HI all my readers! I have not been writing on this blog since almost a year ago because I have been trying to figure out what to do with it. I finally put together a new Wordpress blog and have transferred all the content of this blog to it. My new blog is Twin Cities Real Estate Buzz. Please come on over to the new blog and pick up where I left off. Add my new site to your list of blogs please and keep reading! I am still working on the new site, so check it out often to see what else has been added!
I know many of you won't believe this, but the dirty little secret that the local media isn't reporting is that homes in the lower price range are flying off the racks. Yep...just like a bridal store having a super cheap sale on gowns with women knocking each other out of the way as they try to snatch up the latest deal, so too are investors and first time home buyers trying their best to win that little cottage home, out doing each other with above list price offers.
Like I said, you don't believe me, do you?
Last month I experienced this phenomenon first hand with a duplex I listed. With-in five days, I had five offers, all above asking price. There must have been some telepathy in the air because almost all of them were around the same price. I actually had to tell them to resubmit their "highest and best" offer. Who ever did the best, gets the house. Let me tell you, it was competitive bidding and I was truly surprised at how high some of the offers got.
Even better, I know an investor couple who are snatching up dilapidated foreclosures and rehabbing them to flip. Not only do they have to bid against other offers each time they find a home, but when it comes time to sell the property, they have to deal with multiple offers from first time home buyers. (They do fantastic rehab work by the way!)
So yes Virginia, there are some segments of the real estate market that are doing quite well. Multiple offers do exist and are getting more common.
It makes is hard to explain to a buyer why they need to offer above listing price if they want to get a home, especially when all they hear about is how cheap homes are. But if you want to purchase a home in decent shape and at a great price, be prepared to pay for it because in this market you'll be just like those brides you see on television...pushing and yelling your way to that perfect find.
There are obvious ways that should not be pursued when trying to sell a home. I really don't care what type of home it is, or what the circumstances are for the sale (foreclosure, short sale, etc), but there is just no excuse for the agents listing these homes to take photos like the ones below.
First of all, I do believe tomorrow is the fourth of July, NOT the fourth of January. Snow has not been seen in Minnesota since March, so why is the photo of this home still in the MLS? The white wire reindeer just scream "Buy Me".
Now this home is a distressed property...I cannot remember if it is a short sale or foreclosure, and every listing photo of this home shows trash and clutter just like this photo. I have to ask, why even bother? No buyer is going to jump on this home, unless it is an investor looking for a steal. It definitely doesn't have the "cozy" feeling that a first time home buyer is looking for in today's real estate market.
I guess I am constantly amazed that agents out there feel photos like these are acceptable. It doesn't take much effort to pick up some trash, or take a new photo in the summer. Sellers, please take a look at the photos taken by your agent to see just what type of marketing they do. Trust me, if you have photos like these, your home is NOT going to sell anytime soon...unless you list it for $1.
4
Minneapolis Real Estate Update from the Minneapolis Association of Realtors
When selling your home, it is extremely important to keep confidential information confidential. Any details given out could harm your position with a buyer who is interested in your home. Knowing things like your motivation or personal circumstances are great for a buyer, but they can easily take advantage of these facts and offer you less than you would like, or deserve.
Case in point, a recent seller was having some work done on their home while it was on the market. Nothing major, just some finishing touches to the rehab work that was recently completed. While a buyer viewed the home one day, a sub-contractor was working in the home. Naturally, the buyer and his agent struck up a seemingly innocent conversation with the worker. After a few minutes, the buyer started asking some questions about the work, which led to other questions of why the owners were selling, and what their motivation was. Knowing some of this information, the worker answered the questions. Not knowing it at the time, this worker gave up some confidential information that should have never been communicated.
A few days later, the buyer made an offer, with some peculiar requests regarding the work, as well as a low offer price. It was obvious that the buyer was privy to information they should not know. When they were called out by the listing agent, they simply said the construction worker had told them. At this point, the seller's realized their position was compromised by loose lips and they had no option but to negotiate with the buyers.
Who knows if the offer would have been better, had the buyers not been privy to certain facts. And there was no way the sellers could have known that an innocent conversation with the contractor would mean money out of their pockets. They learned a very valuable lesson that day. Don't tell anyone about your circumstances that you wish to remain confidential. This includes your real estate agent, if you truly want to keep something secret.
