Archive for August, 2012
Comments Off on Minneapolis Duplex Sales Slow
Minneapolis and St Paul duplex sales were down for the week ending August 17, 2012. There were 19 duplex owners who received and accepted purchase agreements.
During the same week last year there were 25 duplex sellers who accepted offers.
While the number of sellers might be down, it’s important to note of this year’s 19, 32 percent were traditional sellers with equity in their properties. Last year, just 20 percent of the sellers were in equally good positions.
On average, duplexes moved from the “for sale” to “pending sale” at a list price of $126,240. While this is up over the average sold price of $114,120 for the week in 2011, it’s important to keep in mind that listings often sell for less than the seller was asking.
There were 26 new duplex, triplex and four unit listing to choose from during the week. Of these, 58 percent were brought to the market by equity sellers.
While this number is below the 30 that came on the market last year, just 53 percent of those sellers had equity in their duplexes.
The single family home market continued to see declines in new listings (-3.5 percent), dramatic increases in pending sales (25.2 percent) and total inventory declines (29.8 percent).
Let’s hope these trends continue as we wind down summer and head toward the slowdown of fall.
Comments Off on Real Estate Investors Drive Market Recovery
Last week, the real estate analysis company John Burns Real Estate Consulting released a report that indicated investors might be the reason behind the housing recovery.
When analyzing 167 metro areas, the firm noted that 29.6 percent of all transactions were a result of investors. This was up from a low of a 23.6 percent market share at the end of 2009.
Markets most decimated by the housing crisis like Las Vegas (50 percent) and Phoenix (46 percent) are now actually dominated by investor buyers.
Most of the investors are purchasing with cash at the low end of the spectrum. According to senior research analyst Erik Franks, “They are helping the market recover by removing the supply at the low end of the market and driving real buyers to higher price points, including new homes.”
Comments Off on Be Happy: Hire A Keller Williams Duplex Agent
If you’re thinking of buying or selling a Minneapolis or St Paul duplex, and want to be satisfied with the experience, you may want to hire a Keller Williams Realty agent.
According to the just released J.D. Power and Associates 2012 Home Buyer/Seller Satisfaction study, Keller Williams ranks highest in customer satisfaction in both the buyer and seller segments.
The study found Keller Williams also earned the highest scores in all the factors considered in calculating satisfaction. When it came to buying property, those included the agent, office, and additional services. Sellers were asked also about their experience with the agent, office, additional services and marketing.
Power’s study also found that the highest performing real estate companies are better at getting a higher percentage of the list price for their sellers.
So if you want to sell your Minneapolis duplex for as much as possible AND be happy, contact the Duplex Chick– she happens to be a Keller Williams agent!
Comments Off on Minneapolis Duplex Sellers Love 2012
What a difference a year makes in the Minneapolis duplex market.
In the second week of August, 2011, there were 24 duplex owners who accepted purchase agreements on their properties. Of these, just 7, or 29.2 percent, had enough equity that they didn’t have to consult with a bank before selling.
During the same week this year, there were 19 Minneapolis duplex, triplex and four unit sellers who accepted purchase agreements. Of these, a whopping 14, or 73.7 percent were sellers who will walk away from the sale with money in their pockets.
Of course, traditional sellers seem to lead to higher average off-market prices, and the week was no exception. While last year’s duplexes sold at an average of just $122,705 for the week, this year’s left the market at an average list price of $208,658.
While there continued to be a lack of new inventory on the market, that which did appear as a new listing was largely the result of a traditional seller. Of the 24 new listings, 16 or 66.7 percent were offered for sale by owners with equity.
Last year, just 12 of the 38 new listings, or 31.6 percent of them, did not involve a short sale or foreclosure.
In the single family home market, the number of new listings declined 2 percent while the number of pending sales increased 31.2 percent over last year.
In all, there is just a 4.3 month supply of inventory, meaning it’s a seller’s market.
And to think it was just one year ago when Minneapolis duplex buyers had the final say.
Comments Off on What Does Multifamily Mean Anyway?
Sometimes I’m guilty of getting so caught up in the details of buying, selling and investing in Minneapolis and St Paul duplexes, that I overlook the obvious.
I don’t think I’ve ever stopped to define or explain the term “multifamily”.
Multifamily properties include duplexes, triplexes and apartment buildings with four or more units.
Logic dictates that condominium buildings and townhouse developments should be considered multifamily properties as well. However, they actually fall under the category of single family homes.
The answer lies in the fine print.
Even though more than one family lives in those units, the difference lies in each property’s identification number with the county. Townhomes and condominiums each have their own property identification number so they may be sold individually. And when someone buys that unit, that identification number follows the unit from one owner to another.
Townhouse developments have as many property identification numbers as there are owners.
And while multifamily properties may have just as many residents as a townhouse complex, there is only one property identification number, and one owner, making it a single property with multiple families living there.
Comments Off on Time To Welcome Home Minneapolis Duplex Sellers
It’s time to plan a welcome home party for traditional Minneapolis and St Paul duplex sellers.
After all, for the week ending August 4, 2012, they provided 74.2 percent of the new duplex, triplex, and four unit listings to hit the market. Put simply, only one out of every four new listings was either a foreclosure or short sale.
