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A New Home off Lake of the Isles – OFF MARKET

2719 Dean Parkway2719 Dean Parkway, Minneapolis

Located one block from Lake of the Isles and over looking Kenilworth Lagoon, 2719 Dean Parkway is unique among properties for sale around the Chain of Lakes. Constructed to ultra high-end specifications by Stonewood Builders in 2012, this home combines spacious open-plan living with stylish comfort and is magnificent for sophisticated entertaining. A huge, attached two-car garage with circle drive is a winter dream, while the front porch and rear deck provide special outdoor options in the warmer months. A heated and cooled workshop is perfect for projects, and the epoxy garage floors makes cleanup a breeze.

Living Room 2719 Dean Parkway

The charming breakfast-nook is wonderful for informal meals, while the formal dining area complements the large, efficient kitchen. An enormous center island offers extra seating and plenty of counter space for cooking up a feast for friends and family. Stainless steel appliances, pull-out pantry, cherry wood cabinets, and coffee station are additional kitchen highlights. And don’t miss the gorgeous American Cherry hardwood floors throughout the main and upper levels!  The living room features floor to ceiling french doors overlooking the lagoon that pour in the natural light, a top of the line gas fireplace, and behind the large wall mirror is a hidden nook for your large flat screen TV. Finishing out the main level is a formal office with coffered wood ceiling and separate kitchen desk.

With 5 bedrooms, 4 bathrooms, 4299 square feet, this home is for sale at $1,315,000. You won’t find a new house with a better location for this price around Lake of the Isles!

For additional information, photos, and floorplans, please visit www.2719DeanParkway.com .

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State of the Luxury Home Market – Twin Cities

State of the Twin Cities Luxury Home Market

I thought it would be interesting to compare the current Spring real estate market for luxury homes in the Twin Cities to the last couple of years, and see if things have improved at all. The news is constantly stating that the Minnesota real estate market is roaring back to life, what with our shortage of inventory and less buyer fear, but can the same be said about the luxury market?

Days on the Market

Back in 2010, the rug was pulled out from under the luxury real estate market and it seemed to take forever for a home to sell. The average Days on the Market, what we real estate agents call DOM, was 212 – meaning that is took on average 212 days for a luxury home to sell.

Days on the Market 2010 Twin Cities Luxury Homes Days on the Market 2010

Now, look at March 2012 and the numbers get better. The average number of days drops to 170!

Day on Market Luxury Homes Twin Cities Spring 2012 Days on the Market 2012

For April 2013, the number drops to 148!

Luxury Home Days on the Market 2013 Twin Cities Days on the Market 2013

Inventory

Inventory is often one of the deciding factors on how a real estate market will perform. Too much inventory and few buyers makes for a terrible market. In 2010, sellers were scared and wanted to get out of their expensive homes. Buyers however were very worried and became hesitant if not completely shut off from buying a new home. No other inventory in the Twin Cities felt this more than the luxury home market, starting at about 685 homes for sale in Spring 2010 and roaring to 925 in the Fall.

Minneapolis St Paul Luxury Home Market Inventory 2010 Inventory 2010

Spring 2011 started off with 653 homes on the market and increased to around 836 by September, however when Spring 2012 hit, less homes were being offered for sale – coming in at around 620.

Twin Cities Luxury Home Inventory Spring 2012 Inventory 2012

Once Fall 2012 came around, only 708  homes were for sale. That’s a 15.3% decrease from 2011!  Of course now that Spring 2013 is here, I know the market inventory is low simply by trying to find homes my clients might like. We can’t find any! That’s because there are only currently about 430 luxury homes on the market. When compared to 2010, we quickly see that the Twin Cities Spring luxury inventory has decreased by 37%!

Twin Cities Luxury Real Estate Inventory Spring2013 Inventory 2013

Average Price

Starting in late 2009, the luxury home market started to be affected by the economy, and prices started a slow decline over the next year. By August 2010, average prices began a rapid decline making 2011 a terrible year to sell an upper bracket home in the Twin Cities. Homes that once held a value well over $1 Million, were now selling for $700-800K. Foreclosures and short sales became more prevalent, as home owners found themselves underwater and unable to afford their castles.

Twin Cities Luxury Home Average Price 2010 Average Price 2010

By Spring 2012, home values were at their lowest, only bringing in an average of around $675,000, but every cloud has a silver lining. Over the last year, the average price of a luxury home has been steadily increasing, and we are now back at 2009 pricing.

Twin Cities Luxury Homes Average Price 2013

What Does It All Mean?

