Revisting 1415 June Ave.

Want to Sell This One?
Help Defray Property Taxes

I originally posted about 1415 June Ave. -- in Golden Valley's South Tyrol Hills neighborhood -- last Summer ("$700k Below Tax Value").

At the time, the asking price was $799,900 -- against a tax assessed value of $1.504 million.

Thanks to that latter number, the home carries an almost $24,000 annual property tax bill.

Which likely explains why it's still unsold almost six months later -- and the asking price is now $784,900.

Unsolicited Advice

You'd certainly expect the property tax bill to drop dramatically once the home sells so far below its assessed value.

However, it's not a slam dunk.

That's because tax assessors consider foreclosures to be distress sales (true), and therefore not necessarily reflective of fair market value (patently false).

Put it this way: if anyone thought 1415 June was worth more than $784,900 . . . . they've now had almost two years to snatch it up (the home originally came on the market in March, 2009, at an asking price of $1.679 million).

To entice Buyers who can afford the home but not the attendant property taxes, here's my advice to the bank-owner: pick up some or all of the property tax bill for a period of time.

Sellers now routinely pay up to 3% of Buyer's closing costs.

In this case, what the Buyer really needs help with -- at least temporarily -- are the property taxes.

Open House Today(!), 2:45 p.m. to 3:45 p.m.

2:45 p.m. to 3:45 p.m.??

Where: 1340 Fairlawn, in Golden Valley's South Tyrol Hills neighborhood
What: 4 BR/3 Bath '50's split-level with almost 3,600 FSF; built like a tank and very quiet! Set on a pretty, .33 acre lot.
How (much): $387,500
Who: listed by Ross Kaplan; broker is is Edina Realty
When: 2:45 p.m. to 3:45 p.m., Thursday, Sept. 2

What gives with the odd time?

That's when the Minneapolis Jewish Day School -- just down the street from Fairlawn -- lets out.

Not coincidentally, that's when about 300 cars go past on Cedar Lake Rd, just to the south.

This well-maintained home is a great candidate for families who send their kids to the school, and want a shorter commute.

Or anyone who wants a great deal on a well-built, family-sized home in a terrific, close-in neighborhood (about 8 minutes to Downtown Minneapolis; less to the Lakes).

P.S.: And no, holding an open between 7:45 a.m. and 8:30 a.m. (the school's drop-off window) didn't seem very appealing.

425 Idaho Ave. North in Golden Valley

New Lions Park Listing

Where: 425 Idaho Ave. North, Golden Valley (Hopkins schools)

When: new on the market this morning! First open this Saturday, 1-3 p.m.

What: Well-appointed 3 BR/3 Bath Split-Level with 2,100 FSF on .35 acre

Who: listed by Ross Kaplan, Edina Realty City Lakes (broker)

Please stop by my open house this Saturday from 1 p.m. to 3 p.m. at 425 Idaho in Golden Valley (just west of Highway 55 and 100).

This nicely updated Split-Entry features beautiful hardwood floors; a vaulted Master Bedroom with 3/4 Bath; and a spacious lower level great for kids -- or a home office.

Great setting and location, too: a gorgeous, .35 acre lot in in private Windor Woods. Walking distance to Lion Park and Golden Valley Commons; minutes to downtown Minneapolis, Uptown, and the city lakes.

Listing Prices & "Leaving Room to Negotiate"

No Discount on This One

In a Buyer's market like today's, it's not unusual for gun-shy Sellers to want to "pad" their initial asking price.

Their rationale?

No matter where they set their initial asking price, aggressive Buyers are simply going to discount further from there.

So, why not pick a listing price that "leaves a little room to negotiate?"

There are three reasons that's not a good idea:

One. Self-selected peer group.

If you set your price too high, your home will be compared to more impressive homes asking the same price. And found wanting.

So, yes, you may have "left yourself room to negotiate."

But that hardly matters if there aren't any offers (or even showings).

Two. Even in a Buyer's market, well-priced homes can sell quickly, for above asking price.

Case in point: 5035 Glenwood Ave. (pictured above) in Golden Valley.

Listed in late March for $289,000, it sold -- in multiple offers -- the first week.

Ultimate selling price: $305,000.

Three. No Realtor can promise their client that they won't receive lowball offers (for all I know, the owner of 5035 Glenwood received lowball offers, too).

But lowball offers are a lot easier to repel when there is also a full-price offer -- or even better, multiple offers above list price -- on the table.

For Sellers, negotiating leverage is all about how many prospective Buyers are interested in your home.

If you price too high, the answer is usually few . . . or none.

P.S.: another fringe benefit of pricing well, and attracting broad interest: Buyers tend to pull their punches when it comes to negotiating any inspection issues.