For the same week the year before, traditional sellers provided just 51.6 percent of the market’s new listings.
There were 16 duplex sellers who accepted offers on their properties during the same week. It would stand to reason that a fair amount of them had equity in their properties, and yet, just 31.3 percent of them did.
This figure isn’t too far off from the 35 percent of the 20 duplex sellers who accepted offers on properties one year ago, in which they had equity.
All of this comes amidst the news that the latest statistics for the single family home market saw a 14.3 percent in crease in the Twin Cities median sales price, to $179,950.
Pending homes sales were up 24.3 percent in July over last year, while closed sales were up 14.6 percent.
Overall inventory of homes for sale is down 30.9 percent. Of course, when there are fewer homes for sale, those that are on the market get snapped up faster. In today’s market, on average, it takes 106 days to sell. Last year took 146 days.
Let’s hope the party continues.
Comments Off on Apartments Vs. Duplexes: Which Is Worth More?
When it comes to determining value, what’s the difference between an apartment building and a duplex?
The value and ability to finance an apartment value is determined by how much revenue the property generates, what the expenses are, and its cash flow.
While rental income and expenses certainly pay a part in a value of a duplex, values are also influenced by location and comparable properties that have sold.
For example, a six bedroom duplex on the west side of Lake Harriet recently sold for $435,000. The units were not rented, but likely have a market rent of somewhere around $1500 a month.
As annual figure, times two units, leaves the property with annual gross income of $36,000.
Meanwhile, a side by side duplex with three bedrooms in each unit recently sold in the Kenny neighborhood for $180,000. It should generate the same amount in rent and expenses.
If cash flow is what’s most valuable, clearly the second property would be the better investment.
However, when it comes to duplexes in the Twin Cities, a vast population of them are located in neighborhoods with sought-after ammenities appealing to owner occupants; things like walking trails, shops and restaurants.
Duplexes aren’t as expensive for owner occupants as buying a comparable single family home. As a result, if a buyer wants to live in a specific area, but the payments on a single family home would be uncomfortable, a duplex is an affordable option.
Making the idea of duplex ownership even more attractive are the easy down payment options; after all, you only need 3.5 percent down. An apartment building, on the other hand, usually needs a 20 or 25 percent down payment.
The relative ease of financing, coupled with higher demand for duplexes, often pushes their values up to a point where they no longer cash flow.
Meanwhile, banks that will lend money on apartment buildings that don’t cash flow are few and far between.
Comments Off on Minneapolis Duplex Sales Like A Chocolate Shortage
If a store sells 15 candy bars a day, but stocks just 5 more every night, how long will it take before it runs out of candy bars to sell?
That isn’t meant to sound like an 8th grade math problem (though it does). Funny thing is, that’s just like the Minneapolis and St Paul duplex market.
Last year during the last week of July, there were 23 duplex owners who accepted offers on their properties. Of these, 11 didn’t have to get permission from a bank to do so.
This year, there were 24 duplex owners who signed purchase agreements. Twelve of these investment property sellers did not need to consult with a bank before selling.
One year ago, however, the shelves were replenished with 33 new duplex listings. Eleven of these were brought to the market by sellers with equity.
Compare that to the paltry 19 new duplex listings the week ending July 28th. Of these, 12 are being sold by traditional sellers. That’s a market share of 63 percent.
The situation isn’t much better in the single family home sector, where pending home sales increased 20.9 percent over the same week last year. And while inventory remains tight in that niche as well, new listings were nonetheless up 8.3 percent.
If you’re thinking about selling your Minneapolis duplex, it’s a great time to do so.
After all, what would your duplex be worth if it were the only candy bar left in town?
Comments Off on How Saving On Your Minneapolis Duplex Gets Expensive
Have you ever tried to save a little and had it end up costing a lot?
For example, if you’re thinking of selling your Minneapolis duplex, and just don’t want to put another dime, let alone hundreds or thousands of dollars into it.
So, you don’t paint. Or, you don’t fix the rotted soffit, or even make sure you have carbon monoxide detectors in the hallways outside bedrooms.
And then you decide to sell, putting it on the market as is, figuring the buyers can take it or leave it.
The trouble with that thinking is what might in reality have only cost a few hundred dollars to repair, becomes thousands in a buyer’s mind.
Take, for example, a water heater. You may be able to pick one up at your local home improvement store for several hundred dollars. And, you might have a plumber friend who’ll install it for you after hours for not that much money.
However, if you leave it to the buyer, here’s what happens.
The buyer hires a home inspector, who sees the water heater leaking on the floor. As he or she is supposed to do, she recognizes it needs to be replaced, and, according to city or state building code, that repair must be done with a permit and by a licensed plumber.
In reality, the cost of having this done probably won’t be much different than if you’d done it before listing your duplex for sale.
But in the buyer’s mind, (especially a first time buyer), the words “licensed” and “permit” suggest expensive, doubling or even tripling their perception of the cost.
To offset this, they ask their Realtor to reduce their offer by several thousand dollars.
Which means you’re back to either fixing it anyway, or reducing your sales price.
Might as well have done it the first time.