(this post does not pertain to information or material facts about the property that must be disclosed according to state law)
(I placed this post originally on my Historic Home Blog today, and thought it best to bring it on over to my other blogs, as an FYI about copyright and not stealing my photos and content.)
A recent incident that is now recurring is forcing me to write this post about copyright of photos used on this site. (Notice the "Do not Copy" notice on the leftside of this blog.) To some people, it is ok to go onto the Internet and lift photos of other peoples work. They then use these photos on their websites without permission. They either do not care or don't know the law, but either way, what they are doing is stealing....oh, and Copyright infringement.
As a visitor to this blog, I am sure you can easily see that I travel around the area taking photos of historic homes (and other places around the Twin Cities), then post them to my blog with a story about the home. It's what I do, and the whole reason for this blog, which is to educate locals and others about the great historic resource we have in Minnesota through our homes and buildings. Taking these photos takes time, energy, patience, and creative thought.
What many people fail to realize is that even though the Internet is public domain, the content is not free for all to use. The general rule of thumb (in this instance) is that once a photo hits a hard drive, it is considered copywritten. The photo does not have to have a copyright notice on the photo, nor a big C. In order to use a photo, one must obtain permission from the source. So for those people out there that "right click and save" and then use the photo, you are committing copyright infringement.
Any excuse you give does not matter. Taking something created by another without permission is wrong.
I could go into greater detail, but I don't want to clutter up my nice blog with a post such as this. I just want you to know, that I work hard to write this blog, so please do not steal my stuff. Simple as that.
If you want to learn more about Copyright law as it pertains to blogs and websites, please visit a great lady's blog regarding copyright law, Lenn Harley, for in depth articles on the subject.
A great place to visit in Minneapolis is Minnehaha Falls on the east side of town. The evening I took this photo last weekend was Prom night, so we had to find a spot around the prom goers getting their photos taken, in order to take a good picture of the falls.
I have been thinking lately how life is keeping me from blogging everyday. I used to write everyday the first year or more of this blog, but am finding it difficult to keep up. Business has picked up and so has life with two kids. There are some other successful real estate bloggers in town who write everyday, but I just can't post 30 times a month without staying up till midnight every night. I like my sleep, or I can't function.
I can tell my readership has suffered because of this. Google analytics tracks my blogs and lets me know how many visitors I have daily. Needless to say, my readers have decreased. Google has dropped my site in page rank just this past week. Oh, well, what can you do? Obviously, writing a post everyday does really matter if you want your blog to rank high in Google. If it ranks high, more people visit you and possibly come back to read some more. The more people who visit, the more Google likes you. It is a vicious cycle!
So I would love for those that read me to stick around and visit every now and then. Or drop me a line and let me know what you love or hate about the blog. Trust me, I miss blogging everyday, but never can find enough time to do it anymore.
On Friday, the art piece "Spoon and Cherry" at the Minneapolis Sculpture Garden, got its cherry back, after a few days of getting a new paint job. I took this photo yesterday, which was hard considering the amount of photographers there and prom goers.
10
We Need Your Help to Stop the Minnesota House of Representatives
Below is a press release sent to Minnesota Realtors regarding some important tax law modifications that will negatively impact homeowners in our state. Please take the time to read the below information and take action via the link below. All of us need to come together to protect our real estate market.
From the Minnesota Association of Realtors:
"On Monday, the Minnesota House of Representatives Tax Committee released a "delete all amendment" to HF2323 and added provisions that are negative for real estate in the Omnibus Tax Bill. Authored by DFL Representative Ann Lenczewski, it contains a number of tax law modifications that hurt all Minnesota home owners. We need you to review and distribute this "Call to Action" to your clients, customers, and friends.
BACKGROUND: The Minnesota legislature and many other state governments find themselves in a situation familiar to many Minnesota households – their expenses have outpaced their revenue. Whether it is your family budget, a business budget or government budget, when expenses are higher than income you have to make choices. Since 1992, even with all of the Budget Shortfalls Minnesota has faced, the spending has increased each and every year. In fact, Minnesota State spending has gone from $14.5 billion in 1992/93 to $34.6 billion in 2008/09 – that’s a whopping 138 percent increase.
