Amazing value! Beautiful rambler with equity potential in Crystal, only $154,900. Very solid house, big kitchen, lots of natural light, hardwood floors, and nice size living room. Tons of potential in the basement to add a second bathroom and a third bedroom. Big laundry room, workshop and storage area. Breezeway off the kitchen opens to backyard patio and entry to garage. The big backyard is fenced and perfect for kids playground and area for dogs to run! Safe and beautiful neighborhood in Crystal just blocks from groceries stores, parks, and close to everything you need. This one will not last!!
Where can you find a nice home under $200,000, on a good size lot, in a safe neighborhood and within 5 minutes from Minneapolis? There aren't a lot of properties for sale under $200,000, but if I was looking I would be paying attention to Crystal and Robbinsdale. Both cities have low crime, great neighborhoods, and good schools. Buyers have been scooping up great properties under $200,000 as inventory is twice as low as the Twin Cities region. So keep your eye out for properties under $200,000 in Crystal and Robbinsdale. If one comes up it might be a great deal.
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Condo prices in Loring Park are down about 8% over the last 12 months, but home prices are up 14% in Lake Nokomis area. We are seeing a record high amount of inventory in Loring Park, North Loop and Downtown West. But we are seeing a steady decline of inventory in Nokomis and that is pushing up prices to all-time highs. Watch downtown inventory levels this winter to see if they increase even more. Typically, we see a decrease in new listings in the winter months, but we could see increases with more people looking to move out of downtown Minneapolis.
Rarely do I see graphs like this in Minneapolis. There is a 12 month supply of homes in Loring Park, but at the same time Kenny has only a 1.3 months supply. And look how fast it went up this summer. In April it was at 2.8, but by July it was at 7.7. At the same time Kenny stayed at about 1.5 during spring and summer. So I think this was from the unrest downtown and because of Covid-19. Much of downtown Minneapolis neighborhoods have seen big increases in inventory over the last 6 months. We are also seeing price drops downtown. Loring Park prices are down 6% from last year at this time to $262,500, while Kenny home prices are up 3.6% to $360,000. Typically we see listings pull back in the winter and then a lot more come up in April. With this much inventory already out there, it will be very interesting to see what happens with prices and what the levels of supply will be at come April 2021.
Inventory in Kenny, Armitage and Lynnhurst is down compared to last year at this time. Sales are up 7.4% in Kenny and 20% in Lynnhurst over the last 12 months.
I was looking at the housing data that just came out today and I saw something very interesting. In Minneapolis the months supply of homes available for sale has increased to the highest levels since 2015, but it has decreased on average in the Twin Cities during that same time period. If you look at the graph you can see that every year Minneapolis home inventory compared to the rest of the market stay in line with each other. Did the protests and riots cause people to move out of Minneapolis? It is hard to say, but it is very interesting to see the supply of homes diverge like this for the first time in years. Winter is coming and it is getting cold fast. We are going to see a big drop in home sales over the next few months and I expect to see big decreases in average sales prices too.
It is starting to get cold. Every year around this time I wonder why I still live in Minnesota. I am still seeing low inventory in most of the market, but there are many properties that are sitting on the market. If the property is in an amazing location, great condition, and priced well, then I am seeing multiple offers. But if there is nothing special about the property and it is overpriced, then the market isn't bitting. So I see more price reductions coming, fewer listings and fewer buyers as we get close to the holidays and winter. Over the next 6 months we are going to see a big drop in home sales like we do every winter so keep your eyes out for good deals. It will be interesting to see what happens after the election and with Covid-19. There are some people in the real estate game that see a big crash coming, so keep your eyes on what is happening. South Minneapolis still has extremely low inventory and interest rates are super low as well so there is still going to be upward pressure on prices.
I have been looking into modular home building. I recently toured a modular manufacturing plant to see how the building process works. You can pretty much build the same basic house as you would if you built it on site. The benefit of building modular is that it can be built faster and for a lower price. The only problem is that the sections of the home need to be shipped into the city on big trucks and with the narrow streets with big trees on the boulevard in Minneapolis modular building is more difficult. But it doesn't mean it can't be done. There is a 30 unit modular apartment building that just went up on 42nd Street and Hiawatha. I drove by once a day for a week to see how they put it together.
From my experience most buyers don't think about price per square foot when they are purchasing a home. That isn't to say that they don't ever think about it, or that it isn't an important consideration when making a home purchase, but typically buyers will buy the house that is in the best condition and location and in the price range of their budget. If the price per square foot is higher or lower, that might be a factor, but overall they are judging the home on how it feels and if it feels like home. But lately I have been looking at the price per square foot numbers just because it is a decent reference point to use when you are touring properties. Also, if you are looking at building a new home the price per square foot number is important because appraisers use that number to get a general idea on how they value a proposed new construction property.
I read an article in Finance and Commerce the other day about increasing new construction pending sales in the suburbs. I have lived in Minneapolis since 2002, but I grew up in Chanhassen before I moved to Minneapolis. Back in 1991 when my family moved to Chanhassen it was a very small town, mostly farmland, but it was starting to develop and my Dad actually built three homes in Chanhassen in the 1990s. Today, Chanhassen is one of the most popular suburbs west of the Twin Cities. When I read that new construction pending sales was up 27%, I wasn't surprised, but I did take a second to think.
I was looking at a graph of historical mortgage rates today. In August of 2018, 30 year mortgages were about 4.5%. But in August 2020, 30 year mortgage rates are about 3%. On a $350,000 home with 20% down that is about $238 difference per month. So you can spend the same amount of money as you could two years ago, but your payment is $238 lower today. That is a great deal and that is one reason why we are seeing so much demand for housing. It is hard to believe, but just four years ago the median home price in the Lake Nokomis area was $238,000 compared to $318,000 today. That is about a 9.5% increase per year. So this is good if you own property because your equity is going up fast, but it is making home affordability a bigger problem in south Minneapolis.
Nothing special about this post other then I just wanted to show this cool stained glass piece in a condo I toured the other day. When I see something like this it really makes me happy because I love it when people do unique things like this to their homes. When I was growing up my Dad put a piece of stained glass in our dining room window and I always liked it. There is something about stained glass that makes the room feel good. What I like about this is the owner just used two nails and hung the glass frame right over the window. Not only does the piece add privacy, but it gives you something nice to look at and adds a touch of personality to an otherwise basic bathroom. I wish I would see more stained glass in homes, it is rare to see. I have looked into doing stained glass pieces in the past, but never did one. Maybe now is the time to make it happen. If you are looking for a great home in south Minneapolis, give me a call. I would be happy to help.
