Archive for December, 2013

Twin Cities Duplex Sellers Love The Holidays

said on December 17th, 2013 categorized under: Twin Cities Real Est


businessman celebrating Christmas by web chat on a computerWhile many people are busy with holiday preparations, the Minneapolis and St Paul duplex market kept working.

In the week ending December 7, 16 duplex, triplex and fourplex owners accepted offers on their properties. More than half, at 56.3 percent, were traditional sellers, who will take a check home from closing.

On average, the final list price for these pended properties was $183,982.

During the same week in 2012, 27 duplex sellers accepted offers. It’s important to note that the vast majority of these sales (70.4 percent)  involved negotiations with a lender prior to the close of the sale. As a result, those investment properties sold for an average of just $131,827.

New inventory for the first week of December totaled 26 new listings. A whopping 76.9 percent of these duplexes, however, are being offered for sale by traditional sellers. Compare this just 56.7 percent of last year’s 30 new sellers who had equity in their properties.

The single family home market saw a slowing during the week. New listings were down 5.7 percent from the same week one year ago. Pending sales, meanwhile, increased .9 percent. In all, total inventory continues to be down 5.6 percent.

For the month of November, the market finished with a Median Sales Price of $195,000; which is 13.4 percent higher than November 2012. Inventory remains tight, with most sellers averaging 75 days on the market and receiving 95.4 percent of their list price.

There is just a 3.2 month supply of inventory on the market. A balanced market is occurs when there is a 5 to 6 month supply. In other words, Minneapolis duplex sellers are in charge this holiday season.

FHA Changes Twin Cities Duplex Loans

said on December 16th, 2013 categorized under: Buying A Duplex


minneapolis duplex loan limitsWhether it’s a sign of an improving economy, or less risk tolerance, FHA loan limits for duplexes will be reduced as of January 1, 2014.

For much of the housing market recovery, the government sponsored insurance program increased the size of duplex mortgages it insured.

FHA insured limits vary by area and county. Higher priced regions like southern California,  for example, had and have higher loan limits than more rural regions in the midwest.

Through much of the housing crisis, duplex borrowers in the Twin Cities could obtain FHA mortgages up to $467,250. Triplex borrowers could obtain FHA backed financing up to $564,800, and four unit building buyers could owner occupy properties with loans up to $701,900.

After the first of the year, however, those amounts will be reduced. Duplex loans will be limited to $407,800, triplex loans to $492,950 and fourplex loans will drop to $612,600.

Of course, it’s important to note that for many borrowers, FHA’s recent increase in mortgage insurance rates make it a less attractive financing option for many borrowers anyway. And, as always, FHA loans are available only to owner occupants.

Conforming loan limits appear more favorable. For duplexes in the seven county metro area they stand at $533,850, triplexes are at $645,300 and fourplexes at $801,950.

These loans may have higher down payment requirements than their FHA counterparts, but come with less expensive monthly mortgage insurance fees.

If you’re thinking of buying a duplex in the near future, feel free to contact me for a referral to a loan officer who understands multifamily financing.

Minneapolis Duplex Market Sleeps Off Turkey

said on December 11th, 2013 categorized under: Twin Cities Real Est


duplex market suffers turkey overdoseWhile Thanksgiving came “late” this year, the Minneapolis and St Paul duplex market apparently took a nap after eating too much turkey.

There were 13 small multifamily property owners who accepted offers during the week. Of these, 53.8 percent had equity in their properties. On average, the final MLS list price for these Twin Cities duplexes was $214,931.

While this traditional seller market share is down slightly from 57.1 percent at the end of last November, it isn’t down significantly. The number of sales for the week in 2012, however, was significantly larger at 21. However, the Thanksgiving holiday also landed earlier in the month in 2012. On average, these properties sold for $177,605.

New  listings suffered a post turkey slump as well, with just 14 new duplex listings coming on the market. The majority of these, at 64.3 percent, were listed by equity sellers. Last year there were 22 new sellers for the week, and exactly half did not have to consult a bank to sell.

The single family home market saw new listings fall 47 percent for the week and pending sales drop 38.5 percent. Inventory also dropped; down 4.5 percent from the same week in 2012.

Thanksgiving falls late once again in 2014, so look for a more equitable week-over-week comparison.


minneapolis duplex for saleMany investment property owners have the mistaken belief the holidays are a terrible time to sell a duplex.

Here are 10 reasons the holidays are actually a great time to sell:

  1. Properties tend to show better when they are decorated for the holidays. In fact, your tenants may have decorated and even picked up their units for family gatherings
  2. Winter buyers are more serious than their spring/summer counterparts. After all, if you didn’t absolutely have to be out in the snow and cold looking at property, would you be?
  3. Duplex, triplex and fourplex buyers get tremendous tax advantages buying at the end of the year.
  4. There is less inventory for buyers to chose from, therefore sellers have less competition.
  5. Less competition means higher prices.
  6. January is a big month for moving. With job transfers and school calendar breaks, many people focus on moving specifically in January, rather than over the course of a summer.
  7. When you sell your duplex over the winter, there will be more properties available to chose a replacement property from when the spring market begins.
  8. Your rental property is occupied. To investors, not having to find tenants over the winter may be a bonus.
  9. Showings can be restricted so as not to interfere with tenant’s family activities.
  10. Buyers can be more emotional over the holidays. While this may not be a factor if your property lends itself primarily to being 100 percent tenant occupied, it may be a significant one if your duplex is currently or is conducive to being owner occupied.

If you’ve been thinking about selling your duplex, but waiting until spring, thank carefully. Now might be the perfect time to beat the competition and net more for your property.