To resolve the budget shortfall, legislators have a number of options: 1) raise taxes to cover the government spending; 2) reduce spending to equalize the revenue projected; 3) raise revenue and reduce spending. The House/Senate DFL plans focus on option 3 – raise taxes and reduce spending. Governor Pawlenty has proposed a plan focused on reducing spending and raising revenue without raising taxes.
HOUSE TAX BILL HURTS REAL ESTATE. The DFL House Tax Plan raises revenue by cutting a number of income tax deductions. Of significant concern to Minnesota REALTORS® and homeowners, the DFL House plan eliminates two major real estate tax deductions: the Mortgage Interest Deduction and Real Estate Property Taxes. The bill also eliminates provisions of the Relative Homestead Tax.
Elimination of Mortgage Interest Deduction (MID)– a feature of the tax code since 1933, the MID has helped numerous generations achieve the American Dream of owning a home. A significant public policy objective for decades, homeownership stabilizes families, neighborhoods and communities. The House DFL Tax Bill eliminates the MID for homeowners and replaces it with a "housing credit" for qualified homeowners. The maximum credit is $420, which is equal to 7 percent (7%) of up to $6,000 of mortgage interest paid during the taxable year. However, no credit is applied to the first $4,000 of interest paid. Therefore, a homeowner must pay at least $10,000 in MID in order to receive the full $420 credit. As an example, if a homeowner has mortgage interest of $8,000 in the tax year, the credit equals $280. ($8,000 - $4,000 = $4,000 x 7% = $280).
This provision hurts young families disproportionately because mortgage debt loads are highest when people are establishing their households. This provision changes the financial plans numerous families have made when purchasing a home and increases the financial difficulties many are facing during this economic downturn. At a time when housing is finally getting a financial foothold why eliminate a tax provision that has helped millions of families achieve the "American Dream?"
Real Estate Property Tax Deductibility –This public policy provision has been included in the tax code since 1933 and allows taxpayers to deduct property taxes paid from their income. The House DFL Tax Bill eliminates the deductibility of real estate property taxes at a time when local property taxes continue to increase faster than Minnesotan’s income.
Relative Homestead – If you own identical houses, with identical values, with identical tax rates you would assume you would pay identical taxes – Right? Not if the House DFL Tax Bill becomes law. In a provision of the bill, authored by a DFL legislator, families that provide housing to other family members will pay more taxes on the second home. The goal of the provision, as stated by the legislator, is to stop parents from buying homes for their college students. MNAR pointed out that this is a small piece of the overall program and instead the proposal will be hurting families trying to assist other family members who may have gone through job loss, divorce or other financial difficulties. Isn’t it better to have families provide for families instead of government?
These provisions have been designed according to the author to make the Minnesota tax system more progressive and to raise revenue to fill the state’s pending budget shortfall. Because real estate related public policy provisions of the tax code benefit the upper 50% of tax payers – Top 50% begins at $40,061 according to the Tax Incidence Study (http://www.taxes.state.mn.us/legal_policy/other_supporting_content/2009_tax_incidence_study_links.pdf ). At a time when the housing market is beginning to stabilize, this House DFL sponsored proposal sends the wrong message to struggling Minnesota households.
The Minnesota Association of REALTORS® has a long and respected position that government, at all levels, needs to "Live Within Your Means." Just like families sitting around the kitchen table trying to make ends, Minnesota's legislative body should not be adding to the long-term financial burden of Minnesota homeowners. The House DFL Tax Bill penalizes families who have invested in the American Dream and provide for the backbone for stable communities.
ACTION REQUEST: To fight this unbelievable proposal we are asking that you take three steps:
Please contact your legislator and let them know how you feel about this proposal. Please find attached a list with legislator contact information or use this link: http://www.leg.state.mn.us/leg/Districtfinder.asp
Forward this email to your clients, customers and friends. Let them know what is being proposed and give them the web address above to review the bill.
Go the extra mile and CALL your legislator about this tax bill. Let him/her know your concerns and how it will impact your clients, your family and your business. Let your Representative know that it is time for our elected officials to "LIVE WITHIN YOUR MEANS" by prioritizing spending and not raising taxes. You can access the bill summary (48 pages) at: http://www.house.leg.state.mn.us/hrd/bs/86/HF2323.html
11
Newly Released Market Report from Minneapolis Area Association of Realtors
The newest update is in from the Realtor Association, who actively tracks real estate market statistics like none I have ever seen.
