Archive for December, 2012
Comments Off on Duplex Sellers Open Presents Early
I have to tell you, it’s hard to sit down and blog with all of the holiday festivities.
The season hasn’t seemed to slow Minneapolis duplex, triplex and fourplex sellers and buyers though.
For the week ending December 8, 28 multifamily property owners received and accepted purchase agreements on their properties. Of them, just 28.6 percent were traditional sellers. As a result, the average list price the duplex left the market at was just $130,150.
During the same week last year, just 13 Minneapolis and St Paul investment property sellers accepted offers. Of these, 30.8 percent did not have to consult with a bank in order to sell. Those sellers realized an average sold price of $108,240.
Duplex sellers made buyers happy by putting a whopping 31 new listings on the market. The vast majority of these listings, 61.3 percent to be exact, belonged to sellers with equity.
This trounces the number of new listings during the same week last year, when there just 24 hot new duplex listings to choose from.
Like the small multifamily market, the single family home market saw a slight increase in new listings, up 3 percent to 942 for the week. Pending sales also rose 12.6 percent, with overall inventory down 28.8 percent.
Let’s hope Santa brings continued good news for Minneapolis duplex sellers and buyers.
Comments Off on Why Buyers And Sellers Are Happy With Higher Duplex Prices
What’s one of the best but least discussed reasons it’s a great time to buy or sell a Minneapolis duplex?
Perhaps we’ve all become a little numb to the news that interest rates are at historic lows. After all, it’s been in the headlines for years.
Let me explain why it matters.
Six months ago, interest rates for duplex investors hovered around 6 percent.
I met with a number of duplex owners who wanted to sell, but when I calculated investment property analysis worksheets to help determine value, the sellers and I quickly realized it didn’t make financial sense either to them or duplex investors active in today’s market.
I have been calling many of those same people in the last two months. Why? Because a reduction of 2 percent in interest rates suddenly makes their property incredibly attractive to buyers.
Each percentage in interest is the annual equivalent of one percent of the mortgage amount. So, on a $200,000 loan, that’s a savings of $4000 a year.
That not only helps many duplexes provide a terrific return on investment, it also allows buyers afford a higher market price, which is better for sellers.
In other words, as long as interest rates remain low, everybody wins.
Comments Off on Duplex Sellers Top Santa’s “Nice” List
The holiday season has Minneapolis duplex sellers feeling like Santa’s favorites.
After all, for the week ending December 1, 2012, the average final list price pending sales of Minneapolis and St Paul duplexes, triplexes and four unit buildings at was $46,796 higher than similar properties sold for one year ago.
Granted, on average, Twin Cities real estate sellers are receiving 94.3 percent of their list price, so that number will be down some when sales close.
Nonetheless, it is great news for duplex sellers.
Most of these sellers, 57.1 percent of them to be exact, are traditional sellers with equity in their properties. This is up from the 42.9 percent who could say the same during the week in 2011.
This trend promises to continue, as new listings continue to be as scarce as a Master-Moves Mickey. There were just 22 new listings for the week; down three from the count last year. Of these new investment opportunities, 40.9 percent were brought to the market by traditional sellers. This is a leap from the 28 percent who did so last year.
Single family home sellers also experienced a holiday rush as pending sales rose 18.6 percent for the week. In all, there are 29 percent fewer homes on the market than one year ago.
The .7 percent increase in new listings for the week offered some hope for home buyers, but clearly not enough to loosen what continues to be a tight supply of inventory.
This leaves Minneapolis duplex shoppers little choice but to ask Santa for more inventory.
Comments Off on Distressed Duplex Owners Face Fiscal Cliff
In the coming weeks, amidst the media noise about the “fiscal cliff”, duplex owners who are either struggling to pay their mortgage or behind on payments need to listen closely for one piece of news: has the Mortgage Deft Forgiveness Debt Relief Act been extended another year?
The act, which was passed in 2007, prevented distressed duplex owners who occupied their property from paying some taxes on the amount of debt forgiven on a short sale, loan modification or principal reduction. It is set to expire at the end of this year.
Without an extension, these struggling duplex owners may be required to pay income tax on the amount of their loan that was forgiven.
It’s important to note that duplex investors who never occupied their properties, may or may not face tax consequences for debt forvieness. Each case is unique, and largely contingent upon how taxes were filed during ownership of the investment property. Individual investors should consult their tax professional for guidance.
The non-profit group the Center for Responsible Lending, and the Financial Services Roundtable, which includes representatives from the country’s biggest banks are working together to ask Congress to extend the Mortgage Debt Relief Act.
Housing is starting to recover. However, both groups are concerned this fragile rebound will suffer without an extension.
You can help. Write or call your Congressperson and Senators to ask them to act.