Monday, December 31, 2007

Happy New Year

Well, the time is almost here, and I am sitting at home blogging. New Year's doesn't hold the same water like it did before I had kids. But I figured I've had my share of the night life and enjoy sitting at home watching a movie...and trying to make it to midnight.

At least I have a great view of the large snow flakes coming down and I can't wait to take my two year old out to the local hockey rink to try out his first set of hockey skates. I am an optimist for the new year. I don't like to make predictions or make resolutions. Anything that happens, happens for a reason, so I just let life take it's course.

Here's to you all in the New Year!

Friday, December 28, 2007

Thursday, December 27, 2007

Blog Vancancy...Oops!

This week I have obviously been neglecting the blog. My house is a wreck, what with all the toys my kids received for Christmas and sitting down at the computer is currently not a luxury. The new air hockey table is quite in demand and I have to keep losing so my son can win and dance around. How was your Christmas?

Monday, December 24, 2007

The Feeding Frenzy

It was snowing this past weekend and I was able to walk right up to the bird feeder and catch some video of the birds eating their full before the next snow storm. The snow made the world so quiet that the birds never noticed I was there. Well, maybe they did, but they didn't seem to mind.

The few birds brave enough to let me video include, Black-capped Chickadees, Tufted Titmouse, Wren, and a Downy Woodpecker. On a branch in the background you can see a Blue Junco sitting patiently, waiting for the frenzy to slow down.

Sunday, December 23, 2007

Christmas Traditions

Christmas holds special traditions for everyone. Over the years, we seem to stumble onto things that make us smile and appreciate the season. We even marry into families and merge traditions. I think that is one of the most fun things to discover about us all, the little quirks we all have. Each of us is so similar, but yet so different.

One tradition I have married into is the yearly Christmas viewing of "It's A Wonderful Life". Yeah, it can be cheesy in a few places, but it has such a great message(s). Here are the two I like:

1. Touching someone's life - think about it. How many people have you met over the great course of your life? Have you ever stopped to think how something as simple as just saying hello could brighten some one's day so much that it would cause them to change? What would life be like without you in it? I tend to think it would be a much sadder place without you. I look back on my life and think about people from my past. Everyone I have ever met has in some way shaped who I am.:

-the teacher who told me I am terrible at writing would be surprised to see me writing a blog

-the father who told me I could be anything if I just put my mind to it kept me believing in myself

-the sales lady that was rude to me always makes me remember "Do unto others as you would have them do unto you"

Who has influenced you during your life? While we all appreciate the good, even the negative can mold the clay.

2. The Silver Lining: I guess I tend to look at life knowing there is always a silver lining, always a good side to everything bad that happens. One motto I like is "Don't Sweat the Small Stuff". I also feel that "everything happens for a reason". Often I tell buyer clients that lose out on a home they think they love, that it wasn't meant to be their home. Their home is still waiting for them, we just need to find it. Amazingly, each time this happens, my clients are surprised to find out how right I am.

Life is a journey. If we never have bad days, how will we know what is a good one? If we never fail, how will we ever succeed? There is always a silver just have to look for it in the oddest places sometimes.

The movie, though old, holds a great message. If you haven't seen it, then you might want to check it out. I for one am glad to take on a new tradition. After all, growing is part of life, and if you stop growing, then life becomes boring. Here's a new years resolution - stop being boring and do something new this year.

Friday, December 21, 2007

Clinging To the Trees in Minnesota

A few mornings ago I awoke to a very pretty sight. A light dusting of snow covered the trees and everything looked so peaceful. The pictures do not do beauty justice.

Thursday, December 20, 2007

Note to FTC - Get a New Business to Intimidate

So, after a few years of hearing complaints about the FTC lawsuits going on against all these Multiple Listing Services across the country, it appears that the Gestapo tactics of intimidation are starting to back fire on the FTC. Just this week, two MLS boards have been vindicated in the court of law for NOT having anti-competitive practices in place.

The most recent case comes from Michigan, Realcomp II, Ltd., a regional multiple listing service located in southeastern Michigan. The issue presented was whether the MLS treatment of "Exclusive Agency Listings" (EAL), those that allow a seller to not pay a commission to the listing broker should the seller bring the buyer, was anti-competitive and in violation of antitrust law.

