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Minneapolis Duplex Market Gets Skinny

June 29th, 2010 categories: Twin Cities Real Est

If the Twin Cities housing market were on a diet, it would be featured in a Jenny Craig ad.

For the week ending June 19, 645 single family home purchase agreements were signed. That’s down 44.2 percent from the same week one year ago.

New listings kept eating fruits and vegetables too; down 8.4 percent.

Duplexes and the small multi family market also dropped a pant size, shrinking 23.5 percent year-over-year.

The good news is traditional sellers continued to hold their ground, contributing 42.3 percent of the week’s pended sales compared to just 20.68 percent for the week last year. This was true of new listings as well, with bank mediated properties weighing in at 51 percent this year, down from last year’s 63.8 percent.

The week’s off market price must have cheated with a couple of cookies, because it finished at $129,748.  This is up from last year’s $114,580, but then again, we are comparing pended prices to closed transaction prices.

Let’s hope this week the market cheats with a Big Mac.

Spoken by Kari Lundin | Discussion: No Comments »

Minneapolis Duplex Sellers Rush To Beat Tax Credit

May 4th, 2010 categories: Twin Cities Real Est

Thank God that shipment of newly listed single family homes and duplexes hit the market just in time for the expiration of the first time and repeat buyer tax credits.

I’m being sarcastic, of course.

But with 2,147 new single family listings for the week ending April 24, representing an increase of 19.1 percent over last year, and duplex and multifamily listings up 32.7 percent year over year, it does appear sellers were rushing to get their properties on the market before the incentives ended.

Traditional sellers represented a clear majority of the new to market duplexes, with 60,9 percent of the new listings. This represents a significant jump from last year’s 21.2 percent market share.

Of the multifamily properties that received purchase agreements over the week, 38 percent were offered by traditional sellers. While not the majority of the transactions, this figure nonetheless represents healthy improvement over last year’s 7.9 percent.

This increase in traditional seller market share may also account for the average off market price of $155,428 compared to $88,026 for the same week last year.

Have the tax credits had an impact? We won’t know until the numbers for last week come in, but pended single family home sales for the week were up 9.8 percent over the same stretch last year.

Guess we’ll have to wait until next week’s report to see if sellers, as well as buyers, benefited from the tax credit’s end.

Spoken by Kari Lundin | Discussion: No Comments »

Minneapolis Duplex Short Sales May Be Your Prince

April 29th, 2010 categories: Buying A Duplex, Tax Credits

With just hours left to take advantage of either the $8000 first time home st  buyer or $6500 repeat buyer tax credits, you may find the inventory of decent dupelxes offered by traditional sellers and banks gone.

In fact, with time running out, you may feel a bit like Cinderella. Your carriage is about to revert to a pumpkin.

But fairy tales aren’t the only place where magic happens.

In this case, have your fairy godmother Realtor wave her wand at a short sale.

Legal counsel for Coldwell Banker Burnet’s parent company, NRT, has found that in order to qualify for either credit, a fully executed contract must be in place no later than 11:59 pm on April 30, 2010. Counsel further advises that a short sale is considered a legally binding contract when both the buyer and seller have signed the purchase agreement.

The fact that the lender still has to approve the terms doesn’t prevent the contract from being created. Therefore, that contract qualifies the buyer to earn the credit.

Of course, Cinderella still had to wait for her glass slipper to be returned. Duplex tax credit sales are no different. They must still close no later than June 30, 2010, in order for the buyer to earn the credit, which may or may not be problematic.

Spoken by Kari Lundin | Discussion: No Comments »

Minneapolis Duplex Sales Round The Bases For Home

April 20th, 2010 categories: Twin Cities Real Est

As the $8000 first time home buyer and $6500 repeat buyer tax credits round the bases for home,  the Twin Cities housing market appears to be staging a late inning rally.

For the week ending April 10, 2010, the number of new listings to hit the market was up 47.9 percent over the same week last year. In spite of this leap, there is still just 6.5 months of housing inventory in the marketplace; the lowest supply in years.

Pending sales were also ahead of last year, though the 3.6 percent jump wasn’t enough to seal a victory.

Meanwhile, the Twin Cities duplex market seems to need a seventh inning stretch.  The number of properties to receive purchase agreements for the week was down 39 percent from last year. Of those transactions, 32 percent belonged to traditional sellers, with the balance involving some sort of negotiations with a lender.

This slow re-emergence of the traditional seller has served to boost the average price a property leaves active status on the MLS at. For the week, this figure was $106,489; a grand slam when compared with last year’s $80,873.