Wow, what a difference a few years make! While the numbers look to tell a great story, it is still a cautious time. Home owners are not listing as many homes, thus giving buyers less choices. This helps prop up the market with homes selling quicker, but buyers are still afraid of paying too much for a home. Most of the buyers I encounter refuse to pay list price, and they also want to see the price of similar homes that have sold in the area in order to justify their offers.

The most interesting information in the report, in my opinion, is not the average price number, but the graph direction in general. Looking at 2010, the graph line is going down. But take a look at what has been happening since May 2012. The graph direction is going up, as if it is trying to claw its way out of the abyss. Let’s pray it keeps going up!

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Real Estate isn’t Just About a House

Wild VioletsIn the life of a real estate agent, most transactions happen without incident. A seller and buyer come together, discuss terms, and viol`a, a house is sold.  (OK, it isn’t exactly as easy as that.)  But every now and then there comes a time when less than pleasant incidents occur, and I am reminded that life continues on through it all.

It has taken a couple of months to write about this as it greatly troubled me at the time it happened. Those who know me, including clients, know my motto is: “All things happen for a reason”. It has always been my belief that we are guided along through our lives, and that each decision we make helps shape our future. Those decisions affect those around us, no matter how minute.

I had a wonderful home listed – old, with a wrap around porch. It was waiting for that one special person who would fall in love with it and bring it back to life. Eventually, we found that buyer. Unfortunately, at the same time they presented their offer, another one came in at the exact same price and terms. Enter negotiations.

As often happens with multiple offers, I had to respond to both buyers asking them to resubmit their highest and best offer. As fortune would have it, the buyer that wanted to restore the home came in with the best offer. I knew both parties were anxiously waiting my phone call, so after the seller informed me of his decision on the “winner”, I immediately called the buyer’s agent to give the good news. To say he was ecstatic is an understatement – I was told how much his clients loved this home and how they were going to restore it to its former glory, and it made me really happy to know I was going to a part of a transaction that was about more than just a house. Having restored old homes in the past, I knew what kind of people these buyers were – passionate and loving.

The seller was out of town until the next day so we had to wait for final signatures before the deal was officially “done”. I spent the evening with my family, happy that this home was going to be loved again. When the phone rang late that evening, I answered it, which is not something I usually do. The person on the other end was the buyer’s agent, and he was clearly upset. Thoughts quickly went through my head – his clients had decided to pull out,  they wanted to change the terms, etc., but what he preceded to tell me had me in utter shock.

Immediately after we spoke earlier that afternoon, he called his clients to give them the good news. The buyers were so excited. They were so excited that Mr. Buyer decided to immediately ride over to the home to sit on the wrap around porch and dream about “his house”. What happened next seems only to happen in movies. On the way to the home, riding his motorcycle, traffic stopped suddenly. He was able to stop in time, but the driver behind him, who was not paying attention, didn’t. Mr. Buyer was hit, and even though he was wearing a helmet, was killed from the crash. The buyer’s agent was calling me from the hospital, as he was a good friend of the buyers and their family. After he finished telling me that Mrs. Buyer would have to pull their offer due to the accident, I told him I understood completely and would inform the seller that night. After I hung up, still stunned, my tears started flowing.  I called the seller, and between sobs, told him what had happened. Needless to say, he was also in utter shock.

As I said before, I believe everything happens for a reason, even if it is bad. I don’t know what the grand plan of life is, or why this happened, but what it does reaffirm is how much each decision we make, no matter how minute, can affect the lives around us. While I know I should not feel guilty about his death, apart of me wonders if the buyer would still be alive had I waited five more minutes before calling his agent. Can life’s path really be changed so quickly? My husband and family tell me it was not my fault, that is was meant to be. I know they are right. But through my eyes, it’s hard to understand how one simple phone call, that brought so much joy one minute, later caused so much heartbreak. You could go crazy trying to wrap your head around it.

So often I hear people dismiss real estate agents as vultures, only caring about making a “quick” commission. They just don’t get it.  We are so much more, and it takes a special kind of person to juggle the many hats real estate agents wear. In this case, I became a grief counselor, not only for my client, but for myself. I felt connected to the buyers through their love, excitement, and passion about restoring an old home. A house was bringing us all together.

So see, real estate isn’t just about a house, it’s about people. And even though we don’t realize it, we are all connected.

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Three Meadows Luxury Home For Sale in Mendota Heights

Mendota Heights Luxury Home for Sale

614 Hidden Creek Trail, Mendota Heights, MN

 

It is hard to believe a home of this stature can be so close to Minneapolis and St. Paul, major Interstates, and the MSP International Airport, but feel like it resides outside the Metro area. The home owners combined two lots into one to create a 5+ acre nature retreat that is amazingly quiet, secluded, and pristine…not to mention frequented by deer, ducks, turkeys, many varieties of birds, and more! Christened as “Three Meadows” for the meadows stretching on and behind the property, a favorite part of the owner’s day is walking along a nature trail that winds through the trees and land for a “good mile”.