"The FTC argued that: the MLS's policies discriminated against discount brokers utilizing EAL listings by limiting the distribution of their distribution and making it more difficult for other MLS participants to locate these listings. In particular, the FTC identified two policies which caused the alleged harm: the Website Policy and the Search Function Policy. None of the policies prohibited the submission of EAL to the MLS; rather, the policies addressed how the MLS would treat the listings after submission" read the full review visit here. (Login Required)

  • The Website Policy only submitted "Exclusive Right to Sale Listings" (ERS) to and IDX feeds.
  • The Search Policy only showed ERS listings but gave the MLS participants the option of checking a box to include all EAL listings in their search.

To claim a violation against Antitrust Laws, three standards must be used:

  • per se analysis, when the restraint is obviously anticompetitive
  • quick-look analysis, for restraints with some pro-competitive justifications
  • the rule of reason, for restraints where the effect on competition is harder to determine

The administrative law judge over the case determined that the "rule of reason" best described the way to judge the MLS rules. He then looked to see how these were anti-competitive and if they harmed consumers. Here is what the judge found:

  1. The Search Policy was not anti-competitive because it gave the option of checking a box to include ALL listings.
  2. The Website Policy was not anti-competitive because the FTC was not able to show any proof that the policy harmed the public or competition.
  3. The judge further found that the alleged broker victims (discount brokers) had actually increased their gains revenues and increased their business during the years the Website Policy was in affect, so the claim that the policy hurt their business was false.
  4. It is not against anti-trust laws to charge a broker an additional fee for submitting EAL listings.
  5. Most importantly, the judge found that the MLS had the right to protect itself from "free loaders". It's policy helped "prevent sellers, who do not pay a commission to a MLS participant, from receiving advertising provided by the MLS but without paying dues to the MLS like all other MLS participants must. The MLS's policy of excluding the EAL from public websites and IDX addressed this problem." It also protects buyers that are working with a broker from being forced by sellers to ditch their agent representation, in order to negotiate on the home.

NO BIG SURPRISE...the judge dismissed the FTC complaint.

So there you have it. The FTC is not winning some of its cases. For those MLS boards that have caved before going to trial and given in to the FTC, they should seriously rethink their decision. Just because the government comes a knocking and threatens to take you down for anti-competitiveness, doesn't mean you have to get scared and give in. It's time we all stood up and said enough. Thankfully the law, which the FTC is trying to use in it's cases, is proving to be more on the side of the MLS boards, then with it.

Regardless of what Internet users might think, NOT all information is free.

Wednesday, December 19, 2007

Minneapolis Historic Home on Lowry Hill

This weeks featured Historic Home of Minneapolis is located at 1300 Mount Curve Avenue.

Known as the Charles Martin house, the home was built in 1904 by William Channing Whitney and is mostly constructed of brick. When driving down Mount Curve, you could easily miss the home as it is tucked away behind a wrought-iron fence and large hedge. I had to angle the camera to get a good shot of the home.

The Twin Cities was founded on the backs of the flour mills. The original owner of the home was involved in the trade as the Secretary and Treasurer of the Washburn Crosby Company that later became General Mills. The home as sits on top of Lowry hill, looking down over Minneapolis. The view has changed greatly since its construction.

Built in the Italian Renaissance style, it has every thing needed to stand out as an fabulous form of architecture. The low pitched hip roof covered in tiles is one give away, but other classical details include the balustrade front porch, pediments over the windows, the brackets, dentils, and quoins, just to name a few. Also it seems that many columns on Renaissance homes are done in the Doric fashion.

View photos of the home as it appeared in 1910, and 1950.

Tuesday, December 18, 2007

Hot off the Presses...

Each week we get a market update from the Minneapolis Area Association of Realtors. This is a snippet of what is happening here in the The Twin Cities.

"...the Twin Cities housing market is well into its annual winter holiday pause. New listings have been minimal, yet total inventory of homes for sale remains at record levels and the number of sellers continues to far outweigh the number of buyers. Conservative lending standards and decreased consumer confidence seem to be keeping home buyers away despite low mortgage rates, motivated sellers, improved housing affordability and great housing stock.

Over the last three months, newly signed purchase agreements have declined by 20.0% from the same period in 2006 and 34.3% since 2005. Meanwhile, new listings have declined by only 1.8% The number of homes for sale has dropped 5,000 units in the last 12 weeks but remains 12.9 % higher than this time last year.The forecast calls for improved buyer activity, but it will likely take more than a year of gradual increases before comparisons to today's buying market are quantifiable."

Can it be described any better than that?

Monday, December 17, 2007

New National Real Estate Market Report

According to Inman News, Altos Research, are rolling out a new monthly report, The Real Time National Housing Market Report, for 20 US housing markets, including Minneapolis.