Every year in Minneapolis we see home sale prices increase between winter and summer In February 2020 the median home sales price in the Lake Nokomis community was about $273,000. Today the median sales price is $340,000. That is a huge increase in just 5 months. That is a difference of $67,000, which could pay for a new garage or a new kitchen, new bathroom, new siding, windows and roof, etc. If you buy the right house and know how to spend it wisely $67,000 can go a long ways.
When is it worth spending more money when buying your first home? Let's look at the $350,000-$400,000 price range to answer this question because there are a lot of first-time buyers in this price range. Most first-time home buyers are either going to get married or they just got married. Many will eventually have kids and soon the home they buy today will be too small. They will need to sell so they can buy a bigger home for their growing family. If you find yourself in this situation it might be a better idea to spend $400,000 or whatever the upper end of your budget is if you can afford it.
The death of George Floyd and the protests and riots that followed hit Minneapolis like a hard unexpected punch to the face. As of right now we don't know what will happen, but I believe most people who live in Minneapolis want to live in peace. In terms of real estate prices the damage from the riots is not good. There will be a lot of insurance checks cut and some people will win financially, but others will lose a lot. Most of the buildings will be rebuilt for the same purpose or the land could be used for a totally different purpose. A lot of work needs to be done and it will take many years to rebuild.
The under $350,000 price range is hot. I am seeing multiple offers on pretty much any nice home in a good location that comes to the market in south Minneapolis. I have seen 9-10 offers on one property and homes selling in under 24 hours for over $30,000 above list price. So there are a lot of buyers out there, but not a lot of inventory to choose from. It is harder to schedule showings because most sellers are not allowing overlapping showings so often you only have 15-30 minutes to tour the property. I try to get to the property early. I like to walk the exterior and the yard to judge the condition so I can spend all my time inside the house looking for elements of value and problem areas as well.
We can't predict the future consistently. Everyday is different and unexpected things happen. But people will continue to get new jobs, get married, have kids, downsize, etc. Some of our life's biggest moments involve buying a home soon before or after the big event. Couples often buy a home before or after they get married or before or after they have kids. A lot of families sell their existing home and buy a bigger home for their growing family or older parents sell their bigger home for a smaller one when the kids move out. Often a sale of a home is not long before or after these life events.
These two graphs tell you a lot about the real estate market in Minneapolis. The first graph shows the number of homes for sale each month over the last ten years in the $250,000-$375,000 price range. As you can see every winter total homes for sale drop dramatically compared to the summer months. The other graph shows total sales each month. Again, sales drop big time in the winter compared to summer. The bottom line is people don't like to move in the winter in Minneapolis because it is so cold and because of the holidays. There is just not a lot of good reasons to move in the winter when you can wait until spring or summer when it will be a lot easier and nicer outside. On the other hand, the #1 benefit to moving in the winter is that prices are lower in general, but that is about it.
The COVID-19 nationwide crisis is having a massive impact on Minneapolis homeowners. Many are losing their jobs or their incomes are dropping dramatically. The city of Minneapolis can help homeowners by waiving the property taxes that are due May 15th. If the average home in south Minneapolis is worth about $300,000, then the homeowner probably pays around $4500 in property tax. If the city of Minneapolis waived 50% of that fee then the average homeowner would save around $2250. Saving that much money at this critical time would really make a difference. It wouldn't be enough to compensate what most homeowners lost if they just lost their job or their income went down, but it would be better then nothing.
It is good to think of different possibilities during times of crisis. Sometimes you can have a good idea and that leads to your next great deal. One thing to think about is that a lot of sellers are going to hold off on listing their homes for sale for the next 14-30 days. From one perspective this isn't a bad thing. We have been in a super low supply era for almost 4 years. When the market crashed in 2008 there was a 8 month supply of homes on the market. Right now we have about a 2 months supply of homes for sale.
The black sawn event happened. The economy was going strong, but now we can't even leave our houses. This crisis reminds me of 2008 market crash. I don't think this virus is going to be as bad on real estate in Minneapolis as the 2008 crash was. With that said, if there is uncertainty in the market, then the real estate market will not be the same as it was just a few weeks ago. Showings dropped over 30% on homes for sale that are listed over $1 million, but showings increased 4% on homes for sale under $350,000. The under $350,000 market is still hot. The first-time home buyers are in that price range; they make up the largest portion of the market. It will be interesting to see what happens. Interest rates are low. I am hearing 3.3% for a 30-year mortgage with good credit. That is a very good deal on long-term debt.
The city of Minneapolis makes more money in tax revenue per acre on multi-family properties compared to single-family properties. For example, if there are two average size parcels of land in Minneapolis with single-family homes on each parcel and the value of the two parcels is $300,000 each, then the total value for both is $600,000. The city taxes each parcel at 1.5% of its value so the total city property tax revenue from those two parcels is $9,000.
In 1950, a home buyer could get a new home in St. Louis Park with 3 beds, 1 bath, 1000 square feet, unfinished basement, no garage, adjusted for inflation, $90,000. In 2020, the average new home in south Minneapolis is 4 beds, 4 baths, 2800 square feet, two car garage, $619,000. We could make homes a lot more affordable if we built smaller houses. We can start building 3 beds, 1 bath ramblers again, but the incentive is to build bigger. We can change that by providing $20,000 tax credits to any American that builds a home 1200 square feet or less. This would encourage people to build smaller homes. As a result, we would have more affordable housing; If the new homes are energy efficient enough to pass the Zero Energy Homes program, then there would be another $10,000 tax credit. You could stack both credit and build a 1200 square foot or less rambler that is Zero Energy certified and get $30,000 in tax credits.
Inventory levels are extremely tight. The economy is on fire and demand is very high. If you look at these graphs you can see how low inventory levels are. It makes it hard to find deals. It makes it even more important to get a good property. It is going to be a very competitive year so get all your financing in order and start touring neighborhoods.