"Hopeful signs of a Twin Cities housing market recovery carry on thanks to a combination of no growth in the spring supply of homes for sale and still-improving sales figures.
Helping to keep inventory down is slow new listing activity, a metric that has been sluggish all year. For the week ending April 11, there were 20.7 percent fewer new listings than there were during the same week in 2008. Pending sales are still trending in the opposite direction, up 21.9 percent in year-over-year numbers to 1,046 for the week. That's only the second week of 1,000-plus pending sales or more since May 2007. If these two metrics persist, the market could be in for some serious re-balancing.
With the Housing Affordability Index reaching 218—an increase of 40.8 percent over last year—it seems to be an awfully good time for buyers to get off the wall and on the dance floor...being mindful that 29.1 percent of the dance partners are lender-mediated."
Don't forget the Monthly Skinny Report video below:
I planted some pansies last week, as they are the first real flowers you can plant in the Spring that survive the cooler temps. Over on my garden blog, I have started writing on what is peaking out of the ground. Hopefully this drizzle rain of the last two will help them grow a little higher.
I have to say, it is really disappointing that in today's society, only certain people are allowed to voice their opinions in opposition. After watching the news clip I have included below, of a CNN reporter cutting off a demonstrator who is just trying to point out why he is there, I have to say that I am just sick and tired of the media bias.
Journalism is dead. What we have instead are airways and channels of editorial reporting, where so called "reporters" give us their opinion and political beliefs on topics. Kind of like bloggers. We give our opinions and beliefs in matters, but we don't hide behind the belief of being professional journalists. Heck, I'm a Chemistry major for goodness sakes. English writing was never one of my best subjects, but blogging has helped me get better.
But back to the reporter. If there is one thing I have learned when working as a professional, it is that you NEVER cut someone off when they are speaking. And the second thing you never do is become condescending to that person when their beliefs are different than yours. Obviously, this reporter, needs to go back to etiquette school and learn some manners. Not that I do already, but I won't be clicking the remote to CNN anytime soon.
The last thing I will say is that I am very proud of those that made it out yesterday to show their disappointment and anger over the growing government and increasing taxes. I spoke with numerous family members and friends across the nation who went to their local Tea Parties, and everyone of them said the demonstrations were peaceful. Nothing like what was being reported by the likes of CNN.
Birthday Party Sick with the Flu for a week Closings and new Listings Volunteer Work Reading Books that have been on my shelf for a Year Visiting Family Waiting for Spring
But now I think I am back. Has anyone even missed me?
15
Minneapolis Advantage Loan Program up for Round Two
To all you home buyers out there looking to buy a home in Minneapolis, listen up, as you might be able to take advantage of the Minneapolis Advantage Program. It helps potential buyers purchase a home in neighborhoods beseeched with foreclosures. Last year was the pilot program and it went very well (see more below), and this year will most likely prove to be another huge success.
Two hundred loans at $10,000 each will be provided on a first come, first serve basis as of April 1, 2009. The funds can be used for closing costs, down payment assistance, or small repairs to the home, and if you keep the house for five years, the loan is forgivable. As with last year, only certain areas of Minneapolis apply, so you will have to be purchasing a home in one of these neighborhoods to qualify.
Income Requirements and Program Guidelines If your income is less than $64,720 (less than 80% of the area median income), you may qualify for the following program:
Minneapolis Advantage Program – Federal Home Loan Bank, Guidelines
If your income is less than $97,080 (less than 120% of the area median income), you may qualify for the following program:
Minneapolis Advantage Program – City of Minneapolis, Guidelines
2008 Results for the Minneapolis Advantage Pilot Program
Last year, every real estate agent in town was excited to see the loan program offered by the City of Minneapolis. However the program was such a success, that before anyone knew it, the funds were all used up. Only $500,000 was available at the time, so 50 lucky home buyers were able to qualify for the $10,000 (just a quarter of what is now being offered). Here are some of the statistics for the Advantage Program in 2008:
62% of the homes purchased were foreclosures
50% of the homes were sold for under $100,000, and 82% were under $150,000
80% of the homes bought were located in North Minneapolis
78% of purchases were from first time home buyers
You can even see where each home is located by viewing this map.