While excess supply can often lead to falling prices, the week’s  23 percent year-over-year gain was as welcome as a seventh inning stretch. Much of the existing inventory had been sitting for a while, and the appearance of great new listings gave duplex buyers in search of a tax credit something to cheer.

Remember, the deadline for both tax credits is April 30. By then, buyers must have a signed purchase agreement in place, with closing on the property occuring no later than the end of June.

Spoken by Kari Lundin | Discussion: No Comments »

Don’t Let Your Tenants Suffer Burnout

April 19th, 2010 categories: Tenants

We’re living in economically challenging times.

As a result, most of us are cutting back on “extras”.  For some, that means opting to stay home and watch cable rather than going out.  To others, that may mean choosing to make a peanut buttersandwich  rather than bologna.

Unfortunately, for some tenants, that also means going without renter’s insurance.

First, if you’re a landlord and your lease doesn’t include language clearly stating that it’s your tenant’s responsibility to get insurance for her belongings, it should.

The reason is your owner’s insurance policy doesn’t cover the contents of your duplex.

In other words, if a fire, tornado, hurricane or earthquake topples your property, your losses may be covered, but your tenants belongings.

Most major insurance companies, like Allstate, Geico and State Farm offer some form of renter’s insurance.

While you must tell your tenant of their obligation to buy coverage, it’s a good idea to require them to provide you with proof they’ve done so.

After all, times may be hard but they’d be tougher still if you lost absolutely everything and didn’t have insurance.

Spoken by Kari Lundin | Discussion: No Comments »

Why Internet Lenders Are A Lot Like Sea Monkeys

April 15th, 2010 categories: Financing

I used to stare endlessly at the ads in comic books for sea-monkeys.

You know the ones.

They typically featured a cartoon of a little pink sea-monkey family, with their castle in the background.

There was also an image meant to resemble my family enjoying staring at my sea monkeys swimming around in a fish bowl. Of course, these sea-monkeys were waving at us.

Who wouldn’t want a pet like that? Heck, not even my dogs never waved at me.

Of course, when I ordered the sea-monkeys, they weren’t at all what I’d imagined. Oh, they were miraculous to watch hatch. But they weren’t pink, didn’t have a castle and most certainly did NOT wave back.

In fact, they were nothing more than shrimp. Brine shrimp.

Internet lenders remind me a lot of sea-monkeys. They promise to deliver lower interest rates, lower loan origination fees, faster closing dates and yet, no matter what Realtor you ask anywhere in the nation, you’ll get the same answer; they almost never come through.

And on the rare occasions when they do, nothing was what it appeared to be.

Most Realtors have a select handful of local loan officers they recommend. Agents get paid nothing for referring someone to a loan officer.

The reason we suggest our buyers work with these people is from experience, we know they can be trusted to tell our clients the truth, work hard to get them the best deal, and help them close on their new home on time.

Again, there is absolutely nothing in it for us to make these recommendations.

It’s easy for a loan officer who’s 1500 miles away to tell you to just hang out for two weeks while they get your loan together.  They can’t see your moving van loaded with furniture out in the parking lot.

It’s a lot tougher for a local loan officer to avoid looking you in the eye.

Or not wave back.

Spoken by Kari Lundin | Discussion: No Comments »

Minneapolis Duplex Market Open To Interpretation

April 13th, 2010 categories: Twin Cities Real Est

Sometimes interpreting the Minneapolis/St Paul duplex market is a bit like reading tea leaves.

There might be some meaning in the patterns.  But they’re open to interpretation.

For the week ending April 3, 2010, the number of new duplex, triplex and fourplex listings was up 18 percent over those properties new to the market for the same stretch last year.

Of these, 49.23 percent were being offered by traditional sellers. This figure meant a year-over-year decrease in lender owned or mediated listings of 20 percent.

However, it should be noted that the number of pended transactions for the week represented a drop of 9.5 percent year-over-year.

This decrease in sales activity did not seem to impact the average off market price, however, which was $119,734.  While not the obvious improvement of recent weeks, this figure was nonetheless just over $9000 higher than last year’s sold price.

Of those properties that received purchase agreements, 26.32 percent had people sign the purchase agreements rather than financial institutions. This represents a traditional seller gain of nearly 10 percent year over year.

The single family market was a bit easier to interpret. There were 11.8 percent more homes that received purchase agreements than did last year.

The number of active listings on the market are also up, beating last year’s by half a percent.

Further good fortune is promised with the news that the average number of days a property is on the market before being sold has dropped to its lowest in years, while the percentage of the list price a property sells for rose. Most properties now sell within 2.7 percent of their asking price.