Finally! The day has come for the Tiny Duplex professional photos. It feels great to see these. I love the way they turned out and my wife Megan did a great job decorating. This was the lowest price duplex I could build myself, but still qualify for the Department of Energy Zero Energy Homes program. It was my first new construction build. I did end up doing a number of upgrades such as LP siding, ZIP-R sheathing, triple pane windows, mineral wool insulation, smart vapor barrier, natural stone in showers, granite countertops, polished concrete floors, maple cabinets, and air exchange HVAC system. So I could have done it for less, but I wanted to get some good products where I really needed them so I am happy I did that. The HERS score is 43 which is pretty solid for my first new construction. Now I can enjoy it.
My Tiny Duplex is officially Department of Energy Zero Energy Homes certified. What does that mean? It means that I followed a bunch of building guidelines that were put in place by the best building scientists and builders in America. My HERS score was 43. What is a HERS score? I am going to attach a link here that explains the HERS score in detail, but basically it is a measure of how efficiently the home uses energy. The score is based on 0-150 and the closer to zero the more efficient your home is. The average new construction HERS score is 100.
In 2014, median home prices in the Lake Nokomis community were $200,000. If you bought a house with a 20% down payment and a 4.5% 30-year mortgage, then your payment would be about $1136. That is assuming yearly property taxes are $2890 and home insurance is $1100. Today median home prices are about $297,000. If you put 20% down, had a 4.5% mortgage, yearly property taxes were $3850, and home owners insurance is $1300, then your payment would be about $1635.
How 1031 Exchanges, Opportunity Zones, and the 2040 Plan Are Driving Up Real Estate Prices In Minneapolis
There are a lot of people doing 1031 exchanges right now in Minneapolis. That is a big reason for the multi-family purchases and new construction development. Many real estate owners who bought around 2012 are sitting on equity gains and are selling tax free with the 1031 exchange option to invest those gains into other real estate. This exchange will save them up to 30-40% in taxes. The Opportunity Zones in Phillips, Powderhorn, and Camden neighborhoods encourage even more investment because after 10 years of owning the asset, if the investor sells, then they pay no capital gains tax. So buyers are jumping in to Opportunity Zones because their ROI will be higher versus an area that is not in an Opportunity Zone.
Not many people like to move in the middle of winter in Minnesota. But buying in January is actually a great time to buy because there are not nearly as many buyers shopping or making offers compared to spring and summer. Sales drop up to 80% between the middle of summer and the middle of winter. So now is the perfect time to get ready. Here are a few steps you can take right now so you are ready to buy in 2020.
Out of all the homes I have owned I like ramblers the most. I like them for a few reasons. First, most are on one level which is nice when remodeling because then you aren't going up and down steps all the time. Second, most ramblers are easier to work on then the older homes built in the early 1900s. I can demo a kitchen in a couple days and I can demo a bathroom in a couple of days as well. Usually there is a wall that can be removed to open up the kitchen. Third, most ramblers have hardwood floors. I love hardwood floors, I used to refinish them for a living, so I have all the refinishing equipment needed. I have found that refinishing hardwood floors look beautiful and if there are any areas in the home that don't have hardwood floors you can add them. Fourth, if you are lucky, find a rambler that has sheetrock instead of plaster walls. Plaster is basically concrete, it's super heavy and a big pain to demo. Sheetrock is super light, not nearly as hard to demo, and you can patch sheetrock pretty easily. So in the end, I like ramblers. If you can find one in a good location at a good price go for it.
The irony of the new 2040 Plan in Minneapolis is that land prices will go up even faster. More Investors are going to enter the market because of the zoning change and will be looking to demo starter homes to make way for new triplexes. There will be transactions all over Minneapolis with this purpose. This is good for the city because a new triplex is valued at $800,000, versus a small starter single family home that would be worth around $200,000. So the 2040 plan is going to generate a lot more tax revenue for the city, but it's not so good for the first time home buyer that wanted to buy a $200,000 starter home because now it doesn't even exist.
I always wanted to build a new house and I finally did this last year. I built a Tiny Duplex as It is only 1100 square feet, no basement, and each unit is about 520 square feet, 1 bed, 1 bath, open kitchen/living room. It is a one story rambler, so I was able to build it with just one framer and me helping as labor. Then I finished it off with a carpenter inside.
Home prices in Minneapolis have dropped about 10% since May 2019. The median price in May was $301,000, but now the price is down to $271,500. The $300,000 price tag was the first time home prices in Minneapolis averaged above 300k. The days of affordable houses in south Minneapolis seem to be just a good memory. Even in north Minneapolis median home prices are up also 400% since 2012. The median value in north Minneapolis today is almost $200,000. The number of homes for sale since September has dropped 25%, which is a very steep decline in just the span of a few months.
I don't complain about property taxes much. I like Minneapolis and I think we have a pretty good city government. We have clean parks and the streets are generally clean as well in most parts of the city. I understand it takes a lot of work to keep a city running and property taxes pay for 1/3 of the total budget.
Property taxes increase with home values. Home owners that were paying $70 a month in property taxes in 2012 are paying $285 a month in 2019. These increases has hurt the average Minneapolis residence since most don't have a lot of disposable income. The city of Minneapolis can help offset this burden by providing property tax credits. In addition, the city could pass a property tax credit to any landlord that then gave that tax credit to lower the rent. So if any Minneapolis home owner passes their $3,000 property tax credit on to their renters, then the home owners get an additional $3,000 tax credit. So it would be a $6,000 property tax credit total that would get split between the renter and the home owner. That is a win for the renter and the home owner. It puts cash directly into their pockets.
Back when I was sanding floors for a living I refinished a lot of hardwood floors on foreclosed homes in North Minneapolis. I worked for a number of investors that were buying dozens of homes for $30,000-$60,000, remodeling them and renting them out. This was in 2008-2012 era when the real estate market collapse. The median price for a home in the Camden neighborhood went from $160,000 in February 2007 to $48,000 in February 2012. The median price for that same area today is $190,000.
I have a simple solution that would help rebuild the rough spots of North Minneapolis. If I was in charge I would give any Minneapolis resident 18 years or older a $20,000 a year tax credit if they work in North Minneapolis for 3 years or purchased a home in North Minneapolis and made it their primary residence. I would also give a $20,000 tax credit to any Minneapolis residence if they bought a commercial property in North Minneapolis and fixed it up and rented it out.