Now that we have had a couple of "warm" days (above 40 degrees), I have been out in the garden taking inventory of what spring bulbs might be peaking out of the soil. So far, some of my Iris bulbs are coming up and I can't wait to see if they bloom this year.
We have a lot of great garden centers here in the Twin Cities - Bachmans, Linders, etc, and it is hard to drive by them because I have that garden itch. Of course, they don't have anything right now except seeds. Speaking of which, my current indoor garden project is growing tomato plants from seeds. The first post for this year on my garden blog is my tomato experiment.
If you have that spring garden itch too and want to get some ideas of great garden centers around Minneapolis and Saint Paul, check out this forum, which has some locals give their opinions.
It seems like almost daily that I hear from a seller questioning whether they should walk away from their home, or stick to the commitment they made to the bank. Across the country, thousands of sellers are potentially facing foreclosure, and many are just not sure if it is better to find a way to keep their home, or take the easy way out and damage their credit score in the process.
Sometimes I get aggravated by those who openly choose to walk away when they shouldn't, as witnessed in a post I wrote last week, but I do truly understand the whole ordeal. Today I read an interesting article from CNNMoney.com which looks at some home owners across the nation, and the dilemma they face....and the reasoning by their decisions to either walk, or not. It helps to put a human face on the issue.
I was showing homes last week around Lake of the Isles in Minneapolis and noticed the ice rink on the Lake, created by clearing off the layer of snow. For those of you who don't have raging hockey fans where you live (or frozen lakes, for that matter), it is quite a common practice here in Minnesota. Some people even bring hockey nets out onto the ice to make it more playable. It costs a lot to rent ice at a formal rink, so we just go and use the ice mother nature creates for free!
I dove into the Stimulus Plan on the House Appropriations website to try and find out what kind of agreement the Senate and House of Representatives came to regarding the First Time Home buyers Tax Credit. Not the most fun reading, but extremely important to know about for any serious real estate professional.
Currently, a taxpayer who is a first time home buyer (someone who has not owned a home within the previous three years) was allowed a refundable tax credit of the lessor values of $7500 or 10% of the purchase price of the home. The credit was allowed for homes purchased between April 9, 2008 to July 1, 2009. However it would have to be repaid, interest free, over a period of 15 years, or recaptured at the time of sale.
The stimulus package modifies the current rules, but also keeps the following in place:
the tax credit phases out for individual tax payers you have a modified gross income of $75,000 to $95,000 ($150,000-$170,000 for joint filers)
tax payers can claim the purchase of a home on their 2008 tax return (thus the reason for the credit beginning on December 31, 2008), even if they buy their home, for example in January of 2009
The new agreed to provisions that go into effect December 31, 2008 and are:
extends the current home buyer tax credit for qualifying home purchases to December 1, 2009
increases the maximum credit to $8000 ($4000 for a married person, filing separately)
waives the recapture of this tax credit for homes bought between December 31, 2008 to December 1, 2009
if the home is sold, or ceases to be the primary residence, within 36 months of the closed date, then the rules of recapturing the tax credit apply (currently over a time period of 15 years)
The part that really stinks about the revisions is for the first time home buyers who closed on their home between April 9, 2008 -December 30, 2008. It appears they will still need to repay the tax credit of $7500 over a period of 15 years, just as originally written, and none of the new revisions will apply to them.
Don't worry though, at least you get a tax credit. We closed on your new home in March 2008, and even though we are only 30 days out for qualifying, no soup for us!
20
This Just in From the Minneapolis Association of Realtors
"For the week ending January 31, new listings continue at a lower level than seen last year, clocking in at 1,635—a 15.3 percent drop. Conversely, pending sales continue to raise sand with 673 recorded for this week's report—25 percent above last year. Basically, this is all welcome news. Having fewer listings on the market, combined with an increase in pending sales, helps to reduce the Months Supply of Inventory to 13.5 percent when compared to last year at this time—down from 8.9 to 7.7 months. This means it will take the current supply of houses for sale 7.7 months to sell (on average).
