Recipe for Multiple Offers: 1928 Fremont Ave. South

21% Over Asking Price!

Take an A+ location in Minneapolis' tony Lowry Hill neighborhood, strategically located in between Downtown Minneapolis and picturesque Lake of the Isles.

Add a huge, 4,800 square foot all-brick triplex.

Then put it on the market for $314,900 -- a whopping $351,600 below tax assessed value of $666,500.

What do you get?

Lots of Buyer interest -- and ultimately a sales price well above the asking price, or in this case, $380,547.

The deal closed last week.

And yes, it was a bank-owned foreclosure; it was first listed 3 years ago -- as a potential short sale -- for $695,000.

I discussed some of the shenanigans that took place when it first came (back) on the market in October in this post, "Hmm . . . I Wonder Where That Lockbox Key Went??"

Year-End Pick-Up in Activity

The Limits of Statistics
in Valuing Homes

It's only Wednesday, and I've already fielded three calls this week from appraisers wanting "scoop" on recent, closed sales that I've handled.

A year-end pick-up in deals?

Well, that, too.

However, in each case the appraiser was working on a refinancing application.

To approve the new loan, the lender needed to establish current market value, which in turn means performing an appraisal and identifying/analyzing the Comp's -- just like they would for a sale.

The fact that appraisers need to talk to actual, live Realtors -- who can fill them in on floor plans, updates (or not), and other home features not otherwise captured in statistics -- should give anyone relying on Trulia, Zillow, etc. for home values pause.

P.S.: Time permitting, I'm happy to talk to appraisers. Often times, something I know can be the difference between a deal (or refinancing) happening -- or not.

In an environment where banks are looking for any excuse to shoot down a deal, as a plugged-in, on-the-ground expert, I'm ideally positioned to serve as a counter-balance.

Of course, a healthier, more active market benefits everyone.

Now, THAT's Patience

But, Does She Have Grandkids Yet?"

The duplex at 21xx Irving Ave. South just Northeast of Lake of the Isles in Minneapolis' Kenwood neighborhood originally came on the market in Spring.

Spring, 2007 -- that is.

Asking price: $1.2 million.

After some short intervals off the market, and a couple intervening price reductions, it's still for sale today.

Current asking price: $900,000.

Given that the current tax assessed value is $614,000, and that assessed value these days often serves as a de facto ceiling on prices -- especially for properties needing updating -- you'd guess that a little more patience is in order.

P.S.: Even if the "value is in the land, " as the Listing agent is claiming, $900k still appears to be a rich price.

P.P.S.: Perusing the listing history on MLS, I noticed that the Seller appeared to be on their second agent.

Then I looked more closely: same agent, but different last name (she apparently got married).

THAT's how you know something's been for sale forever.

"Location, Location, Condition"

"Not a Drive-By"

Quick, test your knowledge of Twin Cities real estate, and guess how much the single family home pictured above is listed for:

A. $149,000
B. $249,000
C. $419,900
D. $599,900

Give up?

Here are three more, very significant clues: 1) the home has been completely remodeled; 2) it's located in Minneapolis' tony Kenwood neighborhood (just east of Lake of the Isles, and close to downtown; 3) appearances to the contrary, it's over 3,000 FSF.

Correct answer: D

As they say, "the curb appeal is deceptive" (also commonly billed as "not a drive-by").

P.S.: and yes, curb appeal matters: the home has been on the market for over one year.

The Buy-Versus-Rent Question

Calculating the "Rent Ratio"

Sometimes, the decision whether to buy a home or not seems to require an economics Ph.d.

Are interest rates headed higher? How strong is the economy? Are home prices now recovering, or will there be a "double-dip?"

It's enough to make your head spin -- or hurt.

If the foregoing (unanswerable, by the way) questions seem too daunting, try this one instead:

Can I rent a nicer place for less money than it costs to buy?

In many cities, including Minneapolis, the answer is now "no."

Check out this NYT piece, "In Sour Home Market, Buying Often Now Beats Renting," for the particulars.

Warning: you'll need to divide by 20 to calculate the local "rent ratio" -- the best yardstick for gauging whether buying is a better deal than renting.

If you need help filling in the numerator and denominator . . . . call me! (612-925-7701)

Great Location, Cheap -- Why?

What's the Catch? (Hint: There's 2)

Where: 31xx East Calhoun Parkway in South Minneapolis

What: 5 BR/4 BA with 4,500 FSF on .29 acre lot

How Much: originally listed for $925k on 9/21; just dropped to $825k yesterday

Who: Broker - Edina Realty; Agent - James Keane

Even in a soft market for upper bracket homes, a 4,500 square foot home, on a .29 acre lot -- overlooking Minneapolis' Lake Calhoun, no less -- stands out.

So what's the catch, besides what some might say is the plain curb appeal?

Looking for Catches

The home doesn't appear to be dated or run-down; in fact, the interior pictures are actually quite flattering.

And no, it's not a foreclosure or short sale.

So what, then?

