Review: Foreclosures on Google Maps

Not Ready For Prime Time

I just spent 20 minutes or so checking out foreclosures on Google Maps.

My conclusion?

It's hard to escape the feeling you are an unwitting beta tester (guinea pig) -- plus, it's apparent that Google's real aim is use limited free data to goose paid subscriptions (translation: Google's business model is cable, not TV).

That is, once Google's data gets better.

Test Drive

The concept -- visually show where foreclosures are most (and least) concentrated -- is terrific.

At least for now, however, the execution is plagued by inaccurate and/or stale data, as well as purposefully incomplete information designed to get visitors to pop for the unabridged version.

To test out Google Maps, I drilled down on the neighborhood I know best: my own.

In my case, that would be Minneapolis' Sunset Gables neighborhood just south of Cedar Lake, and just to the East of Fern Hill in St. Louis Park.

Here's what I found:

Google Maps found (and mapped) ten foreclosed properties within about one mile.

So far, so good.

Of those, however, only two had specific street addresses; the other eight simply gave a street name, along with a push pin showing a specific location.

Chowen Ave Foreclosure? Where??

So, Google Maps lists "Chowen Ave S.", a 3 BR, 1.5 Bath home for $486,823.

The corresponding push pin locates the home somewhere on the 2900 block of Chowen, just north of Lake Street.

However, when you search MLS, there's nothing active on Chowen.

Instead, the closest home meeting that description is 2900 Chowen, a foreclosure that sold last July for a fraction of its $426,500 tax assessed value; see, "THAT Sure Went Fast (Too Fast??").

0-for-2

I had even less success finding "Inglewood Ave. S." in Fern Hill, which according to Google is a 3 BR/2 Bath home for $335,920 that it locates at the intersection of Inglewood and Sunset.

However, when I searched the corresponding stretches of Inglewood and Sunset on MLS, I found no listings, Active or otherwise, going back more than one year.

Which leaves me with the question,"where is Google getting its foreclosure info?," and this conclusion: 'if you can't use Google Maps to identify specific properties for sale -- which may not even be for sale -- what good is it?'

My answer: Google Maps is useful, kind of, to give a broad overview of which Twin Cities areas have the highest (and lowest) concentrations of foreclosures.

Assuming, of course, that Google's data is passably accurate -- for now, a big "If."

Try it Yourself

Want to try it yourself?

Here are the steps:

1. Punch in any US address into Google Maps.
2. Your options are Earth, Satellite, Map, Traffic and . . . More. (Select “More”)
3. The drop down menu gives you a check box option for “Real Estate.”
4. The left column will give you several options (You may have to select “Show Options”).
5. Check the box marked “Foreclosure.”

Good luck!

Watch this Space: 4121 W. 28th St.

New-and-Improved in Fern Hill

The Seller (my client) moved out in July.

Guess who moved in?

Not the Buyers -- their contractors.

Six months from now, this 1937 Colonial will have undergone a top-to-bottom renovation costing well into six figures.

Take a project like this, multiply by 10 (conservatively) over the last 2-3 years, and you have the ingredients for a very healthy neighborhood.

Which Fern Hill certainly is.

On Sale: Basswood Road

Chain-Reaction "For Sale" Signs

It's one of those anomalies that you see from time to time -- and that understandably gives Buyers pause: a block where every other house seems to be for sale.

At the moment, that phenomenon seems to characterize Basswood Road, a 3 block-long street just west of Cedar Lake that straddles France Ave. (all but the very east end is in St. Louis Park; the rest is in Minneapolis).

What's going on?

I see three factors at play:

One. The "clogged pipeline" effect.

Two of the four (soon to be 5!) houses on the market were originally listed more than 18 months ago.

Rather than reduce their prices incrementally when they failed to sell, the owners have been holding their ground, literally.

While that strategy can work in a rising market, in a falling or flat market it causes a home to be "marooned," overpriced and stagnant -- and gumming up the pipeline for more recent home sellers.