As soon as you step into this one of a kind home, you will instantly see the quality in craftsmanship. With over 13,000 heated square feet, no detail was overlooked in its design. Built over a period of 18 months, the home was crafted by Mihm Custom Homes and finished in 2005. The three level layout has 6 bedrooms, 7 baths, 2 half baths, a main floor laundry, and another small laundry in the lower level.

Luxury Home Theater 614 Hidden Creek Trail Mendota Heights
To view additional photos, documents, floorplans, please visit the property website at www.614HiddenCreekTrail.com

[idx-listing mlsnumber=”4337196″]

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Cressview Estates in Credit River Township

 Credit River Township Homes for Sale
One of my favorite luxury neighborhoods is located in Credit River Township, just south of the Twin Cities. I came across Cressview Estates years ago when two of the homes were on the Parade of Homes. Since then, even more luxurious homes have been built in the development, with every home having its own unique style. Home sites range from 2.5 – 13 acres, allowing you all the privacy you could desire. The Legends Golf Course is just down the road, as is the Cleary Lake Golf Course.

Cressview Estate Credit River Township homes for sale

[idx-listings linkid=”304358″ count=”5″ showlargerphotos=”true”]

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Upper Bracket Homes for Sale in Minneapolis

If you are searching for a lovely home in Minneapolis to purchase in 2013, I am pretty sure you will be able to find something that fits your budget. Prices of high end homes range greatly depending on location and style. Homes on Lowry Hill fetch more than those along Lake Harriet, and sometimes the style of a home is just as much a factor.

Take a look at the newest homes to hit the market in Minneapolis.

[idx-listings city=”Minneapolis” minprice=”700000″ statuses=”1″ propertytypes=”773″ orderby=”DateAdded” orderdir=”DESC” count=”10″ showlargerphotos=”true”]

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Pillsbury Mansion Back on the Market

In case you missed it, the Pillsbury Mansion “Southways” was quietly put back on the market in October 2011 for $24 Million, a far cry from its previous listing price a few years back of $54 Million. Located at 1400 Bracketts Point Road in Orono the home sits on some of the best real estate on Lake Minnetonka.

[idx-listings city=”Orono” minprice=”20000000″ propertytypes=”773″ orderby=”DateAdded” orderdir=”DESC” count=”5″ showlargerphotos=”true”]

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The Homestead Market Value Exclusion Explained

I have been getting a lot of questions from Minnesota home owners and future buyers about the homestead credit previously available on Minnesota properties. The Minnesota Association of Realtors has recently put forth a helpful explanation about the new Homestead Market Value Exclusion (HMVE) that was created in the 2011 legislative session.

The new HMVE is a recent change to how homestead property taxes are calculated. It replaces the Homestead Market Value Credit (HMVC). Under the old credit system, the credit lowered a homeowner’s property tax burden based on the value of their home. The state then reimbursed local governments for the lost amount of their levy (revenues) due to the credit. However, due to the state’s budget problems, it was rare that local governments were fully reimbursed by the state. Eliminating the credit and creating an exclusion removes the possibility of the state withholding funds and creates more stability for local governments.

The new program excludes a portion of the homeowner’s market value from the property tax calculation. The amount of value excluded is directly proportional to the credit the home received under the old law. The actual tax burden on homesteads could be lesser or greater depending upon the mix of properties in the taxing jurisdiction and the levy decisions made by local governments (for more information on the technical calculations, please see further below).

Technical Calculations

Description: Under the old credit system, the credit amount would rapidly increase as a home value approached $76,000 with the maximum credit amount of $304. After $76,000 the credit would decrease until it was completely phased out with a home value of over $414,000. The new exclusion mimics this same scale as homes approaching $76,000 would have a rapidly increasing exclusion of value, with a home valued at $76,000 receiving a maximum exclusion of 40% of their home value from property tax calculations. The percentage then decreases and is phased out at homes valued over $414,000.

