The Minneapolis Real Estate Blog: April 2008

The Minneapolis Advantage Loan Program - Available to Everyone, Even Luxury Homes

The Minneapolis city council has recently approved a new loan program for buyers who purchase a single-family dwelling, or duplex, in Minneapolis neighborhoods that have experienced higher than normal levels of mortgage foreclosures. The program offers a $10,000 zero percent interest loan that is forgivable over five years to anyone buying a home in which they will live in these key neighborhoods.

Minneapolis neighborhoods who could benefit from this program include Camden, Weber, Folwell, and McKinley, as they are offering an additional $4000 for homes bought in their areas. This brings the total offered to $14,000, and the city of Minneapolis is looking for other areas that will partner this initiative and offer incentives to home buyers.

The funds can be used for a down payment, or for closing costs. They can also be used by the buyer to offset any repairs/improvements that will be done to the home. Better yet, ANYONE can take advantage of this offer as it is not based on any home price!

So if you are thinking of buying in Minneapolis this year, make sure you ask your Realtor and lender about the Minneapolis Advantage Loan Program!

It's migration season right now in Minnesota. Is it any wonder that water fowl love breeding here, what with all the lakes we have in the state? So far this last week, I have seen various species of ducks, geese, and cranes. Below are two that have visited our pond just in the last few days.

Hooded Merganser

One of the things I most love about Minnesota is the attention to nature. Throughout Minnesota you will find natural preserves, lakes and ponds, walking trails, bird clubs, and more. The wildlife does help out by showing up, but it is really great to live in an area where I can educate my kids about animals, nature, and protecting the environment.

The amount of days that a home sits on the market does not necessarily have anything to do with the home for sale. Many times, it has to do with location, and even the amount of competition from other neighbors. Take for instance, Minnestrista, Mound, and Orono, which have the largest amount of homes for sale this year. They also have a relatively high number of days of the market (DOM).

At the same time, you could look at Orono with its high DOM, and also take into consideration that the average selling price in 2007 was almost $2 Million, also contributing to the reason for a high DOM.

On Lake Minnetonka, there are many small towns that surround the lake, and each has homes that vary in price. Greenwood for instance, is relatively small, and only had four homes sell for all of 2007, at an average sales price of $1.1 Million. Spring Park, on the other hand, has only two homes for sale and barely 2000 residents, but the average sales price is just a little above $600,000.

As you look at the average days on the market for Lake Minnetonka, the one thing to remember is that most of these homes are fairly expensive. And as we all know, the higher the price, the longer is takes to sale.

Single Family Homes for sale in the Twin Cities are at record levels, with the average sales price dipping just below 2005 levels. Will they keep going down? Honestly, I don't know, but there are signs across the region that prices might be leveling off.

The quick market analysis so far this year is that listings are up, sales are down. But you knew that already, didn't you?

This weeks historic home in St Paul is 301 Summit Avenue.

Built in 1905 by George Gardner at a price of $28,000 this Georgian Revival home was designed by Thomas Holyoke. Holyoke was the chief draftsman for the infamous architect Cass Gilbert on the state capital building and also built five homes on Summit Avenue. Another home was originally built on this site in 1882 in the Queen Anne style, but it was moved around the corner to 107 Farrington in 1903.

The home has changed very little since construction. I was able to find a photo of the home as it appeared in 1948, before it became a German cultural center. The original owner, Mr. Gardner, lived in the house up until 1946 when the St. Paul Priory took possession. It wasn't until 1966 when the current owners bought the home for $60,000 by selling bonds, and it became the Volksfest Kultur Haus. In 1990, the organization changed its name to the Germanic American Institute.

I have had the privilege of viewing the home during a Historic House Tour and the home is amazing. There are two grand parlors on the main floor, each flanking a central staircase. The basement is fully utilized and a good place to socialize. German quotes and sayings abound throughout the house. Even though it is no longer used residentially, the Institute fits in nicely on Summit Avenue. There is even a carriage house in the back that looks like a small home, but has around 2000 square feet. If the property were to come up for sale, it would most likely fetch well over $1 Million.

As some of you know who might read my other blog, we recently moved into our new home we had built. We were lucky to buy one of the last lots, so the builder was giving away some great incentives to close out the subdivision.

This past week, two homes have gone up for sale in the neighborhood, and both are priced differently. The neighborhood is only two years old, so these are two of the first homes to be resold.