I just got back from Mississippi. I love Minneapolis and I am glad to be back, but its so cold here. Even with the cold weather I am still looking for deals everyday. That is my favorite thing to do. I look for client deals and my own deals. Somebody is always looking to buy and sell. I love this time of year because a lot of motivated sellers are putting their homes on the market and the buyers are staying inside. It's too cold for most people, they have holidays coming up, and they just don't feel like buying. They figure they will just wait until April. But by April competition will be a lot higher and prices will rise fast. I like looking when nobody else is.
I have been in Mississippi for about a week and I have really enjoyed myself. I love looking at homes, checking out prices and seeing what you can get for different prices relative to Minneapolis. Down in Meridian land and homes are cheap compared to Minneapolis. The good thing about Minneapolis is that there are lots of jobs, lots of opportunities and it really is a great city. There are many great hospitals, schools, lakes and parks. It's easy to get around and there is an airport very close by. But there are also a lot of people, probably more then 500,000 if you include the 1st ring suburbs. According to Zillow, the median square foot price for homes in Meridian is $67 compared to Minneapolis the median price is $267 per square foot. That means its almost four times more expensive in Minneapolis per square foot compared to Meridian. So it got me thinking about how expensive homes are compared to other parts of the country. I love Minneapolis, I will always live here most likely because my family is here. Meridian is a nice town though, only 37,000 people and there are a lot of homes for sale and lot of vacant buildings that you can get for a low price compared to Minneapolis.
I am in Mississippi visiting family. It's my first time to the state and one of my first times to a real southern state in America. I have been to Georgia, Florida and Louisiana, but I didn't get to explore many towns or countryside when I was there. Mississippi is so beautiful, lots of amazing homes, people, and landscapes. There are a lot of towns down here that don't have nearly as many people as they used to in the 1950s and 1960s so the economies aren't as strong. It seems the south is still recovering from slavery and Jim Crow. Having grown up in Minnesota, the culture is different in the north versus down south. Much of the civil war was fought in the south. I see so much opportunity down here though.
I built my first new construction house. Overall, I learned a lot. Having a good blueprint is critical. I also learned that making changes to the plan after you start construction can create confusion if not properly communicated to all the contractors. For me, since it was my first one, I tried to keep it simple. I had never framed before so I worked along side a framer who had built dozens of homes and garages. He was very experienced at framing, windows, siding, roofing, and soffit and fascia. It was cold building in the winter, which I wouldn't do again. It makes building more difficult with the snow and cold. Also, if I did it again I would want to frame with a framing crew so I could get the shell up faster. If I built the same house again I would do it a lot quicker this time.
If I was running for president I would propose the following. Don't worry about the details now, just think big picture.
The first map shows all the single family home listings in south Minneapolis currently for sale under $400,000. The second map shows all the single family homes for sale under $400,000 and built after 1945. Only 41 properties or 20% of the market is under $400,000 and built after 1945. Why did I pick the year 1945 and under $400,000? I picked under $400,000 because most buyers in south can afford that right now. Also, based on my experience touring 1000s of houses built between 1880-1970s it seems that the homes built after or around 1945 have sold block foundations, central HVAC system, many have two foot overhangs on the roof and are typically pretty good homes. They are also a lot easier to remodel compared to the older 1900s homes. So they have a lot of value that the older houses don't necessarily offer as easily. So double check those ramblers and cape cods because you won't get nearly as many shots at them as the older houses.
I like the idea of permit rebates on new construction and remodeling projects in Minneapolis to help off set housing costs. Having just built a house I can say that new construction is very expensive and it would be very encouraging to get a 100% rebate on new construction permits. I am not sure what that would do to the city budget, but if I was in charge I would give any Minneapolis resident that builds a new home a 100% permit rebate after they get their certificate of occupancy. On my duplex I think the permit was around $8,000. I would also give the rebate on any remodel project. I would be interested to know how much money they generate off the permits.
This is a map of all the new construction single family homes built and sold since 2016 in Lake Nokomis, Longfellow and Powderhorn that have been listed on the MLS for sale. 81 total properties are listed. What I find most interesting is that there aren't a lot of homes built in Morris Park. East of 34th Street only two houses have been built. I have always liked Morris Park and have thought it to be a great neighborhood to live in. Many of the homes in Morris Park have MAC updated windows, HVAC systems and insulation. It has been on of the lowest priced neighborhoods in south in the Lake Nokomis community. But there just haven't been many new construction homes built lately. Compare Morris Park to Standish that has 12 new homes and Howe that has 7 new construction homes since 2016. So a lot more activity in Standish and Howe and I think the primary reason is the area is more walkable right now. They are a little closer to the light rail and have a few more commercial spots that are walkable and are popular. So maybe Morris Park still needs to catch up to Standish, but just keep your eye open, I think Morris Park will continue to grow.
The median price of a single family home in December 2017 in Southwest Minneapolis was $325,000. By July of 2018 the median price jumped to $469,000. Only a few months later in October 2018 the median price dropped back to $354,000. Therefore, buy in October and December.
I was out last night touring properties. I am seeing a lot of price reductions and motivated sellers. This is not unexpected, during winter sales always drop by up to 80%, but it is very interesting to see it play out daily when I am touring properties. Some properties will still command a lot of offers and can and will sell above list price, but if they do it will be because they are priced correctly. If you can buy now it might not be a bad idea because prices are going to go back up in April and May. Unless some big economic drown turn happens history will most likely repeat itself and if you can get a deal you might be saving $30,000-$100,000 on a purchase. For example, in this MLS graph of southwest Minneapolis you can see that from February 2018 to July 2019 prices jump 30% on average.
The screen shots aren't the greatest looking but they get the point across and that is all I am trying to do. I did a search for sold properties built after 2013 in the highlighted areas. I call this area Southwest Minneapolis and the edge of east Edina. There were 320 total sold homes and the vast majority of those homes are just west and east of Xerxes. That is very interesting. I know that area is the borderline for the Edina school district. I used to work that area a lot more, but its very hard for the under $300,000 home over there and a lot of my buyers during that time period were in the $300,000 or less. But nevertheless, home prices and land prices have gone up a lot in that area.
