Duplex Chick

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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.

Stay tuned.

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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.

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The more the Minneapolis duplex sales change, the more they stay the same.

Take the week ending April 21, 2012, for example. There were 25 Minneapolis and St Paul duplexes, triplex and four unit apartment building owners who received and accepted purchase agreements. Seven of them did not have to consult with a bank to do so.

This is exactly the same number who did so last year, with exactly 25 duplexes, triplexes and small apartment buildings selling for the same week.

The biggest difference, however, is this year, the average list price those properties left the market at was $154,120. The average sold price for the week last year was $108,161.

While there currently a difference in list price to sold price of around 10 percent, this adjustment will still result in duplex sellers receiving higher values for their properties.

New inventory continued to mirror the statistics of last year as well. There were 32 new listings for the week, 56 percent of which were brought to the market by traditional equity sellers.

For the same week last year, there were 33 new listings, with 52 percent of them brought to the market by traditional sellers.

While inventory continues to be short in the multi-family property market, single family homes saw a week over week increase in new inventory of 13.9 percent.

This is good news for prospective home buyers, as the number of pending sales was up 41.2 percent, bringing the total amount of inventory available on the market down 28.4 percent.

I’ve said it before and I will again. If you’re a duplex owner considering selling, it’s a great time to do so.

We simply can’t find enough property for our buyers!

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When it comes to Minneapolis duplexes for sale, there’s good news to report. For the week ending April 14, 2012, Twin Cities duplex sales jumped 25 percent over the same week in 2011.

Of those duplex owners who signed a purchase agreement, 36 percent of this year’s group were traditional sellers. This is down from last year’s group, where 45 percent did not have to consult with a bank in order to agree to sell.

On average, duplex listings went off the market at an average final list price of $139,662 during the week, compared to their final sold price one year ago of $119,735.

Meanwhile, the duplex inventory shortage continued, with just 26 new listings hitting the market, compared with the 47 we saw arrive on the MLS last year. Of this year’s new crop, 61.5 percent are being offered for sale by traditional sellers. Last year, just 36.2 percent of the duplexes, triplexes and four unit buildings were not in a distressed situation.

The single family home market also saw fewer new listings, down 9.5 percent over one year ago. Pending sales continued to climb; up 25.5 percent. Combined, this left the market with 27.8 percent less inventory than was available for sale last year.

I’ve said it before and will again. It’s a good time to sell. You just won’t have that much competition on the market.

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This year, the Easter bunny may have laid a bit of a pre-holiday egg to the Minneapolis duplex market.

The number of duplex, triplex and fourplex owners who received and accepted purchase agreements the week ending April 7, 2012,  was down 25 percent from the same week one year ago. (The Easter holiday was much later in the month in 2011.)

Forty percent of these happy sellers were people who either did not involve a bank in their decision to sell. This represents a 5 percent market share drop from last year’s duplex sellers who had equity in their property.

New inventory continued to be scarce, with 26 percent fewer Minneapolis and St Paul duplexes newly offered for sale. Of the 28 new listings, 39.3 percent are being sold by traditional sellers. This is nearly identical to the 39.5 percent equity seller in last year’s figures.

In the single family home market, the number of new listings was down 19 percent. Meanwhile, pending sales were up 15.5 percent. Increased demand, coupled with diminishing supply left the market with a total year-over-year inventory decline of 27.3 percent.

Next week, when holidays don’t play as much of a statistical factor, we should have a more accurate read on Minneapolis and St Paul duplex sales.

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Following last week’s celebration of an increased number of Minneapolis duplexes for sale, things returned to their “shortage” status this week.

The number of new duplex listings on the Twin Cities real estate market for the week ending March 31, 2012, dropped 25 percent from one year ago.

Of these new opportunities, 67 percent are owned by traditional sellers. This is up from last year’s 43.8 percent equity seller market share.

The week saw pending sales slip by one transaction, with 25 duplex, triplex and fourplex owners accepting offers on their properties. Of these, 48 percent are sellers with equity. This too represents increased market share over the 23 percent of equity sellers last year.

This across the board increase of traditional seller activity translated to an average off-market list price of $149,004. While this is up from last year’s average sold price for the week of $134,018, it’s important to note that on average, properties on the MLS are selling for 92.1 percent of list price.

In other words, an average price once these transactions have closed might be closer to $137,200.

The single family home market is suffering many of the inventory shortage pains that the Minneapolis and St Paul duplex market is. There, the number of new listings dropped 12.1 percent, while pending sales increased 25.2 percent over the same week in 2011.

In all, inventory is down 27.2 percent. This helped the Median Sales Price for March rise 6.4 percent to $149,000, and the average length of time a property is on the market before selling to decrease by 10 percent to 144 days.

In all, we have a 4.6 month’s supply of inventory. Anything below 5 months is usually considered a seller’s market.

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It’s been so long since I had this kind of news that I actually had to sandblast off the rust in order to be able to type the next sentence…

The number of new duplex, triplex and four unit listings  that came on the Minneapolis and St Paul market the week ending March 24, 2012,  were up 35.5 percent over the same week the year before.

For the duplex buyers in the market, that’s very good news.

Of these new listings, 45 percent of these duplexes are being offered for sale by traditional sellers. In other words, they are not foreclosures or short sales. This represents a 5 percent market share increase over the same week in 2011.

Minneapolis and St Paul duplex sales were also up; though at an 11 percent increase, nowhere near as dramatically.

Forty percent of the duplex sellers who accepted offers were people with equity in their property. Last year, just 22.2 percent of the sellers took checks from the closing.

