Archive for September, 2014
Comments Off on Why I Won’t Show You A Duplex Until I’ve Met You
Missing Arkansas Realtor Beverly Carter
While I’ve blogged about this topic before, last week’s news was a great reminder why no Realtor should ever meet someone at a property, simply because he or she called.
Arkansas Realtor Beverly Carter went to show a home, and has been missing ever since.
I don’t know the circumstances that lead Ms. Carter to show the property. However, this sort of thing seems to happen to a handful of Realtors every year.
Think about it. Someone calls a Realtor about a sign in front of a property which, if not totally vacant, will be when the sellers leave for the showing. And the caller, a total stranger whom the agent has likely never met, expects he or she to drop whatever tasks are at hand to meet them there and show the house or duplex.
The caller often offers the Realtor no proof that he or she can afford the property through either a bank pre-approval letter, or, in the case of cash, proof of funds.
In fact, I had a call exactly like that over the weekend. The caller alleged he had cash, but wasn’t willing to provide proof. When I asked him to meet me at my office first, he was resistant. So I politely ended the call as quickly as I could.
I truly believe the vast majority of people are good at heart, and I would be just fine showing them a property. But it’s always those few lone individuals we hear about in the news who make all of our lives more difficult.
And frankly, no real estate transaction is worth my life.
Comments Off on Minneapolis Duplex Sales Become Predicatble
Sometimes, the news in the Minneapolis and St Paul duplex market just isn’t very exciting.
Take, for instance, the week ending September 13. In many ways, it was almost exactly like the same week last year.
There were 42 new listings for the week, 83.3 percent of them were brought to the market by traditional sellers. Last year, there were 40 new investment opportunities. At 90 percent, almost all of these were offered by equity sellers.
The one area where there was a slight difference in the week over week numbers was in the number of pending sales. For the second week of September 2014, 18 Twin Cities duplex, triplex and fourplex sellers received and accepted offers on their properties. At 93.3 percent, most were equity sellers. This is also reflected in the average off-market list price, which was a healthy $234,428.
Last year for the week, there were just 10 sellers who accepted offers on their multifamily properties. While 90 percent of them were equity sellers, on average, they sold for $211,709. Once closed, this year’s sellers should fare slightly better on average.
Meanwhile, Pending Sales of Twin Cities single family homes declined 1 percent for the week. Meanwhile, the number of new listings was 1.6 percent higher than one year ago. These factors helped contribute to a year-over-year total market inventory increase of 9.5 percent.
As we ease our way deeper into fall, perhaps even and predictable is a great place to be.
said on September 22nd, 2014 categorized under: Legislation
Comments Off on Minneapolis May Allow Grandma To Live In The Garage
Granny flats. Mother-in-law apartments. Non-conforming units.
We’ve all seen them. Many of us have either thought about adding them or gone ahead and done so without addressing the city’s required rezoning requirements. After all, the hurdles a property owner must clear to change a duplex to a triplex, for example, can require almost an entire neighborhood to agree to the plan, as well as bringing the whole property up to current building code.
And yet, the need for housing in the Twin Cities has become so great that the city of Minneapolis is actually discussing an amendment to current zoning code that would establish regulations for Additional Dwelling Units (ADUs) and permit them throughout the city.
According to Minneapolis, an ADU is a self-contained living unit that may be within the walls of an existing property, an addition to the building, or a freestanding structure like a carriage house or garage conversion.
Allowing these units would provide benefits like allowing seniors to live near relatives, improve housing affordability, accommodate growth without disturbing a neighborhood’s character, improve walkability, diversify housing stock and generate income for homeowners.
The city of Minneapolis plans to put a draft of this amendment to the City Planning Commission and City Council sometime this fall.
St. Paul is considering similar changes.
In the last few decades, cities like Denver, Seattle and Portland have already changed standards in order to allow ADUs. Locally, cities like Bloomington, Plymouth, Faribault, Minnetonka and Long Lake have already done so.
Stay tuned for how this plays out.
Comments Off on Minneapolis Duplex Sellers Come Out In Numbers
The biggest news in the Minneapolis and St Paul duplex market for the week ending September 6, 2014 is the absolutely robust number of new listings that came on the market.
A shopping 33 new duplex, triplex and fourplex properties appeared on the MLS as new listings. This represents a 42.4 percent increase over the number of new listings that came on the market last year.
Of the sellers who put their properties on the market, 93.9 percent will not have to negotiate with a bank in order to agree to the terms in a purchase agreement. Ironically, this is down ever so slightly from the 94.7 percent of last year’s 19 sellers who could say the same.
There was almost as good of news on the pending sales front. There were 20 owners who accepted offers during the week, 85 percent of whom have equity in their properties. The average off market list price for these duplexes was $221,292.
Last year, there were 16 sellers who accepted offers. And while it’s still market share, just 75 percent of those folks did not have to negotiate with a bank in order to sell. Ironically, the 2013 sellers managed to average $236,342 as a final sales price; a number higher than the average list price for the group this year. Going forward, let’s hope this doesn’t become a pattern.
In the single family market, new listings were up 9 percent for the week. Pending sales took a small step forward, up 1.4 percent over last year. However, overall inventory was up 9.7 percent.
This resulted in the average number of days on the market rising 2.9 percent in August 2.9 percent to 68, as well as the Months Supply of Inventory climbing to 4.4 percent. A market is considered balanced between buyers and sellers when there is a 5 month supply of inventory.
Anything more and it once again becomes a buyer’s market.
Comments Off on Minneapolis Buyers Urgently Need Duplexes!
If you’re even kinda sorta thinking about selling your Minneapolis or St Paul duplex, I sure could use your help.
I currently have two sets of buyers facing rapidly approaching deadlines to buy a duplex.