The Percent of Original List Price Received at Sale continues to fall, with the January figure of 89.5 sitting at 1.6 percent less than 2008. It's important to consider sales prices of foreclosure homes and how they affect this figure.
Our new Housing Affordability Index jumped to 202 in February. This is a new record and means that the median family income is 202 percent of what is necessary to qualify for the median-priced home. Again, we must consider how the sales prices in the lender-mediated market are affecting this figure, but we can say with some confidence that there are a number of very attractive buying opportunities in the local housing market. If we are able to maintain these trends, we'll be well on our way to killing the blues. And to this current market malaise, we'll be singing "gone, gone, gone (done moved on)."
I just read an interesting article which predicts the next 15 companies that could likely fail in 2009. While some of them are no big surprise, like Chrysler, who should have failed decades ago, or Blockbuster, who has been struggling ever since online video rentals have taken off (I am an avid Netflix fan), some are rather surprising.
Well, OK. Krispy Kreme is really not that surprising. They over expanded in the United States and stretched themselves too thin. Sometimes, staying small is the best plan for long term survival. But one that I was surprised to see is Realogy, the largest real estate brokerage in the country:
"Realogy Corp. (Privately owned; about 13,000 employees). It's the biggest real-estate brokerage firm in the country, but that's a bad thing when there are double-digit declines in both sales and prices, as there were in 2009. Realogy, which includes the Coldwell Banker, ERA, and Sotheby's franchises, also carries a high debt load, dating to its purchase by the Apollo Group in 2007 - the very moment when the housing market was starting to invert from a soaring ride into a sickening nosedive. Realogy has been trying to refinance much of its debt, prompting lawsuits. One deal was denied by a judge in December, reducing the firm's already tight wiggle room."
It will be no surprise to me if some real estate brokerages go out of business in 2009 and 2010. Many just over expanded and overspent during the fat years, and left nothing for the lean years. I believe that the local Realtor association has said about 15% of the agents in town have left the business.
The funny thing about this, to me at least, is it seems many people and businesses should have reread the Biblical story of Joseph. See Joseph could interpret dreams and when Pharaoh had one he couldn't decipher, Joseph came to the rescue and predicted that Egypt would see 7 years of famine after 7 years of feast. Their solution? Put some food aside during the seven years of plenty, so they would not suffer from hunger during the famine. Hmmm...there's a novel idea.
But so many businesses, including our local governments, saw the money flooding in and decided to build larger buildings, expand, grow, grow, grow, and were so blinded by the wealth they violated history, and are now paying for it. Cities in Minnesota are right now debating on whether to cut school funding and after school programs...because they are facing a budget deficit. You've got to be kidding me. I don't see them proposing to cut a few of those high paying government jobs.
Please, can someone answer how governments survived 5+ years ago, before the boom, on a budget, but cannot do it today?
The fourth quarter market data is out for the Twin Cities, featuring market saturation of Lender Mediated sales and inventory. The silver lining from all this data is that for the first time since 2003, quarter to quarter results has declined. In fact, the closing quarter of 2008 saw a decrease of 4.3% in lender mediated listings. Yeah, I know, not a staggering number, but I'll take it.
Want to know who has the most foreclosures? The numbers below are the percentage of homes in the specific area currently either in foreclosure or short sales. Take a look at the report to see where your area falls in the foreclosure mess.
Once again, I am recovering from some evil thing the kids brought home from pre-school. Let me tell you, it has been so much "fun". This one has been a real kicker...I have lost my voice and am going on day four of barely being able to talk. Talking to clients on the phone has proven difficult as no one can understand me. Add to that a transaction that has been trying to close for the last two months and I have to email everyone back and forth (talking is proving too difficult). Of course there are some, like my husband, who might prefer the lack of speech. Unfortunately for him, I can't hear that well either, so what ever "smart" comment he is saying to me is falling on deaf ears. Maybe this illness isn't so bad after all?
I had some free time in Saint Paul today and thought I would stop by Rice Park to see the ice sculptures done a few days ago in celebration of the Winter Carnival in Saint Paul.
It was really, really cold and my hands were hurting after a couple of minutes. Kind of hard to take a photo with heavy gloves on. I can only imagine how cold the artists became while carving this beautiful pieces of art.
