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Minneapolis Duplex Market Hints At Thaw
March 2nd, 2010 categories: Twin Cities Real Est
Believe it or not, in some sectors of the Twin Cities housing market have begun to thaw. In fact, it feels like spring: of 2006.
Realtors and our clients are once again experiencing multiple offers and having to rush to see newly listed properties before they’re gone.
Unfortunately, the bulk of this activity is in first time home buyer territory; namely, those properties below $225,000.
But there are hints in MAR’s Weekly Market Activity Report that perhaps things are loosening up. For the week ending February 20, pending sales were actually 9.9 percent higher than they were for last year. This is the first year-over-year increase we’ve seen in weeks.
With just 5.39 homes available for each active buyer in the market, a 17.7 percent increase in the number of new listings for the week may help those facing multiple offers find homes. There are 6.9 percent fewer homes available for purchase this year than there were at this point in 2009.
In the small multifamily sector, traditional sellers continued to gain ground on the banks. Twenty-five percent of the owners of properties that received purchase agreements were people, not corporations. Of those listings new to the marketplace, 48.14 percent were being sold by people with actual names.
While the number of pended duplex sales was down 38.5 percent, the good news is the average price they left active status at was $121,509. This represents a significant leap over last year’s sold price of $94,671.23.
As we head toward the $8000 first time home buyer and $6500 repeat buyer tax credit April 30 deadline, we’re sure to see even more signs of spring.
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A Minneapolis Duplex Isn’t Always About The Numbers
March 1st, 2010 categories: Buying A Duplex
One of the reasons I specialize in helping people buy and sell duplexes is that each and every one, whether it’s strictly an investment property or a place for the owner to live, is that it is both an intellectual and emotional endeavor.
On the one hand, for both investors and owner occupants, the financial analysis is crucial. If you’re an investor, the property needs to meet your financial goals for a return.
If you’re an owner occupant, the numbers also need to work. Most buyers have a very specific idea of how much they’re willing to contribute in “rent” toward their share of the monthly mortgage payment.
But for both an investor and an owner occupant, the return a property gives your heart can be just as important.
There are times when owning an income property sucks. Period. And it’s times like that when a piece of woodwork, a built-in, a view, can be the inspiration to muddle through.
Make sure your duplex is a good investment. Of course. But it never hurts if it makes your heart sing too.
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Don’t Cheat On Your Minneapolis Duplex Agent
February 22nd, 2010 categories: Legal Stuff
One of my buyers cheated on me last week.
He called another agent about a property the agent had listed.
After he told me he’d see only me!
It could cause me not to get paid.
See, in real estate there’s something called “procuring cause”. And it belongs to the agent who caused the buyer to purchase the duplex.
If my client called and asked me to help him see or write an offer on the property, I could have to split my commission with the listing agent. Why? Because that Realtor could argue that he was the one who was responsible for the purchase; having provided my client with the information that caused him to write an offer.
The same could be true if you asked another agent to show you a property, walked through an open house and spoke with the agent, or even called on a newspaper ad.
It doesn’t matter how long I’ve been working with that buyer, how many duplexes I’ve shown him, nothing. And I’d have to split my check because of that one phone call.
Of course, I do practice safe real estate and have a Exclusive Right to Represent Buyer contract in place. However, even that may not protect me entirely.
So my buyer and I had a talk; one in which I reminded him to always disclose to other agent that he’s working with another Realtor.
As part of our understanding, he can’t ask another agent to show him a property, call listing agents for information, and must always tell open house agents he’s working with me.
He understood. And since he’s a good guy, I forgave him.
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Buyers Nod Yes In Minneapolis Duplex Market
February 16th, 2010 categories: Twin Cities Real Est
Back in the day, oh, say, in around 2005-2006, well-maintained properties that were properly priced were selling at a rapid pace, and with multiple offers.
It was almost like an auction, with bidders scrambling to out-strategize and out-maneuver one another.
And while we all know the market has changed since then, there have been some buyers making subtle nods of their heads in recent weeks.