Two. Functional obsolescence.

Much of the housing stock in the area consists of ramblers built in the 1950's: sturdy and solid, to be sure, but now functionally obsolete in many cases.

That often means only one hall bath for all the Bedrooms (vs. a private Master Bath); a dated, too-small Kitchen; and small and too few Bedrooms.

As I've written before, while mortgages have never been cheaper, (major) remodeling dollars are especially scarce now.

Three. Generational turnover.

Several of the Sellers have been in the neighborhood for 25-plus years.

They're now empty nesters who need less space, don't want to do maintenance, and want to travel more.

In other words, it's just time for them to sell.

Having all bought around the same time, it's natural for them to now move on at the same time.

Sizing it All Up

So, what should Buyers make of all the homes for sale on Basswood now?

And should you ever steer clear when you see too many "For Sale" signs?

My answers: "not so much," and "yes, depending."

Certainly where the explanation is rampant foreclosures, Buyers are wise to stay away: foreclosures are like an undertow that pull down the value of all nearby homes.

Ditto for unalloyed negatives like new (or wider) nearby freeways, garbage incinerators, power stations and the like.

However, when other factors are at play (the case on Basswood), and the neighborhood is in a great location with good housing stock, such temporary "Seller gluts" can be great opportunities.

"Calhoun Lake??" Is that by Isles Lake?

Neighborhood Expertise -- and Lack Thereof

Want a sure sign that a Realtor doesn't sell much by the City Lakes?

They refer to "Lake Calhoun" as "Calhoun Lake" in their marketing materials.

Fish (er, Realtor) Out of Water

It may be forgivable to confuse Forest Lake (the city 40 miles north of the Twin Cities) with Lake Forest (the St. Louis Park neighborhood just west of Cedar Lake and north of Fern Hill).

But getting "Lake Calhoun" (pictured above) wrong is pretty glaring -- just imagine someone calling it "Minnetonka Lake," or "Superior Lake."

In turn, a Realtor who doesn't know the local landmarks is often a sign that the home owner hired a family friend or relative, opting for a personal connection over local expertise.

P.S.: If instead it's just a typo -- it's a big one.

What's Selling . . . Fern Hill

Where: 2537 Joppa, in St. Louis Park's Fern Hill neighborhood, 2 blocks west of Cedar Lake.

What: 1 1/2 story home built in 1950 with almost 2,000 finished square feet.

How (much): listed for $285,000

When: market time = 2 weeks (listed August 27); scheduled to close Oct. 15 (currently "Pending" on MLS)

Who: sold by Ross Kaplan, Edina Realty City Lakes; co-listed by Linda Platt and Jonathan Spar, Edina Realty

How did this 1950, 1 1/2 story two blocks from Cedar Lake sell in two weeks?

For starters, it helped that it was . . . two blocks from Cedar Lake.

So did an attractive list price, $285,000, that discounted for needed updating -- and then some.

Plus nice curb appeal, a .24 acre lot, and an especially open Living and Dining Room with huge picture windows (pictured above).

Other Factors

So what about the tax assessed value, $404,400?

That certainly didn't hurt the Buyer's perception of value.

However, as I've blogged previously ("Selling Price as % of Tax Assessed Value"), the tax value can be artificially high, especially when it's been years -- or decades -- since the home has changed hands (as was the case here -- the Seller bought the home in 1975 . . . for $46,000!).

What's Selling . . . Fern Hill

From Dowager to Belle of the Ball

Where: 2820 Huntington Ave. South, in St. Louis Park's Fern Hill neighborhood
What: top-to-bottom renovation of what had formerly been a 1 1/2 story home with less than 2,000 FSF
When: listed August 6; closed Sept. 20.
How (much): asking price = $859,900; sold price = $840k (purchased last Winter for $390,000).
Who: listed by Mike Sward, Edina Realty City Lakes

Talk about leap frog: what had been the dowager of this pretty block in Fern Hill is now the belle of the ball.