The first, David and Gale, are empty nesters who are downsizing from the family home. They are looking for something with at least one three bedroom unit, or a two bedroom unit and either a mother-in-law apartment (non-conforming is ok) or a space they could finish. She works from home, and needs a space to set up shop.
They are looking anywhere from the western suburbs to Cathedral Hill. As they’ve had a more suburban lifestyle due to children, they are now seeking a more walkable location. They are not opposed to some work, but would prefer a property that’s had essential maintenance done.
While like everyone they would prefer to spend less, for the right property they’re willing to go to the mid $400’s. And yes, we’ve seen everything currently on the market.
My second buyer is a seasoned investor who is selling a portion of his portfolio in order to own properties a little closer to home. Home is the south metro, so anything from the Mississippi River to St. Louis Park will do. In the next six weeks he needs to find between four and eight replacement duplexes, triplexes or apartment buildings to do a 1031 exchange into.
You don’t have to be either completely ready or decided to sell. We can do a “One Time Showing Contract”, which means you’d sell if a specific individual wanted to buy your property at a pre-determined price. If that doesn’t happen, life goes on, just as it did before.
Call or email me at the number at the top right of the page. It could be the easiest property sale you’ve ever made!
Comments Off on Signs Of Fall In The Minneapolis Duplex Market
If you look carefully, you will start to see signs of fall. Some of the leaves have a subtle change in tint, and the air has a different smell and feel to it than it did one month ago.
There are similar small, almost invisible signs of change in the Minneapolis and St Paul duplex market as well.
There are currently 589 active duplex, triplex and fourplex listings on the Multiple Listing Service. While this sounds relatively small, it’s important to note this represents nearly a seven percent increase in inventory from August of last year.
In fact, for the week ending August 30, 2014, there was an 11 percent increase in the number of new multifamily listings on the market in the metro than the same week in 2013. The vast majority, at 92.8 percent, are owners who will not have to consult a bank to receive permission to sell. Last year, just 68 percent of the new sellers could say the same.
Of those sellers who accepted offers, 73 percent were traditional, equity sellers. While this market share is lower than it has been over the summer, it still represents a significant increase from the 57 percent of new sellers in 2013. The average final list price for these properties was a whopping $266,233; up significantly for the average sold price for the week in 2013 of $178,989.
On average, 2014 sellers are accepting offers at 94.3 percent of their initial list price. The median list price for sold multifamily properties to date in 2014 is $174,900. Last year, sellers were accepting offers at, on average, 100 percent of their median price of $155,000.
Perhaps the biggest sign of an impending change is we currently have a six month supply of inventory on the market. What this means is if there was no new inventory for buyers to choose from, it would take six months for the current buyers who are looking to absorb everything that’s for sale. One year ago, there was a five month supply.
It’s important to note a real estate market is considered balanced when there’s a five to six month supply. In other words, neither the buyer nor the seller is in the driver’s seat.
And that’s a long way from where we’ve been.
said on September 8th, 2014 categorized under: Financing
Comments Off on Why Your Duplex Appraisal May Not Be Good
I saw a terrible duplex appraisal the other day.
Not only did it calculate value based on finished square feet (which has nothing to do with duplex value), but it also included sales of comparable properties from not only a different neighborhood, but a different city entirely.
The appraiser defended herself by saying there weren’t enough sales of multifamily properties in the immediate area to determine value.
The trouble with this method of valuation is it caused the price of the property to top all of those that had actually sold in the immediate area by more than $100,000.
This appraisal was solicited and paid for by the sellers before they put the duplex on the market. Of course, this caused them to have a skewed perception of value.
While an appraiser is licensed by the state, that license does not necessarily mean they are competent when it comes to determining value of all kinds of properties. Many appraisers focus heavily on single family homes, and as a result, bring their understanding of those properties to the process.
Thanks to tighter bank regulations, loan officers, buyers agents and Realtors no longer have any influence over which appraiser is sent to a property. Banks have to go to an independent third party to obtain an appraisal, who then draws the appraiser from a pool. The appraiser may or may not working in the area of the property that’s been assigned, or have extensive experience in the type of property.
Whether you’re considering refinancing, buying, or just trying to determine the value of your own multifamily property, it’s important to take a close look at it. If it seems unusually high or suspiciously low, you may want to examine it more carefully.
And if you’re not exactly sure what you’re looking at when you review the appraisal (it can be confusing), contact your local Realtor who specializes in duplexes, triplexes and fourplexes. We will be happy to help you understand, and in the case of an off appraisal, provide you accurate and truly comparable sales information to prove your case.
Comments Off on Minneapolis Duplex Market Evokes Chicken Little
Sometimes things that happen in the span of a single week in the Minneapolis and St Paul duplex market could cause a person to shout the sky is falling.
Of course, the sky isn’t falling any more now than it did for Chicken Little. It’s just that it could appear so in the isolated view of the week ending August 23, 2014.
There were 20 Twin Cities duplex sellers who accepted purchase agreements on their properties during the week. At 90 percent, almost all of those sellers had equity in their property.
This is a stark contrast to the same week in 2013. At that time, just 71.4 percent of the 21 sellers who accepted offers left closing with a check in hand. Ironically, these folks sold at an average price of $228,467; over $12,000 higher than the average final list price for this year’s group.
The banks contributed much more of the market’s new inventory last year, when just 60.7 percent of the new sellers were not facing foreclosure or a short sale. This year, 88 percent of the new listings that appeared on the MLS are being sold by equity sellers.
Meanwhile, the single family home market saw the number of New Listings rise 3.5 percent over the week last year. The good news is Pending Sales were also up; rising 4.5 percent. In all, Inventory declined 10.1 percent.
As we head toward fall, we should be able to get a better idea of where the market truly stands.