Twin Cities Most Expensive Homes Sold in December
Not to much going on in the Twin Cities luxury segment of the market. A dip down to 18 homes sold over one million dollars from the previous month of 24. Home sales in the upper bracket have seen a steady decline since October, but seasonally that is ok being the time of year.
Twin Cities Luxury Real Estate
- 3209 Galleria #1802, Edina, MN 55435 Listing Price $1,806,900 Sold Price $2,488,888
- 3209 Galleria #1702, Edina, MN 55435 Listing Price $1,775,000 Sold Price $2,108,271
- 10708 Sonoma Ridge , Eden Prairie, MN 55347 Listing Price $1,479,000 Sold Price $1,479,000
- 3209 Galleria #1608, Edina, MN 55435 Listing Price $1,273,670 Sold Price $1,395,128
- 6980 Everest Lane N , Maple Grove, MN 55311 Listing Price $1,390,000 Sold Price $1,390,000
- 5650 57th Street Circle N , Lake Elmo, MN 55042 Listing Price $1,299,000 Sold Price $1,280,000
- 10 Maclynn Road , Greenwood, MN 55331 Listing Price $1,895,000 Sold Price $1,250,000
- 5853 Linden Avenue N , Lake Elmo, MN 55042 Listing Price $1,168,000 Sold Price $1,234,000
- 2504 Euclid Place , Minneapolis, MN 55405 Listing Price $1,375,000 Sold Price $1,200,000
- 5405 Mirror Lakes Drive , Edina, MN 55436 Listing Price $1,399,000 Sold Price $1,150,000
Looks like a little bit of everything sold this past month in December, nothing to spectacular however the Galleria Condos in Edina seem to be firing on each cylinder having more than a few sales pop into the most expensive list each month. Also, some properties in Lake Elmo had a couple go over a million dollars.
Unfortunately not too much traditional resale homes happening right now. Most on the list are builders throwing homes they sold on the market.
The year of the First Time Minnesota Home Buyer?
I should have added if you plan on staying in the home for over seven plus years and have a considerable amount of money to put down. This will be the year of the first time home buyer in Minnesota and the Twin Cities area. But you are definitely going to have to have close to flawless credit. Interest rates that are low will provide once in a lifetime buying opportunities for first time home buyers.
The outlook however still looks to be a bit on the shaky side, but optimism remains strong for some sort of stabilization in the second half. The biggest hurdle to overcome will be the job market because as everybody knows, No Job = No Home.
Didn’t Lower Rates Get Us Here
Yes and no, lower rates are great for first time home buyers that can handle the monthly payments. Recently lower rates have sorta thrown the housing market some sort of a temporary lifeline. Mortgage rates have been close to 50 year lows and no better time then now. It should also be known than just because you have good credit doesn’t necessarily mean that you are the right candidate to own a home.
One thing that has certainly come back into reach for first time home buyers in Minneapolis or St. Paul has definitely been the affordability of homes that have been at the lowest since 2004. Good for first time home buyers who may have been pushed out of the market back in the day.
What Will First Time Home Buyers Buy
Unfortunately this doesn’t bold well for the higher end homes of the market, sorry maybe next year. A part of me wants to think that first time home buyers will use much of their allocated money for a down payment, they will need to look at ‘turnkey’ properties that are ready to move in. Because of this little shift, sellers will have to recognize this and be willing to negotiate a fair market value.
Homes that distressed or bank owned foreclosures sometimes require a lot of work just to make them livable. More fixes means more out of pocket expenses to bring the property up to par.
I don’t believe townhomes will be to popular mainly because entry level single family homes will come back into reach for many buyers that are entering the market.
Be Mindful When Investing in Twin Cities Real Estate
The anatomy of a Twin Cities real estate deal touches on variety of topics which will depend on if success happens or not. Investing in real estate is not for the faint of heart and leave people pondering what mind have been. Hindsight can lead to a lucrative future.
Basic Types of Twin Cities Real Estate Investors
Flipping houses or ‘turn & burn’ as some have called it obviously picked up a lot of steam with all those television shows the past few years. This process includes buying a distressed home (which is more than likely a bank owned home) that can be brought up to current standards and sold for a profit. Can you still fix and sell for a profit in the Twin Cities metro area? I will be straight honest on this one and leave it open ended to yes and no. Will leave it at that because certain areas are good and others, well not so.