You name it, they did it: dramatically opened up space (see, "What do you do with dead space?"); four all new baths; a spectacular new Kitchen; a widened, 2 car garage in place of the original one car; 3 new dormers; a brand, new lower level with 1,700(!) finished square feet (and over 4,500 total in the re-done home); and a new mud room.

And on and on.

The result?

A quick sale (after about a month of market time) for virtually full price, followed by an even quicker closer (one week).

What do you do with dead space?

(Knowing When to) Open it Up

What do you with a space, like the one pictured above, that feels claustrophobic and cut off from the rest of the home?

Open it up.

So, what was once a seldom-used Den -- technically, a legal Bedroom -- is now annexed to the sweeping, new Living Room.

In place of the confining walls are handsome columns that double as structural support.

The makeover was part of a top-to-bottom, 5 month transformation at 2820 Huntington, in St. Louis Park's Fern Hill neighborhood (see, "What's Selling . . . Fern Hill").

$11,000 per Block?

Putting a Price Tag on

Proximity to Cedar Lake

A client of mine says his engineer son-in-law has done a regression analysis calculating the premium associated with proximity to Minneapolis' Cedar Lake.

His number?

$11,000 per block.

If that's correct, that's a very valuable number to have, because lots of Realtors, appraisers -- and their clients! -- spend a lot of time and money trying to quantify just such variables.

"Ceteris Paribus"

And yet . . . as I discussed in The Art of Doing Comp's ("How Big a Premium for Small Lakefront?"), isolating and quantifying such adjustments is more difficult than it sounds.

That's because it's never the case -- at least outside new, tract developments -- that two homes, identical in every respect but their location, sell at exactly the same time.

To use a fancy term, they flunk the "ceteris paribus" test ("everything else held equal").

So, if the two homes are the same size and style, one's much more updated; if they're equally updated, one's substantially bigger; if they're the same style, size, and condition, they sold two years apart, in different market conditions.

Theory vs. Practice

Which doesn't mean that Realtors and others don't estimate premiums and discounts, for many variables, every day.

It's just that it's more a "gut," judgment call than a hard-and-fast objective number.

P.S.: my number for Cedar Lake proximity? I'd start with 2% per block, but would tweak that depending on which block (some are clearly nicer than others).

I also know that the East part of Fern Hill -- between Monterey and France -- commands a bigger premium than "West" Fern Hill, and that a handful of homes on Glenhurst and Huntington with lakeviews command much bigger premiums.

Fern Hill for (Just Over) $200k!

Where: 2615 Monterey in St. Louis Park's Fern Hill neighborhood
What: 2 BR/1 Bath stucco cottage on a private, 140' deep lot.
Who: listed by Ross Kaplan; Edina Realty City Lakes
How much: $209,900
When: market time = 30 days

You'll love this updated, character-filled stucco cottage in high-demand Fern Hill.

It has over $20k in recent improvements, including a new roof, all new windows, interior painting, and gorgeous, refinished hardwood floors.

Just down the street from Twin Lakes Park; blocks to Cedar Lake.

You can't live on a nicer block -- in a nicer area -- for less.

Please call or email me for more info.

New List in Fern Hill

Fern Hill for (Just Over) $200k!

Where: 2615 Monterey Ave. in Fern Hill
What: 2 BR/1 Bath stucco cottage just down the street from Cedar Lake
How (much): $209,900
When: on market 2 days (came on Monday)
Who: Ross Kaplan, agent; Edina Realty, broker

You won't find a more affordable single family home closer to Cedar Lake than this stucco cottage.

Highlights include a ton of charm and character (maple floors, custom moldings and mill work, clawfoot tub); all new windows; and an especially deep lot (140 feet) perfect for pets, gardening, or storing a kayak (or two!).

This home's perfect for a first-time Buyer, someone downsizing, or as a condo alternative.

I'll be there this Sunday from 2-4 p.m. for the first open house.

Or, please feel free to call me (612-925-7701) to set up a private showing.

"How Long Will My House Take to Sell?"

