Archive for February, 2014
Comments Off on Minneapolis Duplex Prices Rise
If you were a Twin Cities duplex owner thinking about selling, there’s likely one category of real estate activity you’re most concerned about: price.
The good news for Minneapolis and St Paul duplex sellers is exactly that: prices are up. In fact, for the week ending February 15, 2014, the final list price for a duplex, triplex or fourplex listed on the MLS whose owner accepted an offer was $225,306. This demolishes the average sold price for the same week last year, when sellers realized an average price of $154,827.
The news wasn’t as encouraging in the rest of the categories. Just 17 sellers accepted offers for the week this year; that’s down two from 2013.
New listings were down as well, tallying 16 new opportunities for buyers to choose from, compared with 19 last year. Of these 16 new listings, 75 percent are being sold by people with equity. This represents a slight uptick from the 73.7 percent of last year’s sellers who had equity when they listed their property for sale.
Single family homes sales saw similar drops. New listings were down 2.9 percent, pending sales down 8.4 percent, and overall, there was 9.7 percent less inventory available to buy than there was last year.
And it’s exactly this shortage of available properties that has caused prices to rise.
Comments Off on Duplex Owners Enjoy The Sun
It may be the coldest winter in memory, but most Minneapolis and St Paul duplex landlords are extraordinarily sunny when I speak with them.
And why not? After all, vacancy rates and interest rates are extraordinarily low, meaning rents are high and the cash flow is terrific.
The one thing many of them forget is what goes down, must go up.
No, I didn’t get that backwards.
Vacancy rates are not a constant. At some point, the economy will rebound. And when that happens, many tenants will decide to become homeowners.
This will force vacancy rates up, which will cause things like concessions to attract tenants (think first month free), and lower rent.
As the economy improves, we are also likely to see the Federal Reserve raise interest rates in an effort to slow inflation. This will reduce the affordability of many income properties, as well as reduce cash flow.
With smaller returns, investors will begin to leave the marketplace. And as demand for investment properties slows, prices with rise less aggressively, and may even decline somewhat.
Let’s hope warm sunny days are in all of our futures. But it’s always wise to bring an umbrella.
Comments Off on Minneapolis Duplex Sellers Race For Gold
Right now, the Minneapolis duplex market is a little bit like buying your way on to a winter Olympic team for a country that doesn’t have any snow.
There just aren’t a lot of duplexes, triplexes, and fourplexes out there competing for buyers attention right now. There’s a complete lack of competitors for those slots; which is a little like the Dominican cross country skiing team.
For the week ending February 1, 2014, there were just 5 new Twin Cities MLS small multifamily property listings. Sixty percent of these new listings were brought to the market by equity sellers.
One year ago during the same week, there were 18 new listings. Sixty-six percent of these sellers had equity in their properties.
Pending sales also took a bit of a spill in the snow the last week of January, 2014. There were 12 sellers who accepted offers during the week. Half of them have equity in their properties. On average, the final list price those properties left the market at was $168,267, with the.
Last year, there were 17 duplex sellers who accepted offers on their properties. Of these, 71 percent left the closing with money in their hand. On average, these properties sold for $170,980.
The week also saw fewer single family home sellers competing for sold medals, with 16,9 percent fewer new listings coming on to the market. Even though there was also 9.3 percent fewer pending sales for the week, overall inventory was down 9.1 percent from the last week in January in 2013.
As temperatures begin to thaw, watch for many more competitors vying to win the buyer’s dollar.
said on February 7th, 2014 categorized under: Tenants
Comments Off on Don’t Be Afraid To Put Tenants Out In The Cold
There are a lot of misconceptions about investment property ownership in Minnesota.
The two that I hear most often, however, are that a landlord must give a tenant 24 hours notice before entering their unit, and a tenant cannot be evicted in the winter for non-payment of rent.
It is easy to trace the origins of the latter. In Minnesota, the Cold Weather Rule applies to utilities. While it does not prohibit companies from shutting off a customer’s utilities for non-payment, they must reconnect any customer whose household income is at or below 60 percent of the state median income. (Governor Dayton increased the percentage from 50 to 60 percent on February 4, 2014.)
This law requires utility companies to be willing to enter in to payment plans with tenants.
It does not, however, apply to rent whatsoever.
As human beings, the thought of putting someone out in sub-zero temperatures is difficult for many of us. Sometimes tenants take advantage of that; going all winter without paying rent.
Remember, we are running a business; one many of us hope will fund our retirement. A business can only suffer losses for so long, or it ceases to exist.
Of course, if you live somewhere other than Minnesota, be sure to check your local laws and regulations regarding winter evictions.
Comments Off on Duplex Sales Temperature Hits Single Digits
Minneapolis and St Paul duplex sales stayed in the deep freeze the week ending January 25, 2014.
There were just 8 duplex sellers who accepted offers during the week. All but three of these involved a bank in the negotiations. The good news is these properties left the market at an average list price of $211,594.
Last year by comparison, there were 18 duplexes that sold. Just eight of these belonged to traditional sellers, who left the closing with a check in their pocket. On average, these properties sold for $150,093.
While double digit wind chills may have dissuaded some duplex buyers from looking at property, the same could not be said for sellers. There were 14 new small multifamily property listings during the week. Seventy-one percent of these folks will not require bank permission in order to sell.
In late January of 2013, on the other hand, there were 17 new listings to the market. Of these, just six, or 35 percent belonged to equity sellers.
The single family home market experienced a bit of hibernation as well. The number of new listings dropped 11.9 percent compared with the same week last year, pending sales declined 13 percent, and in all, there were 8.6 percent fewer homes on the market for buyers to choose from.
At this point, it’s probably fair to say we’re all ready for spring.