Calculations

Old Law with Credit New Law with HMVE
Market Value (MV) determined by Assessor Market Value (MV) determined by Assessor
N/A Calculate exclusion (HMVE):MV < $76K: Exclusion = 0.4 x MV

MV $76K – $414K: Exclusion=$30,400 –
((MV – $76K) x.09)

MV > $414K: Exclusion = $0
N/A Taxable MV = MV – Exclusion
Homes < $500K: MV x .1% = Tax Capacity (TC)Homes > $500K: $5,000 + ((MV – $500K) x 1.25%) = TC Homes < $500K: Taxable MV x .1% = Tax Capacity (TC)Homes > $500K: $5,000 + ((Taxable MV – $500K) x 1.25%) = TC
Gross Tax = TC x total tax rate (county + city + special district rate) N/A
HMVC = MV < $76K: MV x .004MV $76K – $414K: $304 – ((MV – $76K) x .0009)

MV > $414K: $0

 N/A
Net Tax = Gross Tax – HMVC Net Tax = TC x total tax rate (county + city + special district rate)

(Referendum taxes are not covered here)

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Helpful Hints on Home Descriptions

Properly Marketing a Home For Sale

Beautiful Flower Beds

Most real estate agents are not good writers, so it should come as no surprise that when you read through real estate listings the descriptions are lack luster. Some agents just don’t care, some just don’t know how to write well, and some agents are so “old school” that they know no other way. Sadly, home owners are the ones hurt because poorly written descriptions fail to attract buyers, so it is extremely important to choose an agent that writes well and takes the time to create a story about your home.

I continualy write on this blog about the importance of good listing photos and how they are the first things buyers look at when searching for a luxury home in the Twin Cities. Photos are the window into the soul of the home, but to make them even better, you must have a description that tells a buyer what they are looking at.

What to Do

  • Accurately describe the home. Calling it the “Best” home in the neighborhood might not be a bad thing, but you better make sure you can back it up with photos and reasons on WHY it is the “Best” home.
  • Use good adjectives that attract buyers like “Beautiful, Lovingly Maintained, Great Landscaping, Spacious”.
  • Include longer descriptions of photos that highlight great features of your home.

    • 

What Not to Do

  • Don’t use negative adjectives to describe your home. Words like “As-Is, Motivated Seller, Small, Needs TLC, Good Value” might not sound all that negative, but they can be a “red flag” to buyers who might think the home is not worth seeing, or needs too much work.
  • Don’t put photos of your listing on the MLS without descriptions. Simple words like “living room” no longer cut it. Buyers want to know exactly what they are looking at and the best way to attract them to your home is to provide ample descriptions.
  • Don’t be lazy. Check up on your Realtor and make sure they are giving your home the marketing it deserves!

(Of course if you pick the right agent from the beginning, you probably won’t have to do much. A great agent will make your listing shine!)

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Comparing Market Value with Assessed Value in the Twin Cities

I think the answer to this post on comparing Market Value vs. Assessed Value can be summed up in four simple words, “Just Don’t Do It“. In the past few months I have seen an increased objection voiced by some buyers over home prices. When I ask them to justify their reasoning, I am quickly told something along the lines of “Well, the home is only assessed for X. Why should I pay more than that?”

To make it simple, Market Value in Minnesota is what a buyer is willing to pay for a home, where Assessed Value is a valued placed on a property by a governemnt tax assessor for the purposes of taxation. The two are not the same. Every state is different in how they calculate property assessments, and Minnesota uses a system that is different from any state I have lived in.

Take for instance Dakota County.The current 2011 tax statements that were sent out this year are not based on current home prices. Instead, they are taken from home sales that occured between Oct. 1, 2009 and Sept. 30, 2010, data that no home appraiser would be able to use under financial guidelines as the sales are too far into the past. So if I were to buy a home towards the end of 2011, the “values” used by the county assessor could be off by two years!

Now look at homes currently for sale on the open market. The most important job of a real estate agent is determining what the Fair Market Value of a property is by comparing it to other properties that have recently sold in the area. This “market snapshot” is a more accurate, not to mention more up-to-date, representation of a home’s value. If buyer’s are willing to pay “X” for a similar home down the street, then there is a good chance another buyer is willing to pay around the same amount for your home.

While homes that are priced in lower tax brackets tend to show assessed values and market values closer together, homes in the upper-bracket real estate market, especially waterfront properties and historic homes, tend to be further apart when comparing the two values. County tax assessors generally have poor to no knowledge of what the true value of an expensive home might be, as they rarely have direct access to the interior of homes. Take for instance a large historic home I sold in Minneapolis. It was a truly unique home with nothing remotely like it on that side of town. The historic elements inside the home were priceless and would be near impossible to duplicate, but according to the tax assessor, the home was assessed well below its true market value. When a buyer did come in with an offer, they had it priced at the assessed value. I literally laughed when I saw the exact number and had to do the buyer’s agent’s job for her by showing where proper comparable home’s would come from (she was an out of town agent). After some negotiating, the seller and buyer were able to come to an agreed to price, which was up considerably from the assessed value first proposed by the buyer.

So please, when you are shopping for a home, do not use the assessed value of a home as the basis for an offer. Instead, look at what other comparable homes in the area have sold for and go from there!

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