While the report doesn't cover all markets, it will be a "trend indicator" that can give you valuable insight into the residential market in general. Just know that the information for Minneapolis encompasses a wide area. Real estate can be broken down into local neighborhoods, in which you can get a better idea of home trends for that area. For instance, it is no surprise to local residents of Minneapolis that homes near Lake of the Isles fetch more than homes in Southwest Minneapolis.

A couple interesting statistics to point out:
  • Minneapolis ranks second with the largest percentage of homes currently listed that show a at least one price reduction. Over 50% of the homes on the market have been reduced.
  • While Miami experienced the longest time-on-market span with an average days-on-market of 137 in November, Minneapolis had the second highest average days-on-market at 125.
  • Maybe we should be thankful that our market isn't as bad as Detroit's. Detroit currently has the most inventory in the nation, approximately 70,000 homes for sale. Compared to them, Minneapolis comes in at a mere 22,000.

While inventory levels declined in most markets, Stephen Bedikian, partner and research director for Real IQ said, "We expect time-on-market will continue to lengthen and apply pressure on homeowner pricing decisions until buyers regain confidence and demand levels off. So far that point is not in sight." I would have to say that in the Twin Cities, I am starting to see some areas where the market is beginning to lever out. Prices have stopped declining to a point where buyers will buy the homes. Location is a key factor when buying across the Twin Cities.

Each month you can find the updated version of the report on their financial institutions page. You can download this month's report here (PDF 243k).

Thursday, December 13, 2007

Sellers Still Don't Get It!

I love old things, especially old movies. One of my favorites is "Cool Hand Luke" starring Paul Newman. Ok, 1967 might not be old to some of you out there, so please take no offense. What some don't know is that a very famous quote comes from the movie and is kind of a cult classic:

"What we got here is a failure to communicate."

I think in this every changing real estate market, this is a good quote to describe what is going on between real estate agents and sellers. In reality, it is better described as failure to listen to the market.

If you want your home sold, then please listen to the agent that tells you the truth about the market. I know it is really hard to do. Emotions get in the way. You really want to sell your home for the most price, but what you have to realize is that buyers don't want to buy for the most price if they can get the same thing around the corner for less.

When I have a listing presentation with a seller, I tell them the truth, and I back it up with data. The last thing I do is sugar coat a price range just to get the listing and I also don't take overpriced listings. The market is fierce right now (meaning there are too many overpriced listings), and if a home owner wants to waste time to "feel out" the market, then be my guest with someone else. My job is to sell your home, not call you up in three months and ask for a price reduction, that should have been the original price to begin with.

I have tried reaching a few sellers, but they checked out once I mentioned price. Denial is the worse enemy for a home seller.

Here are somethings to look for when you interview agents:

  • If they tell you to list your home higher than comparables are supporting, really question why. Are they just trying to please you and "tell you what you want to hear"? There are a lot of desperate agents out there that NEED the listing.

  • Do they have a web presence? With the buyer's market going full strong, does an agent have a website that actually ranks on the first page of the search engines, or do they have a website that just sits there and doesn't have any content that will attract a buyer? Buyers want to see more than just an agents listings. Google an agent before you meet with them and see what comes up.

  • If an agent asks you to sign a price reduction form at list time, then that should be a red flag that your home is overpriced. Why would you agree to over list the home if you want to sell it? Buyers aren't dumb, they can pull recent solds from all over the place and figure out what you home is worth pretty fast.
  • Never select an agent based on price. Look at their marketing campaign and past experience to get an idea of how good they are. Oh, and just because an agent is young, does not mean they are inexperienced. I have met many 20-30 somethings that produce more than well known agents that have been in the business for 20+years.

So there you have it, a snapshot on things to do when you decide to put your home up for sale. The time has come to realize that Minneapolis, and Minnesota for that matter, is no longer a sellers paradise. If you want to sell and not become a "days on the market" statistic, then listen to an agent that will tell you the truth about what it will take to sell your home. Forget how much your home has appreciated the last five years (that money was never yours to begin with) and be prepared to let go.

Wednesday, December 12, 2007

Most Agents Are Not Idiots

I was reading around the blog-o-sphere today and came across a couple of comments from public users on Zillow. Not only were they nasty, but they were misinformed on a couple of issues.

The one I thought was interesting was the belief that almost all Realtors have nothing higher than a high school education. In fact one silly soul said that 90% of agents are only high school grads. Hmmm, I would really like to know where he got those statistics. Here are the facts from the US Census bureau:

  • 50% of Realtors hold a Bachelor's Degree or higher. At the same time, only 30% of adults in the US hold the same.

