Christmas Eve Sales

Stocking Stuffer

Where: 48xx Portland Ave. South, in South Minneapolis

When: went pending today (Christmas Eve)

What: 5 BR/3 Bath stucco bungalow with over 2,200 square feet

How (much): asking price - $209,900

Who: listed by Roman Dziuba, Minnesota Realty

Every year, clients contemplating listing their homes around Holiday time ask about the wisdom of going ahead now vs. waiting till the market accelerates a bit (typically, early February).

My stock answer is that, in a big, metropolitan area like the Twin Cities (13 counties; total population 2.5 million), homes sell every day of the year -- including Christmas Eve!

I never actually bothered to check that statement; rather, I always simply assumed that it was true.

Well, it is.

I just ran a metro-wide MLS search for homes that went "Pending" today, and found 14 such transactions (including the home pictured above).

Happy Holidays!

$1 Million Lake of the Isles FSBO

Going it Alone

Where: 16xx 26th St. West, just east of Lake of the Isles in Minneapolis

What: 3 BR/4BA 1921 Colonial with 3,400 FSF

Who: listed by owner

How much: asking price is $1.195M

When: originally listed July, '08 (market time now = 16 months)

It's rare to see upper bracket FSBO's ("For Sale By Owner") -- this one's asking $1.195M -- for a couple reasons.

The biggest one is simply the fact that, as properties become more expensive and (presumably) unique, the "value-added" of good marketing goes up.

Put it this way: which can you say more about, hamburger or filet mignon?

Filet Mignon . . or Hamburger?

At $1 million plus these days, your home had better be filet mignon, not hamburger.

That means great location, great condition, and thoroughly updated. It also means tons of charm and character.

Not only must the home have all those things -- they must all be shown off to maximum effect to prospective Buyers.

In turn, that means professional staging, professional photography, professionally written literature and ad copy, not to mention a generous -- and well-deployed -- ad budget. (Note the frequency of the word, "professional".)

Oh, yeah: and professionally priced -- by a Realtor who knows the comp's, not an appraiser who's never set foot in your zip code (or a homeowner who "knows" that his home is worth more than a neighbor's . . . that sold two years ago).

Time is Money

The other reason owners of million dollar homes tend not to try to sell it themselves is that they're too busy working to pay for them.

Even with jumbo interest rates at 5.75% or lower, the "nut" for a $1 million-plus home -- including property taxes -- can easily exceed $6k-$8k per month. That's on top of the $100k-$200k downpayment you'll need.

Who earns that kind of money now?

Partners at bigger law firms, doctors with lucrative practices, senior business executives, etc. Not exactly the kind of folks likely to spend their weekend holding open houses.

Which might explain why the owner of this house is a FSBO; according to tax records, they purchased the home in 1986 for $204k.

So, it's just possible they're not a high-powered lawyer, doctor, etc.

40% Below Tax Assessed Value

Where: 16xx Cedar Lake Parkway (just northwest of Cedar Lake in Minneapolis)

What: 3 BR/2BA Contemporary with almost 3,200 finished square feet.

How much: listed for $320k

When: originally listed in Oct. '08 for $549k.

Who: listed by RE/MAX Results; agent is Michael Kohler

In today's market, it's increasingly common to see homes for sale trumpet that their asking price is below the tax assessed value.

It it is not common to see a home selling for almost 40% -- or more than $200k -- below tax assessed value, as the home pictured above is.

It comes as hardly a surprise, then, that this a short sale.

The home originally listed in October, 2008, for $549k.

December Case-Shiller Numbers

December S&P/Case-Shiller:
Minneapolis Down 18.5%

The latest S&P/Case Shiller numbers (for December) are out, and to no one's surprise, they're dreadful: all of the nation's 20 largest housing markets show decreases, from the merely bad (Dallas, Denver) to the shocking (Las Vegas, Phoenix).

Minneapolis shows an 18.5% drop from a year earlier.

Before you jump to the conclusion that this is dramatic new evidence of market deterioration, keep in mind two things:

One. Case-Shiller is a month behind other housing statistics. Locally, the Board of Realtors is already reporting January sales activity.

Two. Foreclosures are now dominating sales activity in many markets nationally, including the Twin Cities.

Foreclosure are not exactly known for being in pristine condition, or located in the toniest neighborhoods.

As I've blogged previously (yes, it's turned into a verb, like "Google"), when consumers all switch to buying $1.89 gallons of milk at Wal-Mart from $3.49 gallons at "Deluxe Groceries," it doesn't mean that the price of milk has dropped 46%. Rather, the product mix has changed.

That's equally true in today's housing market.

Hot Property (Really!)

Want a Deal? How about *82% off?

Where: 22xx Vincent Ave. North; Minneapolis
How much: $42,500
Key Stats: 4BR/2BA; 1,363 FSF
Last sale*: $240,000 (6/2006)
Tax assessed value: $165,000

No, it's not in Edina or Wayzata. And, yes, it's a foreclosure, with all the headaches that can be involved (including less than pristine condition).

However, this brick-and-stone rambler is just minutes from downtown Minneapolis, a block off stately Victory Memorial Drive just northeast of Theodore Wirth.

Apparently, the market agrees: another agent who has an offer in told me that he's competing with eight(!) other offers.

Spotlight on Value: 2905 Benton Blvd.

Where: 2905 Benton Blvd, Minneapolis
How much: $739,900
Tax value ('09): $849,900
Original asking price: $925,000
Originally on market: 4/28/09

One year ago, this home likely would have fetched in the mid-$800's (I should know: I sold a very similar home, with fewer updates and farther from the lakes, for $790,000).

Fortunately for my Seller, at the time Benton was priced at $925,000. Located between Minneapolis' Cedar Lake and Lake of the Isles, it has 4 BR's, 4 Baths, and over 3,000 square feet. Nearby homes are worth anywhere from high six figures to north of $3 million.

Today, this home is suffering from a double-whammy of weak upper bracket demand, and excess market time. As Realtors and would-be Sellers both know, overshooting the correct asking price in a declining market often requires aggressive price cuts later on.

At $739,000, I think the Seller has now dropped enough to make this home a compelling value . . .