there were 36 new duplex listings, with 41.6 percent of them being listed with property owners who were not in distressed situations.
This dynamic duo of increased duplex buyer activity and little new inventory ka-p0wed last year’s average sold price for the week of $133,604, finishing at an average off-market list price of $179,588. Granted, odds are when those transactions are finally closed and booked as sold, the average price will likely be about 8 percent less ($165,229.95), but it’s still a dramatic improvement over last year.
The single family home market also experienced a Wonder Woman-like transformation, spinning around to finish the month with a median sales price up 12.1 percent to $162,500.
Meanwhile, for the second week in May, pending sales leaped up 18.9 percent, while new listings dropped 11.8 percent.
This one-two punch further cemented this as a seller’s market, with just 4.7 months of inventory currently available. (A balanced market is when there is a 5-6 month supply.)
While this is all wonderful news for our market-decline crusaders, it’s important to remember no matter the comic, villians have a way of springing back to life.
We’re not at our happy ending yet.
Comments Off on Southwest Minneapolis Duplex Sellers Disappear
It occurred to me this morning I hadn’t seen any duplexes come up for sale in southwest Minneapolis for a while.
I wondered if I was missing something. After all, the area south of Lake Calhoun and around Lake Harriet has a healthy supply of the Craftsman duplexes everybody loves, and it remains a popular place to live.
So I did some digging.
Between January 1 and today, there have been just five southwest Minneapolis duplexes that hit the market.
There were 13 in the same amount of time last year.
And 29 over the first five and a half months of 2005.
I can’t believe there aren’t duplex owners who’d like to sell in that neighborhood any more. I know there are people who want to live there!
Imagine what being the only Linden Hills duplex for sale could do for your asking price.
Comments Off on How Much Would That Duplex Rent For?
One of the things that’s difficult about buying duplex foreclosures is there’s no one there paying rent.
With no established rental income, and usually, no previous owner to ask, how do you determine how much rent the duplex will generate?
I wish I had a complicated, scientific answer. But I’m afraid when it comes to rent, it’s as easy as Craigslist.
Scan the ads. Try to find a unit that’s comparable to the one you either own or are considering in a similar location. Make sure too it’s got comparable utility obligations. In other words, if the landlord pays the heat in one, make sure she does so in the other as well.
If possible, find a unit that has a similar number of bedrooms, also in a duplex.
When you can’t, simply take the number of bedrooms and divide them into the amount of rent being asked. For example, if a two bedroom unit is renting for $900, that’s $450 per bedroom.
Try to see if there’s an average amount in the area; is that what all of the units are renting for per bedroom?
If so, multiply that number by the number of bedrooms in your duplex. For example, in this instance, a three bedroom would probably rent for $1350. Two identical units, then, would generate $2700 a month.
This same practice works to determine whether you’re at market rent for any units you already own.
Sure wish it was more complicated than that. But sometimes, the best ideas are the easy ones.
Comments Off on Minneapolis Duplex Sales Double
Minneapolis and St Paul duplex sales are seeing double.
That’s because twice as many duplexes sold the week ending May 5, 2012 than did the same week one year ago.
And yet, sadly, the number of new listings to the market when comparing the two weeks was roughly the same. There were 25 new investment opportunities last year during the week, while there were just 28 this year.
That’s just three more listings for twice as many buyers.
Of course, demand and supply usually drive price. Just not in this market.
The average price a duplex sold for the first week of May in 2011 was $150,605. This year, the average off market list price was $149,297; a number that will likely be 6-8 percent less when the final sales figures are reported.
Of the owners who accepted purchase agreements for the week, half were traditional sellers with equity in their duplexes. Last year, traditional sellers were responsible for just 36 percent of the sales.
Equity sellers also brough 67.8 percent of the year’s week’s new listings to the market; up from last year’s 48 percent market share.
The number of pending single family home sales was up a whopping 41.9 percent over the same week last year, while there were 6.6 percent less new listings. Combined, this lead to an overall inventory decrease of 28.3 percent.
Comments Off on How To Be In Foreclosure AND Sell Your Minneapolis Duplex For A Profit
If you’re a Minneapolis duplex owner who is losing his investment property to foreclosure, did you may be able to sell it for a profit?
In Minnesota, when a duplex owner is delinquent on mortgage payments, the lender on their property will schedule a sheriff’s sale.