There is a high-rise tower immediately to the north looming over the home (and no, it's not in the pictures).

Not a huge deal, perhaps, but not exactly an amenity, either,

Catch #2

The other catch -- at least until the taxes catch up to the lower valuation? (Like many expensive Twin Cities homes now, this one is listed for well below the tax assessed value.)

An almost $17,000 annual property tax bill.

In truth, property taxes are a looming issue for many, many other upper bracket homes as well, but particularly in Minneapolis (by way of comparison, you'd expect an $800k Edina home to have a $10,000 property tax bill, give or take).

Now THAT's Dramatic

Bryn Mawr New Construction

What: 4 BA/4BA new construction with 3,500 FSF.

Where: 20xx Laurel Ave., in Minneapolis' Bryn Mawr neighborhood (just southwest of downtown).

How (much): $739.9k list price

Who: Coldwell Banker Burnet (broker); Steven Gouert (agent)

When: on market 11/16/09

Hard not to notice this dramatic new list -- that's the point!

The asking price -- low $700's -- is a stretch for Bryn Mawr, a great, pocket neighborhood between downtown Minneapolis and Theodore Wirth Park on the city's West side.

Confession: I bought my first house there, in 1987.

Forget about paying what I paid then (don't ask); prevailing prices now range from high $200's for a small, starter home to high $500's, for bigger and/or more updated.

This home is part of a mini-trend of new construction trying to push Bryn Mawr's range to $600k-$800k.

It'll be interesting to watch this one . . .

The Low-End is HOT!

No "Extra Innings" -- Promise

Where: 38xx 37th Ave. South, in Minneapolis' Longfellow neighborhood

When: listed yesterday (Aug. 3)

What: 2 BR, 1 BA home built in 1914.

Who: listed by Kathleen Doyle, Edina Realty City Lakes

How much: $91,900

Want an indication of how intense Buyer activity is at the lower end of the Twin Cities housing market at the moment?

This modest, 1914 Longfellow home -- all of 2 Bedrooms and 912 square feet, asking $91,900 -- has already elicited multiple offers, in less than 24 hours on the market. Another 20-30 Buyers are planning to see it today.

The listing agent, Kathleen Doyle (612-802-9066), who's out of my office, is advising everyone that all offers are due by tomorrow (Wed.) at 5 p.m.

P.S.: And no, it's not a foreclosure -- it's an estate sale. If Kathleen's handling it, you'll get a prompt response, and if your offer is the best -- you'll actually get it, no games or "extra innings"! Imagine . . .

Home Showcase: 1802 Colfax So.

More Than Meets the Eye (For a Change)

Where: 1802 Colfax Ave. South, in Minneapolis' Lowry Hill neighborhood

What: all brick 6BR/5BA; almost 6,400 FSF on a double lot

How much: $1.195M

When: originally listed 8/08; two, $100k price cuts since then

It isn't often these days that the photos on MLS don't do justice to the listed home. In fact, more and more, the online photos are unduly flattering, leaving prospective Buyers disappointed once they're inside.

This isn't that home.

With 630 square feet, the cavernous Living Room alone (pictured above) is the size of a small South Minneapolis single family home.

But the physical size doesn't begin to do justice to the feeling you get standing in the room.

In a word, it's . . . sumptuous.

The richness of the millwork, the grandness of the room dimensions (also created by the high ceilings), the detailed appointments -- all these things simply don't come through the pictures.

Standing in the room, you get the feeling that it was built for a Vanderbilt or a Rockefeller.

In fact, the owner is the Minnesota equivalent: a MacMillan, from the Cargill founding family.

Real Estate Happy Ending

Extreme Makeover - Minneapolis Edition

In its hey day, this 1930 Tudor near Minneapolis' Cedar Lake was a masterpiece: custom tile everywhere, lath-and-plaster construction, hand-carved crown moldings, high-end masonry, walnut and cherry wood throughout. Not to mention a grand staircase, and a surprisingly modern floor plan.

However, the owners hadn't been able to keep up the property. In fact, years of neglect had left it with major damage and a long list of deferred repairs.

Given its location and large, .33 acre lot, it could easily have been torn down and replaced with an over-sized, out-of-character McMansion. But the owners, who'd grown up in the house, had a strong emotional investment in it, and wanted to see it bought by an owner-occupant who would rehab it.

After two weeks on the market, it sold for $405,000 last August.

The new owner, a contractor and his wife, began work the next day, and have had workers on the property 12 hours a day, seven days a week ever since.

The couple (and their new baby) are just now making the finishing touches on an amazingly restored and updated home that features, where the garage used to be, a brand new sunken Living Room with over-sized windows and French doors; an opened-up, modern new Kitchen; $50,000 of new, energy-efficient windows; gloriously restored hardwood floors, and many, many other high-end improvements. As they say, "the best of old and new."

The former owners are thrilled; the new owners are thrilled; and the neighbors are thrilled (especially the one two doors down, who was also the Realtor who handled the sale: me!).