Dramatic Price Cut! Open Today

Deceptive Curb Appeal

Where: 1340 Fairlawn Way in Golden Valley's South Tyrol Hills
What: 4 BR/3BA '50's split level with almost 3,600 FSF; rock-solid, nicely updated!
Who: listed (and hosted) by . . . yours truly
When: 12:30 p.m to 2:30 p.m. this Sunday (4/18)
How much: list price -- $411,500 (just reduced from $434,900)

This is a lot of house, in a great neighborhood. And for anyone stuck in the maw of the Crosstown Project's daily gridlock -- a blissfully short commute to downtown Minneapolis (about 7 minutes, tops).

I hate to use the term, "not a drive by," but . . . it isn't. (Realtors use the term when the curb appeal doesn't do the interior justice.)

In particular, the almost-600 square foot Great Room (pictured above) features a Fireplace with granite surround, skylights, and a vaulted ceiling.

Hope to see you!

Deep Discount in South Tyrol Hills

50% Off Original Ask

There may be another home in the Twin Cities that's been on the market longer, or has been discounted more from its original asking price than this one.

But if so, I'm not aware of it.

Originally listed at $1.395M in September, 2007 (yes, that's 32 months ago!), this postcard-pretty 1937 home -- located in Golden Valley's South Tyrol Hills neighborhood -- is now asking $699.5k.

Now that's patience (or stubbornness).

So, is it finally a bargain?

Who wants to know??

Psst!! Want a Short Commute?

Open This Sunday 3:00 - 4:30 p.m.

Where: 1340 Fairlawn Way in Golden Valley's South Tyrol Hills

What: 4 BR/3BA '50's split level with almost 3,600 FSF; rock-solid, nicely updated!

Who: listed (and hosted) by . . . yours truly

When: 3 p.m to 4:30 p.m. this Sunday (4/11)

How much: list price -- $434,900

This is a lot of house, in a great neighborhood. And for anyone stuck in the maw of the Crosstown Project's daily gridlock -- a blissfully short commute to downtown Minneapolis (about 7 minutes, tops).

I hate to use the term, "not a drive by," but . . . it isn't. (Realtors use the term when the curb appeal doesn't do the interior justice.)

In particular, the almost-600 square foot Great Room features a Fireplace with granite surround, skylights, and a vaulted ceiling.

Hope to see you Sunday!

South Tyrol Open House -- Stop By!

Where: 1340 Fairlawn Way in Golden Valley's South Tyrol Hills
What: 4 BR/3BA mid-century split level with almost 3,600 FSF
Who: listed (and hosted) by . . . yours truly
When: 1 p.m to 3 p.m today
How much: list price -- $444,900

This is a lot of house, in a great neighborhood.

I hate to use the term, "not a drive by," but . . . it isn't.

(Realtors use the term when the curb appeal doesn't do the interior justice.)

1st Open Sunday!

South Tyrol Hills Sleeper!

Where: 1340 Fairlawn Way, in Golden Valley's South Tyrol Hills neighborhood
What: Sprawling 4 BR/3 Bath Mid-Century Split-Entry with almost 3,600 finished square feet -- including a 600 (!) sq. ft. Great Room.
How much: $444,900
When: market time -- 3 days
Who: listed by Ross Kaplan, Edina Realty - City Lakes

If you're looking for a dynamite, well-built family home in a close-in location, please come by my open house this Sunday from 1:30 to 3:30 p.m.

The highlight of the home?

The huge Great Room, featuring vaulted ceilings, an (Italian) granite Fireplace, and skylights.

A great family home -- and a great value!

(If you don't know the area, South Tyrol Hills is south of 394 and east of 100).

Unseasonal Photos

"That Was Some October Snowstorm!"

Where: 14xx June Ave. South

What: 4 BR/5 Bath home with over 6,000 FSF in Golden Valley's South Tyrol Hills neighborhood

How (much): $1.139M ($10k price cut today)

Who: listed with RE/MAX Results

It's certainly possible that the photo above was taken at the height of the October snowstorm we had about a week ago.

Or . . . it was taken prior to when the home was first listed, for $1.679M, last March.

The marketing verbiage indicates that the home is a short sale -- which pretty much clinches it.

"An Inconvenient [Housing Market) Truth"

Framing the Choices

In politics, it's often said that "whoever defines the terms of debate, wins."

The equivalent in real estate appraising would be, "whoever decides the geographic area for choosing the comp's, defines home values."

What does that mean?

One of the challenges choosing and analyzing "comparable sold properties" (comp's) is coming up with three, similar properties nearby that have sold recently. Traditionally, Realtors and bank appraisers look back no more than six months; lately, there is a preference for three months or even less.

Unfortunately, that requirement bumps up against what might be called an "inconvenient housing market truth": there are many, many small neighborhoods in the Twin Cities -- some with as few as 100 homes -- that have their own distinct character and identity -- and not a lot of turnover.

If you want to intelligently price a home in one of these smaller neighborhoods, you have to consult previous neighborhood sales. However, because the neighborhoods are so small, there may not be 3 good comp's. In fact, it's not unusual to have to go back a year or even longer to find a similar, nearby sale.

But then, by definition, the previous sale is no longer a comp.