It is only Tuesday and I am already seeing a lot of price reductions on properties. Pending sales from August to September dropped 20% and right now there are 421 active listings available in south Minneapolis. That tells me that buyer demand is cooling off and the inventory that didn't get purchased during the last rush of the fall selling season is waiting to get sold. Right now it is a good time to buy because more homes are on the market and fewer buyers are shopping right now so the leverage to the buyer has increased.
Where are all the home builders? There are not a lot of incentives from the city, state or federal level to become a licensed general contractor/builder. In fact, there are a lot of liabilities when you build a house and when you build for other people. With labor shortages in construction growing it makes it even harder to find talented and experienced builders.
Being a home builder requires a lot of skills in different areas of construction and project management, knowledge of city and state building codes, plus other skills. The builder has to be able to see the whole project, but also know all the details so the building is well built. There just are not a lot of people that have all that experience that are willing to become builders, unless you give them incentives.
Construction prices are going up 4% or more this year in the Twin Cities. I just read that concrete prices are going up 9% this year. Why? I can only speak from experience. I did 8 years of hardwood floor refinishing, and have remodeled over 20 homes, I just built my first new construction duplex. So I have worked with a lot of contractors and from my perspective I don't think there are a lot of incentives to be a new construction builder.
As of right now there are 72 active single family listings in Lake Nokomis. Out of those 72 listings 27 are between $200,000-$300,000 and 23 of the listings are between $300,000-$400,000. So about 70% of the market is between $200,000-$400,000. Within this area there are neighborhoods where the median prices are a lot different. For example, in Morris Park the median list price is $249,000 versus in Hale the median list is $416,000. If I was looking for a deal I would be looking in Morris Park at $150,000 and if I was in Hale I would be looking for something around $250,000-$300,000. Right now there is not a lot of upside in Morris Park though once you start thinking about it.
So I am looking for deals and I can't find any. Not many new listings popping up and that is because it's the end of November. Based on MLS data new listings in Minneapolis drop 30-40% between October and November each year. So right now there aren't going to be nearly as many new listings coming to the market over the next month. New listings will go down as well during December, January and February and then will start picking up again in March. A lot more buyers start shopping in March and April and through summer. So if I was looking, and I am looking, I would be looking now because many buyers wait until next spring to buy so there will be less competition for the savvy buyer if you shop now. In addition, sellers can be a little more motivated in the winter so watch for the good deals. If you need buyer and seller representation give me a call or email.
I built a duplex this year. It was the first house I ever built. I learned a lot of valuable lessons. One lesson I learned is you need a model. And once you make the model you figure out everything you would do differently to make it better, lower price, and build it quicker. If the city of Minneapolis wanted to get a lot of new energy efficient affordable homes to the market quickly they should make a model. Basically, you would take about $1,000,000 from the budget or less and use that money to build as many tiny houses as you could. They would test them, adjust, do a few designs. Then once they have a good model down they make a material list, a how to build guide, they create an inspection for the model, and have the blueprint online for people to see and get familiar with. So then people can take this model and put it on a survey and build it. During the experimentation period contractors from around the city will get a $500 rebate if they go to the site for a tour and see how the buildings are built. They also would get a $500 rebate if they work on one of these tiny houses around the city. So this model would be cheap and easy to build, plus contractors in Mpls would be incentivized to work on them. It would be a way to inspire people to build.
Home prices have gone up faster then home owners incomes in Minneapolis. As a result, property taxes are a lot higher then they were 5-10 years ago, but most home owners income did not grow at the same pace. Therefore, most home owners have less positive cash flow on their property now then they did in the past. If they are renting their property they probably have tried to pass that increase on to renters and rents increase in price as a result. In addition, there is a shortage of low priced, quality housing for rent in Minneapolis.
I saw this graph on Twitter today. I remember when the market crashed. It changed everything. I was just a little too young to have been buying homes yet because I was still in college, but it hit the economy and a lot of people hard because they were negative 20-60% equity on their homes and couldn't make their payments because they lost their job. Prices are getting high in my opinion from the standpoint of the first time home buyer market. I don't know the exact numbers but from my experience in south Minneapolis the under $300,000 home buyer really drives the market.
I really like the graphs I get to use on MLS. They are interactive and show a lot of valuable data in graph form. This is a graph of homes Homes For Sale In Minneapolis on a monthly basis. As you can see the supply of homes is highest in October and September every year. This makes sense because the majority of sellers will list once the weather gets nice and the buyers will come out at the same time. Sales start shooting up from March until July and then they start to slow down again. Then most buyers stop shopping around September so sales drop as well. I see this time as a great time to find a deal because there are a lot to choose from and not a lot of buyers compared to June and July.
One of my favorite things to do is tour properties. I just like going through homes. I used to go through 10 homes a day back when I was selling 80 houses a year. That was crazy. But I learned a lot about the market and I wrote a lot of offers, I learned a lot about buyer and seller psychology, and what make homes valuable or not. Having been involved in so many transactions I know what can happen, good and bad. It really is a valuable experience to have been involved in so many transactions and to have toured so many properties. My experience remodeling and building my own houses is super helpful as well. My favorite areas to tour are south Minneapolis because the homes are close to my house. I like Richfield and Bloomington as well, it really doesn't matter. As long as I am working with a serious buyer that is ready to buy, then I think its pretty fun to tour homes. I like seeing all the different construction methods and styles of homes, I like understanding why one home is worth more then another. The best way to determine value is to tour properties. I always say new agents and all agents should spend time touring properties, learning the market. There is just so much valuable information you gain when you really pound the pavement. It doesn't cost much either other then time and gas. So pay attention and tour homes. There are a lot of deals that can be found, like a diamond in the rough.
I ended up doing two bathroom remodels and building two bathrooms from scratch this year. I will share a few photos from both projects. Both bathroom remodels were pretty nasty, everything was from the 70s and they just needed to be totally gutted. So I demoed the sheetrock, insulation, flooring and took out the doors, toilet, sink and mirror and replaced all of it. I did the traditional fiberglass batts on the exterior wall on the upper level bathroom just because I wanted to try it. I ended up doing the mineral wool in the interior walls for sound proofing and I did the same thing in the downstairs basement. The fiberglass comes with a vapor barrier, the mineral wool you have to install a vapor barrier yourself if you want to use it on the exterior wall. Overall, the mineral wool is easier to work with and less itchy. I think the R value is better as well, but either one does the job. On my next project I will use the mineral wool again because I like it better. I added a picture of the downstairs bathroom so you can see the mineral wool and vapor barrier. I ended up doing the stone subway tiles in the downstairs shower. The upper level was my first tiling job. It actually turned out pretty good. I got it level and square, a couple spots I would redo, but it was pretty fun and not that difficult. It would be fun to do 10 in a month and get really good at it. I like subway tiles. I would use them again but I would probably use stone like I did in the lower level bathroom.