  • 11% of Realtors hold a Master's Degree or PhD or Law degree, where only 9% of Americans do as a whole.

I fall into the first category, with a Bachelor of Science degree in Chemistry. Why did I go into real estate you might ask? Well, I was part of the corporate world before this, and after working 60-70 hour work weeks, including weekends, not seeing my husband, being tired all the time, putting up with the corporate bull that goes with the job, looking forward to 10 years of "putting my time in" before I saw a raise or big promotion, I decided it was time to do something I like and would have fun at.

Real estate allows me to make my own schedule and my own rules. Besides, someone should have told me freshman year how little Chemists make, and that the only way to get ahead in the profession would be to get a PhD and work for a University doing research. Sorry, but too boring for me. So next time you run into a real estate agent, don't assume they are idiots. Most likely they have a degree and are fairly smart people. Like the saying goes, don't judge a book by the cover.

Tuesday, December 11, 2007

Confessions of New Construction, Part 5

Digging the Foundation

When they finally dig the hole for your house, you wonder how they get it right. They stake the lot and take measurements, scoop out a lot of dirt, and then fill it full of concrete. It doesn't look like much but the foundation finally gives the sense of a home being built.

The above photo is of the builder pouring the concrete walls, or forms for the walkout basement. A large percentage of homes in Minnesota have basements. Basements come in three versions, the simplest being a basement with no windows. The other two are:

  • Lookout: windows in the basement let you look out to the yard, but there is no access to the yard
  • Walkout: enough of the backyard is dug out to allow for a home owner to walk out of the basement into the yard. Homes with a walkout basement always have to be dug on a hill and cost you more in the purchase price.

Minnesotans love their basement space. Some are converted into Man Caves, others are the kids area, and some become theaters, bars, game rooms, or wine cellars. The options are endless. The home we are building will have a guest room and bath, family room, and office. We are keeping it less formal so our kids can play down there and I don't have to worry about any accidents.

An very important thing to realize when buying or selling a home is that basement square footage is not given the same value as above ground square footage. Some people have told me the below ground square footage only brings 20-40% of the above ground square feet, but appraisers I have met neither confirm or deny the numbers. I have read that some give values between 50-75%. If you know the answer, I would love to know, but as with most things in appraising real estate, it all depends on the opinion of the one doing the appraisal. The best rule of thumb is to look at other homes that have sold with similar basements and judge from there. Any doubts, hire an appraiser. They cost anywhere from $300-500 here in the Twin Cities.

Saturday, December 8, 2007

Follow the White Fluffy Road

When lakes freeze over here in Minnesota and there is a nice fresh layer of snow, it is pretty common to find a foot path or cross country skier path along the edge of the lake. A great way to get some exercise and take in the beauty of winter.

Friday, December 7, 2007

The Tax Man Goeth...

A current problem here in Minneapolis and the surrounding areas is the depreciation of home values. The Minneapolis Association of Realtors is estimating that home appreciation values for 2007 will actually be negative. We will find out for sure when the report comes out in February.

This post isn't about home values, though, it is about taxes. Real estate values went through the roof, especially in 2004-2005, and the tax boards took notice. Since values were going up, they felt it was their right to increase property taxes right along with them. With more tax revenue feeding the coffers, came more spending, and each year local community governments kept spending more and more.

This habit is quite common with the government, and can be seen best in action with the military. When my husband was a pilot in the Navy, he had to do other "jobs" when on cruise. Some of these were money related concerning the squadron. Many times he was told to find something to spend the rest of the budget on to "get rid of the money". See, if a squadron didn't spend all of its allotted funds for the year, then they would not get that amount the next year from the government. Of course this attitude is against everything we stand for because frivolous spending is just a waste.

Local communities have been acting the same way the past five years. They have been constructing new buildings, putting money into local projects, lining our schools with gold, etc. Now that property values are going backwards, property owners are finding themselves in a pinch. Their home values are less than their taxed value, and it is starting to really upset the cart.

This last month, numerous school districts put a vote to local owners to approve new property tax levies to help pay for funding of school projects. Unfortunately, they used the kids to get the parents to pay, stating "our children will suffer if you do not approve an increase in property taxes". That one really got under my skin. Don't try to say my kids will get a worse education if you don't get more money. It won't work on me. Minnesota continually ranks high for best schools in the nation, so an additional five kids per classroom isn't going to hurt anyone.

Lakeville was one district that said no to the property tax levy. The district responded by pouting and claiming the children were going to get a terrible education and teachers were going to get fired, etc. Yes, cuts will have to be made, but the most important thing for governing boards to realize is that people are tired of opening up their wallets. It's time for budgets to be more realistic and depreciate, just like home values. The good times are over and it's time to live with-in our means.