Spoken by Kari Lundin | Discussion: No Comments »

Why Buying A Duplex Is Not Like Going To The Salad Bar

April 9th, 2010 categories: Buying A Duplex

I’ve had a number of phone calls of the same flavor the last few weeks.

The voices on the phone are interested in seeing one of my duplex listings; could they meet me there after another agent shows them his?

This always leaves a bad taste in my mouth.

MLS listed duplexes aren’t like cottage cheese and onions on a salad bar. You don’t need a separate spoon for each.

Now I’m happy to show any of my listings to any qualified buyer.  But I’ll be the first to say my sellers property may or may not be the flavor you’re looking for.

Let’s face it. Some people like Ranch dressing. Others like vinaigrette.  Some like Craftsmen duplexes, and others like 1960’s built side by sides.

The listing agent you contact may or may not be able to recommend other properties for you to sample if his isn’t right for you. But beware; he may not even specialize in duplexes.

Every Twin Cities Realtor who’s a member can show you any property that’s active on the MLS.  Properties aren’t limited by type, nor by who the listing agent is. A residential home specialist can show you a duplex, single family, fourplex or even a strip mall.

In other words, you don’t need to use a separate spoon for each offering.

In fact, one spoon will get you a better salad.

Agents who specialize in duplexes not only know the inventory that’s on the market, which properties are over priced, which need work,  and most importantly, often know of duplexes that are available for sale, but not yet on the market.

Like shrimp on a salad bar, good properties go fast. The minute a property comes on the MLS that’s right for one of my clients, we see it. And if it’s what we hoped, we write an offer on it; so by the time it hits Realtor.com, it’s already gone.

And buyers working by themselves, or with inexperienced duplex agents, never had a chance.

Smart buyers pick a spoon.

Especially with just 21 days left to earn the home buyer tax credits.

Spoken by Kari Lundin | Discussion: No Comments »

How Your Minneapolis Duplex Purchase Can Be Like A Wes Craven Movie

April 8th, 2010 categories: Multi-Family Property Investing

There’s nothing like a good adrenaline rush.

That’s why people jump out of airplanes, line up for horror movies, watch the Vikings and fall in love.

It’s also what some new investors are looking for when they start hunting for their new duplex.

They want to score a big return; usually in the form of a property that’s worth twice what they paid for it and also throws off so much positive cash flow every day that they can quit their day job. Next week.

They’re looking for that high reward duplex.

Trouble is, experienced investors in every market know that high rewards come only from one kind of investment; one with high risk.

What kind of risk? Well, tenants that require a great deal of hands-on management, buildings in higher crime neighborhoods, and often, properties in disrepair.

Granted, these places generally have a great return on investment; if you’re up for the challenge. Many investors are. Many are not.

When you’re first starting out and want to know what constitutes a good rate of return on your duplex investment, ask yourself some questions. Is the property in a neighborhood where you could potentially lose money? How much time are you willing to spend managing your property? Making repairs?

Most importantly of all, ask yourself what percentage increase in the rate of return your time and effort are worth.

Ever investor has different levels of risk tolerance.

Making a killing on an investment not only provides a huge adrenaline rush, but also fodder for hours of storytelling with friends. So does getting mugged. 

For that kind of thrill, it might be easier to just go to the movies.

Spoken by Kari Lundin | Discussion: No Comments »

Duplex Market Has Something Up Its Sleeve

April 6th, 2010 categories: Twin Cities Real Est

Was it a rite of spring?

Or a magic act?

Either way, the Minneapolis duplex market managed to pull a rabbit out of its hat the week ending March 27, with pended sales up 62.5 percent from the same week one year ago.

Of those proeprties that received purchase agreements, 28.21 percent were signed by traditional sellers. While this seems like a disappearing act compared to previous weeks, it’s important to note that ALL of the pended sales for the week in 2009 were offered or mediated by financial institutions.

A still more stupendous feat may well be the fact that the average off market price for the week was $110,077. This made last year’s average sale price of $64,605.

For the week, new inventory performed something of a disappearing act; dropping 26.15 percent from last year. Again, this should help put upward pressure on prices.

The opposite was true in the single family home market. New listings for the week were up 29.4 percent over one year ago.

The good news is pending sales were up 13.8 percent, with the total number of signed purchase agreements topping 1000.

While not as impressive of a trick as making an airplane disappear, has managed to reduce the Supply-Demand Ratio to just 4.39 homes per buyer; the lowest it’s been in years.

Let’s hope there’s more magic yet to come.

Spoken by Kari Lundin | Discussion: No Comments »

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