I didn't do a basement because I plan on renting this out and I wanted to save money as well. Most homes in America are built on slabs without basements, but in MN most houses have basements. I saved probably 40k I am guessing by not doing a basement. It keeps it simple because you don't need floor joists or stairs going from the basement to the main level, which saves space. Also, I didn't have to do shorings on the side walls of the parcel, didn't have to water proof the walls or install a sub pump because there is no reason for one since there is no basement. I was trying to figure out what type of flooring I was going to do and ideally I would do hardwood floors. But I didn't have enough clearance with the door ways and I didn't want to have any moisture problems. I figured I could polish the concrete and it will look pretty much like tile and it would be easy to clean. Plus I wouldn't have to worry about moisture getting trapped between the sub floors and it will last forever. I like that engineered hardwood flooring but it would have been twice as expensive. It ended up turning out nice, most people come in and they like it when they see it and it makes a lot of sense. I am going to put some rugs down in the bedroom and living room area. I really like how it turned out. The building inspector liked it as well so that is a double bonus.
This is the first new construction home I built. A duplex is really two houses. There is a foundation with a footing down the middle and around the perimeter, with four foot frost walls going up from the footings. Then there are two separate 2 by 6 walls down the middle of the units. The roof trusses rest on those walls and the outer walls on the eves. Also, each unit has its own electrical service, water heater, HVAC system. They do share a main water line, but other then that they are separate homes. I did a lot of the labor work for the foundation insulation, framing, roofing, windows, siding, soffit, facia, insulation, sheetrock, tiling, and some of the trim carpentry. I had a framer and a carpenter build most of it while I was the labor help. I helped design it, bought the materials, pulled the permits and met with city officials for zoning, building permits, and inspections. We passed all our inspections so its about ready to be lived in. I learned countless lessons on this project and gained a lot of practical building knowledge. I will have more stories and pictures to share. Doing all this made me a better realtor because I look at land and homes a lot different. I understand better how homes in south Minneapolis are built, how to find problem areas on a home and how to fix them. I know a lot more about what permits need to be pulled and how to navigate the city of Minneapolis zoning and construction codes. I learned a bunch of small details that really add a lot of value when looking for a home to buy.
My year long project of building my first house is nearly over. As I call it, The Tiny Duplex. Like I said, this was my first new construction house, technically it is a duplex so its pretty much two separate units. I learned so much on this project. This is a picture of the bedroom that has a door that goes to the backyard patio. I will post more pictures through out the year as I have a lot of them. I really like how it turned out and I enjoyed learning about the new construction process. I bought every single piece of material and I did a lot of the labor work as well. There are so many decisions that get made when building and there are a lot of codes and city zoning regulations and inspections that need to be followed as well. So overall, building this made me a better realtor. I am exited to start the next one, I think I will build a tiny triplex.
We just finished up another remodel. I think that is over 20 now, I loose count. Each one is different, this one I really liked because of the location being close to Minnehaha Creek. I also like that it acts like a duplex because there is a unit upstairs and on the main level as well. This unit has a separate entrance from the back yard which is nice because guests can go up on their own with privacy. We installed hardwood floors in the kitchen and refinished the floors in the rest of the unit. They were really bad and I didn't think they would turn out good, but I got almost all the stains out and they look great. The bedrooms I really like and the bathroom is nice with the climbing ivy over the windows. We are only a block away from Minnehaha Creek so it's nice being able to take a walk along the creek so easily. I learned a lot on this project, it was tough working on it through the winter, but we got it done. They are always harder then you think it will be, but rewarding when done. This was my first remodel since getting my general contracting license so that was cool to be able to pull my own permit. As a realtor it is always good to do these projects because I learn a lot more about how homes are built, problem areas, ways to increase value, things like that. If you are looking to buy in south Minneapolis or sell please call or email. Thank you.
2530 E 34th Street #112, Minneapolis MN 55406
4411 Minnehaha Ave, Minneapolis, MN 55406
This is truly a rare property in East St. Paul. Not only does it have a huge lot, but it’s also surrounded by trees and tucked away from the main road, making it a secluded space right in the middle of the city. It’s a peaceful and tranquil setting year-round.
The home is beautifully remodeled with a new kitchen, new windows, remodeled bathroom, new furnace and AC, refinished hardwood floors, new patio, and a roof in excellent condition. Plus, there’s potential for a second bathroom upstairs and space to finish out the basement.
One of only a few houses in all of East St. Paul with such a unique piece of land, this home has an incredible amount of green space, trees, and wildlife, which makes it very valuable compared to other properties in this price range. At only $190,000, it’s a phenomenal deal that you definitely don’t want to miss.
If you’ve ever listed your home for sale in Minneapolis, one thing you probably noticed is how vastly different list prices can be – even when homes are apparently similar to the average passerby. After all, our neighborhoods tend to lean heavily on one type of house style over another, largely because when the bulk of homes in a certain neighborhood were built, people were either using the same builder or the same/similar building plan (especially since they were simple to use or more affordable than custom options).
It’s now 2019, and the beginning of a new year means there are endless possibilities ahead. If you ask me, the future is looking very bright – especially in real estate. So, if you’ve got equity on your mind and are thinking about selling your house in 2019, I’ve pulled together a few of my top tips. Follow these, and I guarantee you’ll see a much higher sales price in the long run.
One of the biggest issues that causes homes to either sit for extended periods on the market or sell for far less than the asking price is incorrect pricing (usually it's a too-high price for what the market demands). It sounds obvious, but the best way to increase your home's sales price is to price it correctly. You'd be surprised how many people don't follow that strategy, though (and frankly, they get poor results as a consequence).
Want to know one of my top ten tips for making your house more marketable and selling it for more money? Take time to do the small repairs.