The Second Most Popular Question in Real Estate

What's the second most popular question in real estate? (the first being, "what's my home worth?")

"How long will it take to sell my home?"

Unless the Realtor is going to buy it, the honest answer is, "I don't know."

However, it is possible to give the owner an estimated range, based on the following four, inter-connected variables:

One. Price.

The higher, the longer.

Locally, for example, there is currently a two year supply of $1 million-plus homes for sale in Edina.

If you are contemplating selling one . . . that's how long you can expect to be on the market.

By contrast, smaller, more affordable homes in popular Twin Cities neighborhoods like Linden Hills and Fern Hill take an average of 3-4 months to sell now.

Lately, homes under $250k or so in particular tend to sell fastest because they appeal to first-time home Buyers, who by definition don't have to sell another home in order to buy.

Two. Condition and updating needs.

As I've blogged previously, homes that require major updating (over $100k) have been tough sells in today's market because Buyers have to have that money in reserve.

Cheap mortgages -- and they're now well under 5% -- don't make it any cheaper, or easier, to tackle a major remodel.

Three. Relative Value.

Homes that are well-priced, staged, and marketed relative to their peers sell faster.

Always have, always will.

Four. Broad or narrow appeal, or, "the quirky factor."

Yes, it's true that "all real estate is unique" -- but some real estate is more unique than others.

It's also the case that there's "good unique" and "bad unique."

So, views of the Minneapolis skyline from the west side of Lake Calhoun would be an example of the former.

A home with an odd floor plan and a hodgepodge of architectural styles, the latter.

The common denominator in all four of the above variables is, how broad or narrow is the potential pool of Buyers for the home in question?

As a general rule, the broader and deeper the pool of prospective Buyers . . . the shorter the market time.

Too Much of a Good Thing?

When Less is More

Guess how many Bedrooms and Bathrooms there are in this 3,000 square foot Fern Hill home:

A. 3 BR/2 BA

B. 4 BR/2 BA

C. 4 BR/3 BA

D. 6 BR/5 BA

Answer: D

I haven't been inside, so I can't say for sure.

But you'd certainly guess that a home this size with so many bedrooms and baths feels cramped, if not claustrophobic.

Taking a home from 2 Bedrooms to 3 certainly adds value.

You could even argue that going from 3 Bedrooms to 4 does, too.

However, somewhere between that 4th and 6th(!) Bedroom -- especially in a medium-sized home -- the law of diminishing returns kicks in . . . or begins to operate in reverse!

P.S.: One possible explanation? The home's owned by a contractor -- who didn't know when to call it quits.

Late June Housing Statistics

Post-April 30 Hangover

Here are some late June housing statistics (analysis costs extra). All info is for Edina Realty.

--Drop in showings since expiration of Buyer tax credits April 30: 40%
--Drop in "Pending" sales since expiration of Buyer tax credits: 40%.
--Percentage of Buyers who are first-time: 48%
--Percentage of homes sales under $250k: 80%

The narrative that accompanies the foregoing? Pretty self-evident.

P.S. Statistical averages are just that. For example, the neighborhoods close to Cedar Lake in Minneapolis (Fern Hill, Lake Forest, Sunset Gables) have been bucking the over all trend, with 8-10 pending sales in just the last two weeks.

Fern Hill Extreme Makeover

Playing Housing "Leapfrog" on Huntington

Where: 28xx Huntington Ave. South, in St. Louis Park's Fern Hill neighborhood

What: whole house renovation

Who: Mike Sward, agent; Edina Realty, broker

When: due back on market late Summer

How much: projected selling price = low $800's

No, you won't recognize this home driving by -- it won't look like this for a few more months, when the new dormers are added.

For now, it's a hive of dumpsters and contractors, who are busy remaking this 1949 Fern Hill Cape Cod.

When it's complete, the home will go from the runt of the block (1,949 FSF; sold price $390k this March) to the "Charles Atlas," complete with all the bells & whistles.