With today’s release of MAR’s Weekly Activity Report came news that the monthly supply of inventory is now at just 5.5 months. While this number still slightly favors sellers, it’s important to remember that a balanced market, where buyers and sellers are on equal footing, occurs when there is a 5 month supply.
For the week ending February 6, MAR reported new listings of single family homes were up 3.8 percent from one year ago. So too were pending sales, with 4.7 percent more properties receiving purchase agreements than in 2009.
While duplex sales for the week were down 3 percent from last year, there was decidedly less inventory for buyers to choose from. The week showcased 23 percent fewer new listings than came on the market the first week of February last year. Of the 2010 new offerings, 10.8 percent were listed by traditional sellers, compared with just 5.3 percent last year.
The average off market price for the week was $121,536. This is up considerably from last year’s $98,528.
Tightening inventory brings increased competition for listings. And while it’s not scientific, I can share that three of my buyers have been involved in multiple offer situations in the last 10 days.
As long as inventory remains tight, expect that trend to continue.
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Let Fannie Mae Buy You A Refrigerator
February 11th, 2010 categories: Financing
Last week Fannie Mae announced it is offering a 3.5 percent incentive for buyers who purchase and close on a property they own between January 28 and April 30, 2010.
Fannie Mae owned properties can be found both on the MLS and at Homepath.com.
Buyers Homepath properties may receive up to 3.5 percent of the final sales price for:
- Closing costs
- The purchase of new Whirlpool appliances by Fannie Mae or
- A mix of the two at the buyer’s discretion, up to the maximum of 3.5 percent
In order to be eligible for the incentive, offers must be accepted after January 28 and close before May 1, 2010. Investors aren’t eligible for the bonus.
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Minneapolis Duplex Market Goes Zen
February 9th, 2010 categories: Twin Cities Real Est
MAAR issued its Weekly Market Activity Report this morning and by all appearances, housing transactions for the week ending January 30, 2010, remained in their meditative state.
Pending single family home sales were down just slightly from the same week in 2009, while the number of signed purchase agreements rose just 0.7 percent.
The number of new single family home listings didn’t make any real perceptible moves either, dropping 3.7 percent year over year.
The duplex and small multi-family market showed a few signs of movement, but most were slight. For example, of the properties this year that received purchase agreements, 95 percent involve a lender in the negotiations. This is down .5 percent from last year.
The average pended price of properties for the week in 2010 was $98,395, compared with last year’s average sale price of $93,118.
New listings for the week trailed last year by 12.3 percent. The good news is 40.35 percent of the week’s new inventory was offered by traditional sellers, compared with just 26 percent for last year.
Let’s hope the tranquility doesn’t last.
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Two Halves Make A Whole In Minneapolis Duplex Market
February 4th, 2010 categories: Buying A Duplex, Selling A Duplex
What is the most common question I get asked in a duplex open house?
Is it, “What will the seller take?”
No. And even if it were, and I knew the answer (sometimes sellers surprise me), I couldn’t tell you. After all, the seller hired me to look out for her best interests, and by law, I have a duty to do just that.
The number one question is, “Is the whole duplex for sale or just one side?”
Many people don’t understand that while a duplex contains two residences, it has one Property Identification Number or PIN, with the county. It is considered one property.
In order for the two halves to be sold separately, each would need to have its own PIN. While that is possible, and certainly, many fourplexes and larger apartment buildings have been split up and sold independently as condominiums, there is some legal paperwork involved.
One of the challenges in doing this with a duplex is the formation of an association. With larger properties especially, developers who are selling the individual units, hire an attorney to form a homeowners association,.
In the bylaws, all the rules, regulations, dues, and means of resolving disputes are clearly spelled out in advance of the sale. This infrastructure helps prove a mechanism through which to collect and pay for maintenance, improvements and pursue delinquent homeowners.
Most of these associations have a board of directors which is populated by residents of the property. The board makes recommendations in terms of increased fees, exterior paint color schemes, etc., which residents then vote on.