"With the new day comes new strength and new thoughts." -Eleanor Roosevelt
Mondays are known for the blues. Nobody wants to see an end to the weekend, and it's often difficult to jump right back into work after a few days of relaxing with family and friends. But Mondays don't have to be only negative. After all, they're a chance for us to start fresh, wouldn't you say?
I think it's really important to think about practical skills and how you can incorporate them into your everyday life. Too often in today's day and age, we automatically turn to hiring someone instead of taking the time to learn to do it ourselves; while that might be necessary in some instances where a project is outside of our expertise and abilities, there are so many things we can do on our own if we just put our minds to it. Plus, in the long run, it can save you a ton of money.
If there's one thing that costs barely any money at all, but can have a huge increase in the sale price of your home, it's cleaning it.
We just listed an amazing condo in Loring Park and it's one you don't want to miss. With 2 bedrooms (one is a master), 2 baths, a big open kitchen with an island, a sunroom and balcony, large walk-in closets, a spacious and welcoming entry, and a laundry room with excellent storage, it is unbeatable. The unit has over 1,600 square feet and two tandem parking spots in and underground/heated garage. Who could ask for more?!
I think the biggest thing in life is to be patient and to be consistent.
This home is in a unbeatable Tangletown location. Just blocks from Lake Harriet and some of the most popular shops/restaurants in southwest Minneapolis (Corner Table, Patisserie 46). It has a large enclosed front porch, rear mud room, spacious living/dining/ sun room with lots of southern natural light, rare main level powder room, updated kitchen with new granite counter tops, beautiful tile backslash, gorgeous hardwood floors through out the house, 3 bedrooms on upper level, walk in closet for master, with second bathroom, fenced in yard for dogs/kids and two car garage. This is an amazing home. Let me know if you want to check it out.
I have been in hundreds of condos over the years. One of my biggest pet peeves is the poor quality of building exterior, mechanicals, and poorly associations. But this property is a rare exception. The interior and exterior of the building are in near mint condition and the mechanicals have all been updated. The basement is very bright, open and clean which is rare. The unit itself has great southern natural light, hardwood floors, and two bedrooms, which in Uptown is very hard to find. You can walk out your door and hop on the bus or walk two blocks to Whole Foods and Lake Calhoun. Or you can ride your bike to Cedar Lake or Lake of the Isles which is just a mile down the street. If you are looking for a one of kind condo in Uptown it doesn’t get any better for under $200,000. Let me know if you want to see it or have any questions. The address is 2936 Drew Ave S.
The holidays can be a stressful time for people. Between family events, holiday parties, and shopping for gifts, the last thing most people want to do is house hunt. But in my experience, I’ve learned that November, December, and January tend to have the best deals for purchasing a home in Minnesota.
One of my favorite aspects about this home is the location. Its only 5 minutes to downtown Minneapolis and super easy to get on 94 or 394. In addition, it was built in 2004 so its almost brand new. The foundation, windows, siding, and mechanicals are all a lot newer then most of the homes in the neighborhood. The owner finished the basement and added a beautiful 3/4 bathroom and bedroom so it is perfect for a teenager or a kids play area.
I’ve thought a lot recently about accessory dwelling units in Minneapolis. Not only do ADUs offer potential additional streams of income for homeowners, but they also work to eliminate housing shortages, rent hikes, and environmental impacts.
We’re incredibly excited for our buyer, who closed on this amazing property today. Located in Lowry Hill in South Minneapolis, this condo has two bedrooms and two bathrooms with a laundry unit and underground parking. It has a ton of potential – especially for an Airbnb, and it has a really great view of Lowry Park. You really can’t beat that.
An important metaphor for life is the image of pushing the rock up the hill. So many people, including me, think that once we get it to the top, that’s the ultimate prize – we’ll be able to just relax with our backs against the rock and never have to push anymore. We tend to think that that’s all it will take for us to be fully satisfied and that after we reach that point, life will be easy and great. But what I’ve come to learn is that getting to the top of the hill and staying there is not the point.
Every year I talk about the benefits of buying in the winter. Though the reasons are pretty obvious, it’s worth bringing them up again because too often people forget that this is actually an excellent time of year to buy a home.
As many of you know, about five months ago I made the decision to shift my focus away from just working with buyers and sellers, and instead focus on building homes. In those past five months, I have learned a lot. It has been challenging, rewarding, and everything in between.
This is a one-of-a-kind, three bedroom home in great condition in South Minneapolis with a very rare extra large lot and huge yard.
One thing I’ve learned over the years is that it’s easy to be a critic, but it’s a lot harder to actually do the things that get criticized. Many people have told me that my ideas are impossible, or too “out there” to work. But I keep at it because I have a vision and truly believed in what I can accomplish.
Looking for a great condo for an incredibly value in Edina?! We've got you covered.
This is a completely remodeled 1700 square foot, 3 bedroom, 2 bath home, and it is absolutely gorgeous. It’s got a new 30 year roof, triple-pane windows, and new high efficiency heating and cooling systems – which all make the home very quiet inside and more energy efficient. Not to mention that it has brand new concrete steps and sidewalk, updated electrical panel, and fresh paint throughout the entire home. Plus, the basement has been fully finished, there’s a brand new kitchen with new cabinets, granite countertops, and stainless steel appliances, and there are two fully updated bathrooms with nice tile and stone upgrades.
This property is a huge equity builder and could easily be worth $250,000-$275,000. It has an amazing upper level master suite area, new privacy fencing, updated carpeting, glass block basement windows, a huge porch, and a giant basement that could be finished very nicely. The house has really good bones with beautiful natural woodwork that really gives the house character.
Why are so many homes overpriced right now? Well, part of the reason is that there’s an extremely limited inventory and it seems that because of that, people are just snatching at whatever they can get. The competition is really intense and it’s tough to get a decent home for a decent price. But it doesn’t have to be that way – not if we incorporate better design and more renewable energy.
This townhouse is one you don’t want to miss. Just blocks from Whole Foods (which was just bought by Amazon) and St. Anthony Main, it’s extremely walkable. Within minutes, you can walk out your door and down the street and have fresh organic groceries or grab some dinner before catching a movie at the St. Anthony Main theater. That’s not to mention, of course, that you’re also within walking distance to downtown and you have direct access to the amazing walking/running and biking trails along the Mississippi River.
