Trick Photography?

5229 Duncraig Road in Edina Highlands

In a post earlier this week (The Far-Away(?) Buffet), I discussed clues that something "just isn't right" in a particular photo.

So, is the apparently huge Living Room shown above for real?

You 'betcha.

The MLS dimensions are 27' x 17', or 459 square feet -- that's the size of some one bedroom houses in South Minneapolis.

Meanwhile, the huge Living Room is consistent with the huge house it's in -- almost 6,800 square feet (address: 5229 Duncraig Road, in the Edina Highlands neighborhood off Vernon; listing agent is John McDonald).

I'll see the rest of it a half hour from now, when I attend Edina's weekly Exceptional Properties meeting . . . likely in this very same room.

Investing $1,000 in Lehman Bros, AIG -- and Beer

Realtor "Water Cooler" Talk

The water cooler is long gone, of course.

Instead, we Realtors have meetings.

Lots and lots of meetings.

I picked up this nugget -- plus some good market info -- at Edina Realty's Exceptional Properties meeting this morning (anecdote courtesy of downtown Manager Matt Loskota):

"If you invested $1,000 three years ago in AIG, what would you have today?"

"$30."

"If you put that same $1,000 into Lehman Bros. stock, what would it be?"

"$0."

"Now, how much would you have if spent the $1,000 on beer?"

"$235 . . . If you'd kept the aluminum cans."

Disproves (sort of) that line about "you don't buy beer, you rent it."

Rising -- and Falling -- Real Estate Bar

Want to Stand Out? Drop > 10%

Want some anecdotal evidence about housing market conditions these days in the Twin Cities?

Higher Bar. Edina Realty, the Twin Cities' largest broker, requires price reductions of 10% or more to qualify for intra-company email distribution (I believe the policy actually dates back to this Summer).

Previously, the requirement was 5%.

The logic?

Five percent drops are now run of the mill; to get Buyers' attention (and qualify for email distribution), the number's got to really be eye-catching (no such threshold exists for circulating price drops within a branch office).

Lower Bar. Meanwhile, the bar for hosting Exceptional Properties meetings in the Southwest Region (the geographic area including my office, City Lakes) continues to drop.

Three years ago, the floor was at least $1 million -- and most homes hosting the meeting were well above that.

Tomorrow's meeting is at a home listed for $589k.

P.S.: many Realtors, including yours truly, have custom email distribution lists to market their listings. The trick is knowing the difference between judicious use of such lists -- and spam.

In Praise of the Underappreciated Vestibule

"Pin-drop" Front Entries

If you're a busy Realtor, it's not unusual to get to large, group meetings a couple minutes late (like the weekly Edina Realty Exceptional Properties meeting).

Which is fine -- unless the meeting is being hosted in a home where the entry and front door seem to open directly into the Kitchen, where 30 (or 50) of your colleagues are gathered, talking.

Then, everyone stops talking -- the proverbial "pin drop" moment -- and notes your (belated) arrival.

Too Much of a Good Thing?

What seems to be going on in these (not inexpensive) homes is that the owners and their architects, in their zeal to create more opened-up floor plans, neglected to enclose any private spaces.

Personally, at least, I think that's a mistake, for two reasons:

One. Physical comfort.

Minnesota's climate is not exactly benign.

Compounding the faux pas of arriving late was the gust of cold air and snow that I inadvertently brought in with me. Substitute blast of heat and humidity in the summer.

Two. Privacy.

There's something to be said for a home that actually has an entrance: a defined, transitional point where you leave the outside world behind and enter the home of the family you're visiting.

No, you don't need to be met at the door by a butler, but a place to dry off, remove your coat, etc. without bringing in the elements to the rest of the house is nice.

Actually, isn't that what mudrooms are all about? (although they're typically located off the garage or side door, as opposed to where "company" comes and goes).

Last Minute Multiples

"Jilting" Buyer #1 for Buyer #2

Topic A at this morning's Exceptional Properties meeting was how to handle a deal that's been verbally signed off on, when another, significantly stronger offer materializes before all the necessary signatures are in place.

The scenario's relevant because, in today's slower market for upper bracket homes, by the time an offer eventually comes in, several other Buyers are likely familiar with the home and mulling an offer, too.

Hearing that another Buyer has jumped first can then become a catalyst for one or more others to do the same.

So, does the Seller switch to Buyer #2 or not?

It's up to them.

Legally, they have every right to, because until there's a written contract . . . there isn't. A verbal agreement to sell real estate in Minnesota and virtually everywhere else simply isn't enforceable.

That doesn't mean Buyer #1 won't be upset (and likely take it out on the Listing Agent, who actually has a legal duty to relay Buyer #2's offer).

However, all parties to a real estate deal need to know, well before negotiation begins, that it's not done till it's fully executed (that is, signed).

Once there's agreement on all the terms, everyone needs to be available to promptly sign to make that happen.

P.S.: signed offers are a two-way street: more than one Buyer has been known to change their mind and balk at signing a Purchase Agreement that they verbally committed to.

(Not So) Exceptional Properties*

Upper Bracket Woes

Although Edina has been a housing standout in the current downturn, it, too, has pockets of excess inventory, and homes that have suffered serial price cuts -- and still aren't selling.

Just one street in Edina's Country Club section, Sunnyslope, now has six homes on the market, at prices ranging from $729,000 to $5 million. The market time ranges from just over 3 months to almost three years(!) (lots of green lawns in the MLS shots -- never a good sign in the Twin Cities in January).

What's going on?

Sunnyslope Sellers

Unfortunately, not just one thing. The economy, of course. The fact that anyone buying one of these homes likely needs a jumbo loan, which now carries a huge premium to so-called conventional or conforming loans (under $417k). The fact that people with the means to buy upper bracket homes have likely had their assets whacked, and now, their jobs threatened.

Finally, you'd speculate that the "Sunnyslope inventory glut" is emboldening Buyers to make, shall we say, "aggressive" offers that Sellers have been rejecting.

What you can categorically rule out is some sort of long-term decline, or a neighborhood-specific issue: Country Club is -- and is likely to remain -- a premier Twin Cities address.

So what happens next?

You'd guess some combination of more price reductions, Sellers who take their homes off the market, and/or Buyers who raise their offers enough to entice one or more of the Sunnyslope Sellers.

Although Edina so far has been spared the pox of short sales and foreclosures affecting other parts of town, that, too, could change with a deepening recession.

*Edina Realty has a special marketing group for upper bracket home called "Exceptional Properties," which includes two of the six Sunnyslope homes.