Comparing (Honey Crisp) Apples to (Cortland) Apples

What then?

You have to go farther afield.

Just to illustrate the challenges, consider the Lion's Park neighborhood in Golden Valley.

Lion's Park is located between 169 on the west, 394 on the south, Hiway 100 on the east, and Hiway 55 on the north. Built mainly in the '50's and '60's (with a sprinkling of recent tear-down's), the neighborhood includes perhaps 100 homes that encompass a surprising range of styles and sizes.

So, if you're trying to price a Lion's Park home, the odds are good you'll have to go outside of Lion's Park to find one or more comp's.

But which direction?

Northern Golden Valley, just to the north across Highway 55, borders Crystal and New Hope and is perhaps 20% less expensive than Lion's Park.

Meanwhile, North Tyrol Hills, just to the east of Lion's Park (across Highway 100) is perhaps 20% more expensive.

My guess is that a majority of the time, when a home doesn't appraise, it's because the appraiser is doing the equivalent of pulling comp's from the equivalent of Northern Golden Valley rather than the counterpart to Tyrol Hills.

"Top-Heavy" Inventory

Jumbo Prices, Jumbo Selection

I'm not a big wine drinker, but I've always believed that wine prices were characterized by a "law of diminishing returns."

In other words, while an average $8 bottle might be twice as good as an average $4 bottle, a $16 bottle probably isn't twice as good as $8 -- and $32 almost certainly isn't twice as good as $16 (I'm sure there are many wine aficionado's who would beg to differ).

Today's housing market seems to be characterized by the opposite phenomenon.

That is, the higher up you go, the better value you find. (see also, "$1 Million Buys a Lot of Home - Again").

$500k as Dividing Line

So, to go back to my wine example, at the moment a $750k house seems to offers more than twice the value as $375k, and $1.5M offers more than twice the value as $750k.

Just to confirm my own, very unscientific "gut sense" about today's housing supply, I ran a search segmenting housing supply by $100k intervals up to $500k, with everything over that lumped together.

I chose $500k because that's effectively the break point between homes that can be purchased with conventional financing (under $417k), putting 20% down, vs. jumbo loans, which are more expensive and difficult to obtain.

For my search area, I chose a broad swath of Minneapolis and close-in west suburbs; the boundaries were roughly Highway 55 on the north, Minneapolis' city lakes on the east, 494 on the south, and between 494 and 169 on the west. That pulled up 866 single-family listings, including homes in Minneapolis and parts of Golden Valley, St. Louis Park, Hopkins, Minnetonka, and Edina.

Here's the distribution I found:

Single family homes under $100k: 4

$100-$200k: 71

$200k-$300k: 212

$300k-$400k: 144

$400k-$500k: 92

over $500k: 343

What are the implications of this?

If you're a Buyer, and you can afford to move up in price, you'll avail yourself of a much greater selection -- and presumably, softer prices.

If you're a Seller with a more expensive home . . . you have lots of competition.

To stand out, you'll need to out-stage, out-market -- and yes, out-price -- your peers.

Home Focus: 110 Kentucky No. (Lion's Park in Golden Valley)

"No Surface Left Untouched"

Where: Lion's Park neighborhood in Golden Valley (west of 100, between 394 and 55)
What: almost 2,500 totally remodeled square feet, 3 Bedrooms, 3 all new baths; great floor plan and flow
When: Broker open -- 11 a.m. to 1 p.m. (6/16); public open -- this Sun., 2 p.m. - 4 p.m. (6/21). Days on market: 3
How much: $439.9k
Who: listing agent - Ross Kaplan (desk: 612-925-7701)

This updated, Golden Valley two-story is perfect for the family looking for Hopkins schools, in a terrific suburban setting, or, for professionals who want to be close to the city, but need a little more elbow room (the lot is .29 acre, with a deck, fenced backyard, and old-growth trees).

Please feel free to stop by either tomorrow or Sunday!

Foreclosure "Wipeout's" Skew Housing Market Stat's

Where: 328 Burntside Drive, Golden Valley
What: 6 BR/5 BA; 4,407 FSF
How much: $369,900
Last sale: $899,000 (3/8/07)
Tax assessed value: $757,700

Just like not all stocks have dropped equally in a market now down more than 50%, not all homes or neighborhoods have suffered equally.

In fact, one of the reasons why the Twin Cities overall is down about 25% from the 2006 peak is that, while many homes have suffered relatively small price declines, others have been near wipe-outs.

Call them the "Citigroup's," "General Motors," and "Fannie Mae's" of the housing market.

The home pictured above, 328 Burntside, is a good example of the latter group.

Sold last for $899,000 in March, 2007, its new asking price of $369,900 reflects an almost 60% drop -- and less than half(!) the current tax assessed value. And that's just the asking price; the ultimate selling price could very well be lower (because I haven't been in, I'm not going to venture a guess).

Typical of the homes that have dropped the most, it's a foreclosure.