Now that we’re fully into the Spring/Summer real estate market here in Minneapolis, what I’m seeing is that prices are at all time highs – even above all time highs. The inventory level is extremely low (especially in South Minneapolis) and it’s really tough for buyers to get a good house unless they want to pay a premium (and that’s usually for quality that isn’t as good). A lot of the homes I see for sale now need at least $50,000-$100,000 worth of work to retrofit them to 21st century energy standards, and that can add a lot to a buyer’s eventual bottom line.
Now that I’m moving more in the direction of building versus solely real estate (see my previous post here on Why I’m Retiring from Real Estate), I’d like to give you guys an update on some upcoming plans of mine.
I started my real estate brokerage three and a half years ago, and it’s been a really wild ride. At times, it’s been tough – dedicating all of your nights and weekends to your business and having to spend that time away from friends and family can be really difficult. On the other hand, though, this business has given me a lot of enjoyable moments and it’s been so much fun getting the chance to go through all the homes I’ve gone through and to meet so many great people and families who have since become amazing clients. I’ve honestly had such a good time getting to know each and every one of them and helping them find their first home.
This house on Bloomington Avenue is awesome. Not only is it in great condition (it has a well-cared-for brick exterior, a nice open layout, three bedrooms on the main level, a finished basement, and two bathrooms), but it’s also in a prime location. Located in South Minneapolis right on the border of Richfield, it’s just off a bus line and 20 minutes from downtown - you don’t even need to have a car. Plus, you’re just down the road from Target, Home Depot, and Lake Nokomis.
Located two blocks north of Summit Avenue and within walking distance to the Grand Avenue shops and dining, this beautiful Merriam Park home has a large, fenced-in backyard, new 2+ car garage with loft storage, lower level family room with radiant in-floor heat, and 2nd floor laundry. Plus, it has so much character and style with original millwork, hardwood floors, and updated kitchen and baths.
This property is by far one of the best values on the market. South Minneapolis is a tough place to buy right now and frankly, there isn’t a home in the area that you can buy that has two bedrooms and is move-in ready for $100,000, let alone $150,000.
Sometimes you have to break down to have a breakthrough. I definitely learned that this weekend. I was really stressed out with work, trying to help a lot of buyers but unable to find properties in this market, writing on properties but not winning in multiple offer situations, and having deals get canceled because of bad inspection results, and frankly, it all started to get to me. It can be frustrating when things seem to be going bad left and right, especially when you’re working so hard all the time to help your clients but you feel like you’re not making any progress.
I’ve been doing a lot of research on high performance housing lately and I really think it’s the future. While a lot of houses in Minneapolis are known for their charm – largely because they were built nearly 100 years ago – that charm also comes with some energy inefficiency. Today, though, there are some amazing ways to build new with energy efficient methods that can save you some serious money on utilities and long term cost.
“Don’t be afraid to fail. Be afraid not to try.” -Anonymous
There is a total shift happening in the market right now. I’m not sure if home prices are going to go down, but what I do see is a trend towards either retrofitting older houses with high efficiency standards, or demolishing old homes and building new.
Recently, I've begun to see a pattern: people from the East and West coasts are inquiring about property in Minneapolis and making the move here. What I think is happening is that they are hedging against economic uncertainty by finding a safe place to invest their cash - right in our city. We have great schools, great parks, and so much to offer, not to mention that real estate on the coasts has become enormously expensive.
2017 is going to be a year unlike any other. Real estate in Minneapolis and the Twin Cities is going to break all records for low inventory, and I’m already seeing a massive shift in the market. There are virtually no homes available, and there are multiple offers the instant the home goes to market. I’m not sure where prices are going to go, but my gut is saying they’ll rise.
Since we are heading into the selling season, I want to talk briefly about land values and why they are so important when you’re looking to purchase a home.
In life, I think it’s really important to reflect on things happening around us, and what is especially on the country’s mind today is the inauguration of a new president. I see a variety of emotions on Facebook: some people are happy, and many other are unhappy and worried about what the future holds.
In today’s market, many of my clients have had to face back to back multiple offer situations, which are often difficult to win. Typically, we will have to write three offers for each of our clients before they finally win a bid. That’s just the nature of the very competitive market here in Minneapolis.
Well, we’ve officially started 2017, and I’m really excited for this year. One thing I’ve been thinking a lot about lately is how to get better and how to improve my value in the marketplace; how can I gain more skill, offer better services to my clients, and better leverage my time? What I’ve learned is that in order to achieve these goals, I have to keep learning from other people.
I can already tell that this year is shaping up to be a very aggressive market in South Minneapolis. I typically judge how the market is going to be based on the activity level in January right after the New Year. In this case, since Christmas I have already received at least 4-5 calls from sellers looking to sell and numerous other calls from buyers looking to purchase a home.
This year, for the first time since 2009, home prices in Minneapolis did not drop between October and November. In fact, they actually went up. Now why is that so significant and strange? Well, typically every year since 2009 (and in years prior to that), home prices followed a pattern where they decreased around late fall/early winter. So this shift in the norm means that 1) supply is still very limited, 2) demand is still very strong, and 3) Minneapolis continues to be a high demand area.
Yesterday I achieved a big milestone in my life: I passed my residential builder’s license exam, which makes me eligible to become a licensed residential builder. I’ve always loved houses and dreamed of one day getting the chance to create my own. As a little kid, I would spend hours playing with building blocks and Legos, making structures left and right. I knew one day I’d want to do it in the real world.
For some reason, I’ve recently attracted a lot of people who have not done a good job or followed through on their commitments. I’ve hired contractors who really didn’t know what they were doing, went completely off the grid after only completing part of a job, or did not care about following the rules (refusing to provide documentation proving that they were licensed, among other issues). Ultimately, it became clear to me that what they wanted was to get paid for work that they didn’t complete, and that’s a problem. And while hiring a few bad contractors may not seem to be that big of a deal, it really can be debilitating because it delays your project and costs a lot of extra money.
Craving tacos? Looking for a warm and cozy respite from the cold? Want an ice cold beer and a bowl full of chips 'n salsa? Then head over to Pepitos on 48th and Chicago in the Field neighborhood, where you'll find all of the above and more.
Every so often a circumstance comes up in your life that makes you really thing about what’s important to you. You have to slow down and decide what it is you want out of life.