Housing Trend 2010: Grand(er) Entries

From More Square Feet to More Volume, Cont.

I've discussed previously the trend toward homes not necessarily with more square feet, but more "volume" (higher ceilings, more and larger windows, wider stairs and halls, etc. -- see, "Not More Square Feet, More per Square Foot"; "Cranking Up the Volume").

That trend applies to the exterior of homes, too.

So, builders (and their clients) are designing homes with wider and more generous front doors, steps, porticoes (if consistent with the house style), and even wider walkways from the sidewalk to the front door.

The cumulative effect is enhanced curb appeal -- and the suggestion of grand, sweeping spaces inside.

All those features are vividly on display at 3812 Chowen Avenue, in Minneapolis' Linden Hills neighborhood (pictured above).

The home was built by Elevation, a division of Streeter, and is being listed by Edina Realty's Sheila Cronin for $1.449M.

(Oh -- and the inside's stunning, too!)

List Price Discounts

Sold Price $135k below List? Ouch!

One of the characteristics of a Buyer's market is Buyers wresting steep discounts from the Seller's asking price. Even so, a $135k discount -- from an already reduced $800k asking price -- stands out for sheer magnitude (note: to see the unabridged report, go to "display" in the lower left and select "Property/Agent Full"):

http://matrix.northstarmls.com/de.asp?k=411903X1JL0&p=DE-39160848-449

Is the market really that soft?

At least in this case, I think a couple of other factors are operating.

First, the original asking price, $850k, was, shall we say, aggressive, based on what I know of the comp's ("comparable sold properties") -- quite a bit, considering that I've sold millions of real estate within a few blocks in the last few years.

Second, based on the time that elapsed between when the home went pending and when it closed -- one week -- you'd speculate that the Buyer paid cash. With tightening underwriting standards and fewer well-qualified Buyers out there, an all-cash offer warrants a nice discount.

Third, the home was a "spec" (speculative) remodel done by a builder-remodeler. By definition, such homes are vacant -- no one is deriving any benefit from them. Meanwhile, the holding costs continue to mount along with the time on the market.

Whereas many long-time owners can be quite emotional --and therefore stubborn -- about taking price reductions, corporate sellers tend to be more dispassionate and bottom-line oriented. Closing by year-end may also have had favorable tax consequences (if indeed the Seller took a loss).

Finally, the home sold in mid-December. Ordinarily, this is already a seasonably slow time of year for the Twin Cities housing market. However, with all the economic turmoil the last few months, December this year was colder than the thermometer.

In such an environment, a heavily "discounted" offer is better than none at all.