FRIDAY(!) Open House

Tax Credit Countdown

When: 4-6 p.m. today
Where: 4121 W. 28th St (28th & Inglewood Ave. So.), in St. Louis Park's Fern Hill neighborhood
What: 4 Bedrooms (all up), 3 Bath 1937 Colonial with 3,000 square feet
How much: $549,900
Who: listed by Ross Kaplan, Edina Realty City Lakes

Will there be a burst of last minute home purchases ahead of today's tax credit expiration?

We'll find out.

Just to give procrastinators one last opportunity, I'll be at my listing at 4121 W. 28th St. (28th & Inglewood) in St. Louis Park's Fern Hill neighborhood from 4 - 6 p.m. today.

Highlights -- besides the value, location, and curb appeal -- include a beautiful, wood-paneled Family Room; four Bedrooms up; formal Living and Dining Rooms; and a ton of charm and character throughout.

Oh, yes: and an attached, 3-car garage with tons of extra storage space, plus a Gazebo in back.

P.S.: For more on whether today's deadline is a big deal or not, see "It's a mad dash for home tax credits," in today's Pioneer Press. Reporter Chris Snowbeck surveys several local agents -- including yours truly -- about whether the tax credits are going to expire with a bang or a whimper.

No More "No Name" Neighborhoods

Neighborhood Name as "Brand"

Once upon a time, people lived in St. Paul, or Minneapolis, or St. Louis Park.

Now, they live in Fern Hill, Birchwood, or Sorenson (all neighborhoods in St. Louis Park).

Overall, as Martha Stewart would say, "that's a good thing."

Especially if the neighborhood name isn't just marketing, but reflects an active neighborhood association, and a growing sense of neighborhood identity.

As a Realtor, I can attest that Buyers value -- and pay up -- for those things.

Just look at prices in Linden Hills!

Extreme Makeover - Fern Hill Edition

Worst-to-First on Huntington

You're not likely to recognize the home pictured above -- 2820 Huntington Ave. South, in St. Louis Park's Fern Hill neighborhood.

And no, it's got nothing to do with the snow being gone.

Rather, it's because there are multiple dumpsters in front, and the place is swarming with contractors.

Extreme Makeover

What's going on?

The new owner, apparently a spec builder/remodeler, is doing a major addition upstairs (finishing the expansion, and bumping it out towards the back of the yard), as well as totally renovating the first floor and widening the garage from one car to two.

When the work is complete, the home is likely to be put back on the market somewhere around $800k, probably sometime in late Summer.

That's more than double what the buyer paid for it, $390k, and still leaves a nice profit even after subtracting what is sure to be $250k or more in labor, material, and financing costs.

Makeover Economics

Extreme makeover candidates share many of the same attributes as tear-downs, about which I've blogged numerous times previously ("Tear-Down Economics," "Contender . . . or Pretender?" "Attributes of Tear-Down Neighborhoods").

Namely, they have the potential to go from "worst to first" in a neighborhood where the ceiling on homes is much higher than the asking price. (I've also referred to this phenomenon as "playing tear-down leapfrog").

In this case, Huntington has a huge, 2,000 square foot foundation; sits on an almost quarter-acre lot; and is on a block where the top end is high six figures.

Check, check, and check.

"Final Cut," Realtor Version

Who Gets to Exercise "Editorial Control?"

"Final cut" in the movie business means who gets final say over the editing process.

Directors want it because it assures them creative control; the studios want it because they're bankrolling the film --- and want it to make money.

Something similar goes on in residential real estate with all the marketing materials a good Realtor generates for a listing; that starts with how the home is presented on the Multiple Lising Service ("MLS"), and can include various postcards, brochures, flyers, and ads (print and online).

While I always welcome clients' input -- indeed, it's indispensable for truly capturing a home's essence -- I'm ultimately in charge of composing, editing, etc.

There are two reasons for that.

One. Expediency.

It's not unusual for me to work on a high-end marketing piece over the course of several days.

That includes drafting the copy, selecting the photos, doing the layout, reviewing multiple proofs, etc.