The tax man came at us heavily for the last five years. Now it is time for him to reassess property values to current market value trends. Florida is passing a bill that will roll back taxes to a few years ago, before the big boom hit. It's time for Minnesota to consider something similar. The people demand it...and want the tax man to goeth away.

Thursday, December 6, 2007

Selling a Home in Winter

Today it is snowing again, and they are saying we might get somewhere around 6 inches. I did all my errands this morning, before it got really bad and now it looks like we can't get out until the snow plow comes. Winter in the Twin Cities causes real estate activity to slow down. Compared to July, it really slows down. But it doesn't have to be your worse enemy.

If you look at the graph below for the past three winters, 2005-2007, you can see that there is a huge dip around December.

  • red represents New Listings
  • blue represents Pending Sales
  • yellow represents Closed Sales

With so many holidays clustered around each other, people have other things on their mind besides buying a home. Buyers don't have the money to buy because they are shopping for Christmas, and sellers aren't listing their homes because they know market activity slows way down at this time.

However, it might be good to remember that as a buyer, your best deal could be made in the winter months. Homes that have been on the market for a while are itching to sell before the flood gate of new listings opens up in April. For instance, if we ever need a new vehicle, we always buy in December. Car dealerships see their lowest sales during this month so we know we have more negotiating power. It is the same with real estate.

Along the same guidelines, the number of active homes is less, and means that the competition is less. Sellers have a better chance of selling in this atmosphere because their neighbor is waiting for Spring to sell.

So in a way, selling/buying in the winter months is a win-win for both sides of the real estate transaction. It all just depends on how you want to view it. I often tell clients to wait until after New Years to list a home. The first couple weeks the listing hits the market are crucial, but if the listing comes on the market when no one is looking, then you have just wasted the "good news", so to speak.

If you have any questions about selling during the winter months here in the Twin Cities, don't hesitate to ask!

Wednesday, December 5, 2007

More Hockey

I came across this Minnesota hockey video on YouTube and thought it gives good insight on why we are so crazy about hockey. Young boys are groomed and bred into hockey from the womb. My one year old can't walk yet, but he sure can bat a toy hockey puck around with a baby stick.

We also recycle our lakes each winter. While some would think lakes are useless once they ice over, we Minnesotans get 100% reuse out of them once it starts to freeze. Stick around for the end of the video to see what I am talking about.

Tuesday, December 4, 2007

Help Saint Paul Win!

St Paul has the chance to win the opportunity for HGTV to come to town and help three local improvement projects take flight through their new television program Change the World. Start at Home. Nine cities across the country are competing for life-transforming assistance - and viewers will decide through voting. Votes can be cast through December 21 at their website.

Click here to VOTE SAINT PAUL

According to the Historic Saint Paul website :

The Saint Paul projects feature a mix of historic preservation, community, education, and environmental improvement, including:

  • Helping a deserving family with an unfinished home renovation. After her husband passed away 18 months ago, Kris Nelson’s dreams of restoring their three-story Victorian era home were put on hold. She and her two sons hope to be able to complete their home with a help from HGTV, Rebuilding Together and the National Trust for Historic Preservation;
  • Transforming the grounds of the Wilder Recreation Center/City Academy. The WPA building was designed by Saint Paul City Architect Clarence (“Cap”) Wigington, the country’s first African American municipal architect. School administrators at City Academy building teach their students the importance of giving back to the community through volunteering and caring for the environment. Without a much-needed facelift, the growth of the school and neighboring community center is stunted by space and environmental limitations;
  • Restoring and interpreting the ecological and cultural resources in the Bruce Vento Nature Sanctuary, a Mississippi River area open space just east of downtown Saint Paul that includes remnants of our industrial and indigenous history. Though the park has come a long way since its days as a contaminated rail yard, there is still much to be done and it remains a work in progress.

So make sure to cast your vote for local historic preservation by visiting HGTV and casting your vote. You can vote once a day!

Saturday, December 1, 2007

Minnesota Life in the Winter

I went out early this morning to get some Christmas shopping in before the crowds arrived. Unfortunately, they never showed up because it started to snow as I was finishing up. I made it home in time before the roads got really bad. By the time I took this video, the wind was blowing so hard that snow drifts were forming. Please note, I risked a lot obtaining this video, mainly freezing my tail off while snow flakes hit me in the face. For those of you in warmer climates, your simpathy is much appreciated.