Finding properties can be a struggle when so many real estate investors looking for that needle in the haystack property that will make them rich beyond their wildest dreams. It’s important to have all your ducks in a row so when that property pops up that you can make your offer quick and get it accepted.
Buy & Hold is when you purchase a property in the sole purpose of purchasing a home and renting it out to capture equity. Every investor knows that true wealth comes from your ability to have many properties which opens up the doors to creating revenue streams from income producing properties.
Know the Trends
Doom and gloom is all you hear all over the media, will the end ever appear, not by the way the national media makes it appear. I find it hard for them to know what is exactly going on in this specific neighborhood in one specific area. Isolated pockets of increases and demand are out there. Some areas are outperforming what is truly being stated in the media.
Keep your finger on the pulse of the local Twin Cities real estate community to find the best deals. This allows the real estate investor to know the true value of the property so overpaying is never a factor. Never take a shot in the dark when it comes to property values.
Knowing trends can help assure that an investor gets in on the ground floor of an emerging or re-emerging area. Don’t be late to the party because you have already missed the curve and you might walk into a soon to be deflated area, thus making your real estate investment rendered useless.
True Scenario
Enough talk, show me how? Recently I helped a client get into a great opportunity in St. Louis Park which was purchased using a FHA 203k Streamline loan. The area is hot because of the close proximity to downtown Minneapolis and Uptown, without the high prices of living. The house was in prime condition for a fix and sell because of the price point and area. The house was a REO Bank Owned home in badly need of repairs, but with a little creative thought was surely to be profitable. Total days on market was a whopping six.
The guts of the deal:
- Sold @ $169,000
- Down Payment of 3%
- 203K allocates $17,000 for immediate fixes
- Total investment = $5070 at closing
- A total of $23,000 invested for remodel
- Sold for $279,000
- Carrying Costs $5900
- Seller Costs to sell $16,740
- Profit of $47,360
Umm, I don’t know about you but that is still a nice takeaway. I thought this wasn’t suppose to happen the way the real estate market is right now. Money is made in a down market, this is wear the strong survive and create true wealth for themselves. The deal was successful because of the steps that were followed and making an educated decision.
The best thing about it was this was their first home ever bought. So there you have it, one of many successes that are occurring in a down market.
Fantastic Opportunities
For those that know the variables of making a good real estate decision, has always been a way to create that nest egg or expanding your financial opportunities.
In a note to say that not all real estate deals end up this way and each deal is structured different, but if you think you have what it takes then I invite you to find out how.
Added A Real Estate Discussion Forum
Just added a real estate discussion forum over at Elevation Realty Group. I guess you could say that the forum is in it’s infancy stages being that there is not too much going on over there. I need your help ‘oh avid’ reader to kick things off!
Adding a little bit of transparency for buyers and sellers in the real estate industry. Here, anybody can add or create links to things that interest them about real estate or communities within the Twin Cities.
So get involved and ask some questions if you have them, you never know if someone else has the same question. You just might provide the answer 
Twin Cities Real Estate Outlook for 2009
Here is my opportunity to play Nostradomus, no not really but I will give it a go about what I think will happen in the Twin Cities real estate market in the upcoming year. The biggest thing, we are still not out of feeling the wave of foreclosures. I think the most of subprime mortgage debt has been worked through, still some to come. Foreclosures now moving to prime borrowers and Alt-A loans because of job loss is the next thing to worry about.
Buyers in the Twin Cities
Plenty of deals will remain in the real estate marketplace throughout the cities and suburbs. Affordability will sink to levels not seen in sometime, while median wages will remain where they are. Making it the right time for certain people. Home buyers might be missing out on a deal of a lifetime, but how many times have they heard that
Statistics are important and make sure your Realtor(r) has them. Real time stats are readily available and check them out here. Demand more.
Will mortgage rates hit that mythical 4.5% or possibly lower? Basic principle has always been as home values go up, values decrease and vice versa but that is not we are seeing. With the fed lowering rates, they want you to put money into assets for the short term thus driving mortgage rates down by investing mortgage backed securities. Unfortunately because of all the money they are printing inflation worries and the value of the dollar dropping will continue to drive fear.
I don’t see this lasting very long rates. Once we have hit that equilibrium, where stability returns rates will trend up again. Stability will hopefully return to sometime in the summer time but the bottom will be hard to predict.
Owning a home is not for everyone and there are a lot of people that are still fundamentally not ready to own a home and that works. Renting is still and remains a very viable option.