For all but the basic pieces, that process is done in coordination with a professional desktop publisher (thanks, Nobu!).

"I Can't Believe That's My House!"

The way life is these days, the proofing and editing process resembles a marathon game of online ping-pong.

I'm sure there's the stray client who would like to be cc:d on the most recent proof at 2 a.m., but even if they were, it would slow down the process unacceptably.

Two. I'm good at it -- and so are the photographers, desktop publishers, etc. I work with.

In fact, my marketing prowess is why clients hire me -- that, and the fact that they have their own jobs to focus on; I'm a good negotiator; have an attorney's knack for drafting contracts (I was one); have an excellent track record, great references, etc.

My clients always know that they'll be the first to see the final product, and, on the rare occasions that there's a mistake or omission, will immediately correct it.

Usually what I hear, though, is an incredulous "I can't believe that that's my house!!"

P.S.: the photo above is the stunning(!) Family Room in my new listing at 4121 W. 28th St. in St. Louis Park's Fern Hill neighborhood.

If you want to see it in person, drop by the Broker Open today from 11 a.m. to 1 p.m., or, the Open House this Sunday from 1 p.m. to 3 p.m.

Real Estate "Insider Trading"**

Best Time to Sell? When No One Else is

Where: 27xx Raleigh Ave. South, in Fern Hill's St. Louis Park neighborhood

What: Mint 1947 rambler with 3 BR/2BA and 1,800 square feet

How (much): $445,500 list price

When: on market Monday (12/7)

Who: listing agent - Josh Kaplan; broker - Edina Realty

If everyone's taking their home off the market for the slow holiday season, what should a savvy Realtor who wants to sell their own home do?

Put their home on the market.

That's exactly what's going on at 27xx Raleigh, in Fern Hill's St. Louis Park neighborhood. The home hit the market on Monday.

The owner-agent, who works in my office, requested that I mention that the home is in "fabulous" condition, and a great value.

There you go, Joseph!

**No, a Realtor selling their own home isn't really "insider trading."

Rather, I'm referring to the phenomenon of doing what the supposed "insiders" are doing.

In the stock market, that means buying when the pro's -- corporate insiders -- are buying, and selling when they're selling.

It's no different in real estate.

The strategy recalls one of my favorite Warren Buffett lines, i.e., you should be cautious when everyone's bold, and bold when everyone's cautious (my paraphrase).

Don't Go By Asking Prices

Sold! (For 1/3 of Tax Assessed Value)

What: 3BR/3BA walkout rambler with almost 2,600 FSF

Where: 2625 Quentin Ave. South, in St. Louis Park's Fern Hill neighborhood

How much: originally listed for $226,800 on Aug. 5.

When: closed Nov. 18 (Thursday); just posted on MLS this morning.

"Exhibit A" under the category, "don't go by asking price" would be this Fern Hill rambler.

Originally listed for $226,800 back in August, this foreclosure had a tax assessed value of $387,500. That consisted of $158,700 for the land, and $228,800 for the building.

The bank-owner took two, 5% price cuts, then finally got a deal in late October.

It closed Thursday.

So . . . . drum roll . . . . what did the Buyer pay?

Try $130,000.

No, that's not a typo.

Why So Low?

The short explanation is "supply and demand."

The longer explanation is that the house is a tear-down, due to the worst mold damage I've personally ever seen (I showed the house multiple times).

So, you toss out the building value, and focus exclusively on the land.

As I've blogged previously about valuing tear-downs, the analysis -- based on back testing dozens of Twin Cities deals the last 6-8 years -- is to determine the top of the block, add 20% for well-done, new construction, then divide by 3.5.

In this case, the corresponding formula is $400k x 120% = $480k; $480k divided by 3.5 = $137k.

Bingo! (Take off a little extra because of tight credit for new construction, and a soft market for more expensive homes.)

P.S.: and yes, you need to know the "comp's" -- which I do -- to know that the top of the block is $400k.