As of yet, prices aren’t up. In fact, with an average off market list price of $145,728,  and sellers, on average accepting offers at 90.6 percent of list, in all likelihood when these duplex sales close, values will be down from the $142,937 for the week in 2011.

The amount of new inventory in the single family home market dropped 2.2 percent for the week. Meanwhile, pending sales were up a whopping 30.2 percent. In all, the amount of single family home inventory is down 27.3 percent.

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According to the National Association of Realtors (NAR), sales of investment properties jumped in 2011 to the highest levels since 2005.

Last week, NAR released their annual report, 2012 Investment and Vacation Home Buyers Survey, which covers existing and new-home transactions for 2011.

The study shows investment property homes and duplex sales jumped 64.5 percent to 1.23 million. This is nearly doubly the 749,000 that sold in 2010.

In fact, investment property sales were responsible for 27 percent of all real estate transactions last year.

Perhaps this is because 41 percent of all investment buyers purchased more than one property.

Of these investors, 49 percent paid cash in 2011. Half of all investment properties they bought in 2011 were distressed; meaning they were either bank owned or a bank was involved in the negotiations.

For those duplex investors who financed their acquisitions, the median down payment was 27 percent.

How much were investors spending? The median investment property purchase price was $100,000 in 2011. This is up 6.4 percent from the $94,000 seen in 2010.

On average, the typical investment property buyer last year had a median age of 50, earned $86,100 and bought a duplex or other investment property that was, on average, 25 miles from where they lived.

Thirty percent of all single family, duplex, triplex and apartment building investors lived more than 100 miles from the property.

The share of property investors who were in the market to rehab and sell for a profit stood at 5 percent. While this is an increase from the 2 percent market share in 2010, most investment buyers intend to own the property for a median of 5 years. This is down from the 10 year expected ownership period seen among 2010 investors.

Of all the real estate investors, 34 percent did so with the intention of diversifying their investment portfolio or saw it as a good opportunity. Half did so with the intention of generating rental income.

Fourteen percent of real estate property investors bought so they could provide housing for a family member, friend or relative.

Nearly half of all real estate investors said they will buy another property in the next two years.

As there are nearly 42.1 million people in the country ages 50-59, another 43.5 million between 40 and 49, and another 40.2 million in the 30-39 age range, it looks like the investment property market is positioned to stay strong for years to come.

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When is a good time to sell your Minneapolis duplex?

Now.

No, prices aren’t what they were in 2005-2006.

And they aren’t going to be anywhere near there for quite some time.

So why is NOW a good time to sell?

Because during the week ending March 17, there were just 28 duplex, triplex and fourplex listings newly  for son the market. Last year during that same week, there were 22 percent more new properties for buyers to choose from.

Of the new listings, most (53.6 percent) were being sold by traditional sellers who did not need a bank’s permission to sell. This represents a market share increase of 3.6 percent from last year.

Meanwhile, there were 17 Minneapolis and St Paul duplexes sold the third week of March. Of these, 52.9 percent did not involve a bank in the sale negotiations. While this number represents a 29 percent drop in new inventory compared to the week one year ago, it’s important to note just 16.67 of those sold properties were owned by sellers with equity.

In other words, the banks don’t seem to be offering as many of their Minneapolis and St Paul duplexes for sale.

And yet, here’s the real news…according to my crude estimates, there are over 200 bank-owned duplexes currently on the books, but not on the market.

I wish I could tell you why they aren’t selling them, but I honestly have no idea.

Worse yet, I couldn’t even begin to guess when they will offer these duplexes for sale; or foreclose on all the owners who are behind on their mortgage payments.

They simply aren’t doing it right now.

Which gives traditional Minneapolis and St Paul duplex sellers a window to sell…

One that won’t stay open forever.

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Dear Duplex Sellers,

We miss you.

ALL of you; whether you’re a bank, upside down on your duplex, or a traditional seller with equity in your property.

We know you’re out there, somewhere. You’re just not in the process of actively selling, even though the market right now is terrific.

Think I’m making it up?

Right now, metro-wide, there are just 318 duplexes, triplexes and four unit properties for sale.

Of these, 113 already have offers and are in the process of either getting a short sale approval or in an inspection period.

On the Mineapolis side of 35W, there are 95 properties available. On the St Paul side there are 183.

Meanwhile, there are rumoured to be as many as 6 million single family, duplex, triplex and fourplex owners nationwide who are at least 30 days late on their mortgage payment.

What this means to traditional sellers is this moment, right now, is yours. At some point in time, the banks will have to actively foreclose on delinquent property owners. And when they do, seller competition will go up and values may go down.

For the week ending March 10, there were 32 Minneapolis and St Paul duplex sellers who accepted purchase agreements for their properties. Of these, 37.5 percent were sellers with equity in their properties. This market share was equal to last year’s, when six of the sixteen properties that sold were offered by traditional sellers.

However, it’s interesting to note the average sold price for the week in 2011 was $99,105. The average off-market list price for the same week this year was $159,430. As always, we’ll have to wait until those sales close to know how we truly fared.

There were 31 new listings for the week. Savvy traditional duplex sellers recognized their opportunity and contributed 51.6 percent of the new inventory. Last year during the same week, equity sellers contributed 40.7 percent of the 27 new duplex listings.

The single family home market continued to see decreases in the number of new listings, dropping .3 percent for the week. Meanwhile, pending sales were up 20.9 percent. This decreased the total amount of inventory on the market by 24.3 percent.

We miss you, Minneapolis duplex sellers.

Please write back.