Sellers will still have to be creative
With foreclosures continuing to put downward pressure on home values, Twin Cities home owners will have to buckle down. If at all possible hold off on selling until 2010. What? You won’t hear a lot of agents say that but I am sure I will take some heat for that one.
The one thing home sellers have going for them is interest rates falling and hopefully this helps out. Don’t count on it though because buyers confidence is shattered. They have to possibly be willing to accept the fact that home prices might continue to fall. Remaining in a house for 7-10 years might be hard for some to acknowledge given in recent years people could buy and sell within a couple of years making money doing it.
Will the Norm return
The biggest thing that has to be fixed is consumer confidence, until this problem is solved nobody knows. It would be nice if would happen soon for everybody’s sake.
Meh, take them for what they are worth. Just my two cents.
Are Loan Modifications Working?
There has been a lot going on lately especially with the current outlook of mortgage rates falling. Another big thing that has been gaining steam has been mortgage loan modifications. I read a great article on why it is so difficult to modify a loan and it is probably the best one seen yet.
Most people are unaware of who has control of their mortgage. The fact is, there might be hundreds and it is hard for people to find the point of contact to renegotiate the loan. Mortgages are bought and sold in the secondary market, bundled up into packages and sold in the bond market to investors, the lender may not own a specific mortgage. So it is not just banks that have to take a loss, it is investors and many are unwilling to do so because of ladder that has to be climbed to get approval from each one.
Recent articles have said that up to 50% of loan modifications performed this year are re-defaulting. It seems that good money is being thrown after bad.
What is A Loan Modification
When different terms are negotiated with the lender or loan servicer on the mortgage to change the original terms of the contract.
Factors that influence a loan modification all depends on the loan servicer who is handling the modification. If you don’t contact the lender, they will never work with you. There is a huge chunk of borrowers who never contact the lender, it never ceases to amaze me. Can’t get anything done if contact hasn’t been made.
A loan modification can change one of a few things
- Reduction in the Interest Rate (Temporary or Long Term)
- Forgiveness on Principal
- Wrap payments on the backend of the loan.
You will need a hardship letter that spills everything, this is your chance so let the lender hear it. You will have to have missed up to three payments and not on purpose either, along with showing that you can make payments if you are lucky enough to get a modification at this point. Proof on income earned along with monthly budget reports will have to be submitted. Being responsive is one of the most important things that can be done when working on modifying the terms of the mortgage.
So who to contact
Be careful in the company you choose to work with first off if you need to do a loan modification. Never pay an upfront fee for work to be performed. Although these are trying times for many individuals or families, there are always people out there that are trying to make a buck off people’s situations.
The Minnesota Department of Commerce just had a press release warning consumers about using unlicensed mortgage originators or companies. Actually they advise you to contact the loan servicer first or contact the Minnesota Homeownership Center. Which is a non-profit organization that is free of charge that offers a network of providers in Minnesota.
Not Enough
Unfortunately not enough is being done and there is little legislation in affect. Lenders have to protect their investors profits and maybe, just maybe one of these bailouts that graces the television almost every day will focus on loan modifications that actually work.
Should You Buy Now?
A recent article in the New York Times thinks you should. The piece touches on possibly missed opportunities if individuals or families wait to buy later. What’s even more cool is the article talks with a Minneapolis couple who purchased a home in Lowry Hill.
Reasons to Buy a Home Now
- $7,500 Tax Credit
- Interest rates falling
- It’s Winter, sellers more willing than ever.
- If your credit is stellar and debt is minimum, don’t miss on low fixed 30 year mortgages
Plan to stick around for awhile, in the time frame of at least 7-10 years. If you are looking for a short term commodity, fuhgettaboutit. Housing never was and should have never been looked at a get rich quick scheme. It’s time to move back to the way it was.
Creative Financing to Sell Your Twin Cities Home
photo credit: TheTruthAbout…
Sea of homes for sale
Trying to sell your home in the Twin Cities and finding a myriad of sale signs, many are especially if you have a lot of bank owned homes around the area. Lenders are being almost ruthless these days trying to unload inventory by discounting homes by as much as 30% in some areas. It’s important to know your options when it comes to selling your home in case a buyer finds your home and needs a little creative financing.
Creative financing is alive and well again these days, it was once popular back in the 80’s and 90’s when interest rates are so high. It is different this time around because interest rates are historically low and might go even lower, but financing for some remains a problem.