At that sale, which is usually held in the county sheriff’s office, a representative for the bank will, in essence, bid for the right to redeem the mortgage six months later and take control of the duplex.
From that date, the duplex owner has six months to come up the money to pay off, in full, the amount bid at the sheriff’s sale.
Most of the time, that figure is equal to the amount of the mortgage on the property.
Sometimes it’s less.
Why would the bank representative ask for less that what the duplex owner owes?
Because believe it or not, banks are not interested in owning more real estate. This seems especially true if the duplex is located in an area that has experienced a number of foreclosures.
When this happens, the duplex owner may, in essence, sell either pay that amount, or sell their rights to redeem the loan.
Failure to do so means the first lien holder (usally the bank with the first mortgage) is next in line, followed by the second mortgage holder (if there is one) and anybody holding any other kind of lien on the property.
And if that duplex owner happens to sell the property for more than the amount that was bid at the sheriff’s sale, he or she is entitled to pocket the difference (less any additional penalites, interest, fees and commissions).
For some duplex owners there’s an even better outcome. Many buyers are willing to let them stay on as tenants.
For many distressed duplex owners, this is the happy ending they’ve been hoping for.
Comments Off on Calling All Minneapolis Duplex Sellers: We Need Your Help
There are hardly any Minneapolis duplexes for sale, and that has created something of a feeding frenzy.
Last week, I had several buyers write offers on properties. In one instance, for $10,000 above the asking price, and all cash. The other was almost $30,000 above the asking price, using financing.
Neither buyer got the property they wanted.
Recent news about the housing market has been optimistic; fewer people are falling behind on their mortgages, and, in February, home prices were up .2 percent nationally.
The latter is largely due to a lack of inventory caused by the banks 11 month hiatus on foreclosures, and traditional sellers holding
After all, when supply exceeds demand, prices go up.
So will we be back at 2005-2006 prices next month or next year?
Buyers are still looking for value. This means either a duplex in exceptional condition or one that’s an incredible deal. Overpriced inventory continues to linger on the market, just as it always has.
This week alone over 200 property owners in Hennepin and Ramsey counties received notices of default, which are the first step in the foreclosure process.
Barring any delays, the banks will repossess those properties 7 months from now.
If you’re thinking of selling your Minneapolis duplex, the time is now.
Please get in touch with me.
Comments Off on Keller Williams Gets Out The Red
No matter where you live, you may have seen a bunch of Keller Williams agents in red shirts today.
That’s because it’s Red Day.
Red Day is always on May 10. It serves two purposes.
First, it’s because it’s our Vice Chairman Mo Anderson’s birthday. Mo is big on giving back to the communities in which we live.
And that’s the second reason for Red Day.
Today, for example, all the Realtors in my office, Keller Williams Realty Integrity Edina, went to a local park to weed, trim back brush, and mulch.
It seems budget cuts have meant there simply isn’t the money in the community to maintain our public spaces the way we once did.
Other offices are doing things like canned food drives, or painting homes for senior citizens.
If you see us, feel free to wave.
We aren’t hard to spot. After all, we’re all wearing red.
Comments Off on Minneapolis Duplex Sales Shift Gears
Minneapolis and St Paul duplex sales moved from second to third gear the week ending April 28, 2012.
Nowhere is this more evident than in the market share of short sale and bank owned properties vs. that brought to the market by traditional sellers.
Of the 19 owners who accepted purchase agreements, 52.6 percent were equity sellers. Of the 41 new listings that came on the market, a whopping 78 percent of them have equity in their duplexes.
Compare this to the same week in 2011, when just 40.6 percent of the 32 sellers new to the market did not need to receive permission from a bank to sell. Perhaps even more dramatically, of those duplexes that sold in that week, 80 percent were bank owned or negotiated.
Of course, this shift toward traditional sellers is most likely the result of the five major banks 11 month long moratorium on foreclosures. Case in point, this morning alone 82 Twin Cities property owners received notices of default; the first major step in the foreclosure process.
Single family home sales saw their new listings decrease by 14.9 percent, while their number of pending sales increased 21.4 percent.
Increased demand coupled with decreasing supply resulted in a 7.1 percent price increase in March, to a median of $149,900.
This increase has not applied to the duplex market however, where the average off market and sales price continue to be within one to two percent of their averages for last year.
The road ahead promises to be interesting.