• the first home is on a flat lot and was bought for $280,000 a year ago. They are now asking $300,000 for the home, but have also finished the basement. I viewed the home two weekends ago with a client, and thought that the asking price was very fair to the current market.
• the second home just went active a couple days ago at a price of $380,000, which is the exact same price they paid for it two years ago, during the height of the market. It is a walkout lot and has a finished basement. However, I knew right away that in this current market, it was way overpriced.

Of course my husband teased me, saying that I wasn't a very good real estate agent, not getting my name out to the neighborhood already. According to him, we have been here a month and a half and I should have already canvased the area with promotional materials. At these times, I just have to roll my eyes and ignore his "sarcasm".

Then a funny thing happened on Monday. I received a phone call from an appraiser representing the relocation company taking care of the owners of the second home. The appraiser wanted to speak with me about our house, as it seemed to her to be a very close comparable to the home. I told her about all our upgrades, as we had many due to the huge incentives, that we had a finished walkout basement, and that our lot was far superior to the second home. Ours sits on a cul-de-sac with woods and a natural area behind it, but theirs backs up to other homes and has a smaller lot.

Of course during the conversation I told her I was a real estate agent, and we talked for about half an hour about other homes in the neighborhood that had recently closed with the builder. She then asked me the question that I knew was coming:

"In this market, what do you feel is the market value of this home?"

I told her, that "I hate to throw the agent and the owner under the bus"...but the home is not worth the money they paid for it. Looking at the current solds in the neighborhood, the house is probably worth $350,000, which is $30,000 less than they paid for it in 2006. Surprisingly, the appraiser agreed with me and stated the other comparable homes she was coming up with were not supporting the current list price either.

You can't pull the wool over the market's eyes. The truth will always come out, and buyer's, with so much information at their finger tips, can easily judge for themselves what current market value is. It is sad that so many homeowners are faced with a similar situation, but they will be thrown under the bus if they over-price their homes. What's a real estate agent to do in a market like this, but present the real picture to sellers and buyers. Unfortunately, not everyone wants to listen.

For those of you that read my blog, you know that I am a big advocate of good photography. Now, I am no professional, but I have trained myself to realize and see the benefit photography can make when selling a home.

So when I was had some extra time on my hands two weeks ago, I shot this video. Unfortunately, it is not finished, at least from what I had planned. A few days after filming, we took our kids to Chuck E Cheese when the grandparents were in town. Little did we realize it was spring break, so every kid in Minnesota was there for some fun...and so was every germ known to exist under the sun. For over a week I have been battling not only my own bronchitis, but taking care a family that won't get well.

Here is my entry for the Active Rain Video contest 2008. While I hate to post it unfinished, it would be just as worse to let all my effort go to waste. Enjoy!

If you have ever been to a Motley Crue concert in the last few years, you would know that their stage theme is absolutely fantastic. The reason? They create an environment that not only tells a story, but they evoke emotion and engage the fans. I attended a concert a couple years back, and while not a raving fan, had a fantastic time. How could you not with all the fire works, dancers, music, and fun?

In the soft real estate market today, homes are taking longer to sell, and many times, home owners are reducing their price to get someone, anyone, to take the home off their hands. Sadly, many probably wouldn't have to undercut themselves if they looked to Motley Crue for inspiration.

Excuse me? Motley Crue?

Yep and for obvious reasons. Buyers want to walk into a home and immediately feel like it is theirs. They want to be inspired...they want to see fireworks.

The best way to do this is to "stage" your home. While many of us might think our home is decorated just fine, nothing could be further from the truth. Those walls that are painted a deep purple...gotta go. The 1980s wallpaper with Paisleys...gotta go. The little figurines you collect which are scattered throughout the home...gotta go.

Why? Because a home looks better when it is depersonalized and neutral. If you want to see some great before and after shots of staged spaces, and get an idea of the difference staging your home can make, please visit this site. (He just happens to be an Active Rain member) The effect staging has on a home that is for sale is obvious once you see these photos. What emotions come over you? Would you want to buy these homes if you saw them in the "after" state?

I would have to say yes. Staging a home will not only make your home show BETTER, it most likely will help your home sell FASTER, and for MORE money. Here is an idea I want to leave you with. Instead of reducing your home $5000 or more, why not look into a consultation with a professional home stager? With the little money you spend on staging your home, you could actually net more in the end and walk away with a great story on how you sold your home in a market when so many other sellers are failing.

Readers would love to know what staging a home costs. If any of our AR stagers are reading, could you let us know some averages that you have come across?