What happens in a duplex if each owner wants the outside a different color? Who casts the deciding vote? Or if one owner stops paying her share?
Tough to resolve. Which is exactly why most duplexes never face being split up and sold separately.
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Minneapolis Duplex Market Studies Itself In The Mirror
February 2nd, 2010 categories: Twin Cities Real Est
The Minneapolis Area Association of Realtors released its weekly activity report last night, and it turns out that January of 2009 and 2010 are almost mirror images of one another.
Pending sales and new listings are down a bit from last year, and there’s a little bit more inventory on the market, but, by en large, it’s a wash.
For the week ending January 23, there were 2.3 percent fewer signed single family purchase agreements than there were for the previous year.
In the duplex market, however, the reflection from year over year had a few ripples in it.
The number of signed purchase agreements for the week in 2010 was down 31.4 percent from the 2009 mark. Of those properties that did receive and accept offers, 12.5 percent were brought to the market by traditional sellers. This represennts an increase of 4 percent year over year.
The average off market price for the week was $95,177; almost identical to 2009’s $95,371.
While the number of new listings to hit the market was virtually identical, this year traditional sellers were responsible for 40.35 percent of the new inventory. This is a stark contrast to last year’s market share of just 8.5 percent.
Hey, look at it this way. At least there aren’t any new wrinkles or gray hairs to contend with.
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13 Inexpensive Ways To Improve Your Minneapolis Duplex
February 1st, 2010 categories: Home Repair
The spring housing market begins one week from today.
If you’re thinking about selling, that’s important information. However, it’s equally important if you’re a landlord facing a spring vacancy.
Why?
Many of your usual prospective tenants are going to be looking for houses in order to beat the April 30 first time homebuyer tax credit deadline, resulting in more landlords competing for fewer prospective tenants.
What’s more, many homeowners unable to sell their property for what it’s worth have turned them in to rentals, meaning there’s far more competition out there than ever for rental dollars.
Here are ten ways you as a landlord can compete:
1. Get your vacant unit so clean that your mother would stay there.
2. Give every room a fresh coat of paint.
3. If the kitchen cabinets lend themselves to it, apply a fresh coat of paint and updated hardware. You’d be surprised how inexpensive hinges, knobs and drawer pulls can be. Replacing them can immediately give a kitchen a face lift.
4. If your kitchen counters are dated, replace them. You don’t have to put in granite, but many of the larger home improvement chains offer relatively inexpensive laminate counter tops with a similar look and feel to high end stone.
5. Replace switch plates. At pennies a piece, the return on the investment here is significant. Filthy switch plates imply a history of grime. Painted-over switch plates send a message of laziness.
6. Paint the front door. It’s tough to paint in the winter, I know. But you could remove the door, taking it to the warm basement long enough to get it painted and dry. It may be possible to cover the opening with plastic while you’re waiting.
7. Shovel the sidewalks. Fallen on ice yet this year? Enough said.
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Every Minneapolis Duplex Cloud Has A Silver Lining
January 25th, 2010 categories: Twin Cities Real Est
There’s a lot of doom and gloom in the air today, and not all of it has to do with last night’s Viking loss.
Some of it has to do with today’s announcement by the National Association of Realtors that nationally, existing home sales fell in December. It wasn’t entirely unanticipated. Most economists thought the rush to beat the original November tax credit deadline might have an effect on December’s housing market. And it did.
So that’s the bad news. But there was some good news in the rest of the story.
See, while existing home sales fell 16.7 percent, they were still 15 percent higher than they were in December 2008.
More importantly perhaps, 4.9 percent more existing homes sold in 2009 than they did in 2008.
The national median home price was $178,300, which is again up over December 2008; albeit a slight 1.5 percent.
Of course, foreclosures and short sales, which represented 36 percent of all home sales last year continue to skew those median price numbers.
The Vikings had a sliver of good news too. Yesterday’s loss means they’ll get a better draft choice.
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