What is Creative Financing
Is a way to to overcome affordability options when it comes to providing buyers different ways to purchase a home. It is a way to provide the buyer, seller and lender to the table that might be a little bit different than the traditional way. Creative financing can be overlooked by most and to be quite honest is often misunderstood.
All players have to be on the same page to try and determine what financing options will work best for the transaction. Sellers are most interested in bottom line, buyers are most interested in monthly payments and affordability and lenders want minimal default along with interest rate that will let them profit.
So what are they
Here are some examples in creative financing for sellers in what sellers can do to help out in the transaction.
- Seller Contributions is probably the most basic form of creative financing. It includes options like paying for buyers closing cost or a down payment. Sellers can typically contribute up to 3% for closing costs and 3% of sales price for a down payment. These percentage can vary depending on the lenders, down payments, etc. One thing to note is contributing to the down payment or closing costs, it might affect the appraisal and then other options might need to be looked at.
- Seller Funded Permanent Buydown buys down the interest rate for the buyer over the entire life of the loan. Even though interest rates remain low this is still important negotiating tool because the savings over the life of the loan is significant in interest payments.
- Seller Funded Temporary Buydown buys down the interest rate for the buyer for the first couple of years of the loan.
- Owner Financing a great option if you own your home outright but understandably that most homeowners don’t like to play the role of the bank. The big upside is that the seller can turn their equity into a nice little return on investment because they are collecting a monthly payment. It is attractive to buyers for a few reason, interest rates might be lower, they might have less than stellar credit and can’t get a loan but have money. Something might have happened in the past where they are still repairing credit and it would be up to the seller to determine credit worthiness.
- Contract for Deed is essentially the same as owner financing except that ownership of the property does not convey to the new owner until the entire price is paid in full.
Some different options to get you over the hump when it comes to finding and securing a buyer for you home that is other than traditional.
Twin Cities Most Expensive Homes Sold in November
Here is a list of the ten most expensive homes sold in November for Twin Cities luxury real estate. There were 8 less homes sold in the upper bracket sector of the market this month compared to last. Twenty four homes sold in the month of November.
Twin Cities Luxury Real Estate
- 630 Indian Mound E #1B, Wayzata, MN 55391 List Price $3,200,000 Sold Price $3,050,000
- 2182 Homestead Trail , Medina, MN 55356 List Price $2,950,000 Sold Price $2,800,000
- 4345 Trillium Lane W , Minnetrista, MN 55364 List Price $3,200,000 Sold Price $2,600,000
- 4912 Rolling Green Parkway , Edina, MN 55436 List Price $2,795,000 Sold Price $2,600,000
- 2700 Stone Arch Road , Woodland, MN 55391 List Price $3,100,000 Sold Price $2,513,000
- 3209 Galleria #1602, Edina, MN 55435 List Price $1,829,900 Sold Price $2,093,972
- 1435 Park Drive , Orono, MN 55364 List Price $3,300,000 Sold Price $2,000,000
- 719 Minnetonka Highlands Lane , Orono, MN 55356 List Price $2,099,000 Sold Price $1,850,000
- 3209 Galleria #1708, Edina, MN 55435 List Price $1,361,955 Sold Price $1,747,455
- 17875 Breezy Point Road , Woodland, MN 55391 List Price $1,995,000 Sold Price $1,650,000
The first time since I have been putting this list together, the most expensive home sold was a condo and there was an equestrian horse farm that made the top ten. The Edina Westin Galleria Hotel & Residences Luxury Condominiums had a total a five homes sold over a million dollars.
What’s Up with Realogy?
Realogy has been in the news of late and not for something that you would want to be. Some might think no big deal and say ‘Who the are they’? You might not of heard of them but I am sure you are familiar with all their local real estate brand affiliates like Coldwell Banker, Century 21, Sotheby’s International and ERA just to name a few.
It seems the crew over at Bloomberg are all over their missteps. Run a search over at the website and they fill up the page as of recently. It seems that the company, which was bought out last year by Apollo Equity Management is in danger violating its terms with bank loans. Apollo had offered to swap debt securities for new debt but now faces a lawsuit by a billionaire investor claiming bad faith.
The Twin Cities real estate market has a variety of these brands and it will be interesting to see if this is just an act to delay the inevitable. It appears the Realogy has been hit hard by the real estate downturn, with losses mounting. One would think about the credibility of buying or selling a house, but hopefully it all works it self out.
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