Archive for January, 2014

Twin Cities Duplex Sales Still Cold

said on January 29th, 2014 categorized under: Twin Cities Real Est

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It's cold outsideIn spite of a new year and historically low temperatures, Minneapolis and St Paul duplex buyers and sellers acted as if it was late 2013 during the second full week of January.

There were 17 duplex sellers who accepted offers during the week.  At 52.9 percent, a slim majority will leave closing with a check in their hands. The average final list price on their properties was $154,912.

While this isn’t quite the same market share traditional sellers have had in recent months, it is, nonetheless, more than the 41.6 percent of  the 12 sellers during the same week in 2013 who had money in their hands after selling. On average, they sold at a price of $135,420.

New duplex, triplex and fourplex sellers continued to be in short supply as just 23 new properties came on the MLS; down 25.9 percent from last year’s new inventory. Of the 2014 crop, 73.9 percent are being offered by equity sellers. Last year, just 51.6 percent of the new listings were not in a distressed situation.

Single family home sellers continued to see the amount of new inventory drop: sliding 8.3 percent from last year. However, the number of pending home sales was also down 24.8 percent for the week. This drop may have been weather related. Total inventory is down 9.5 percent from last year.

With the unofficial start of the spring housing market ( Super Bowl) just days away and warmer weather in the forecast, these numbers should start to change.

Minneapolis Duplex Owners: CRPs Due

said on January 27th, 2014 categorized under: Legal Stuff

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crp deadlineA quick reminder that if you’re a Minnesota rental property owner; by January 31, 2014,  you must provide a Certificate of Rent Paid (CRP) to each person who rented from you in 2013.

Married couples may receive a joint CRP. Unmarried adults each receive their own copy (even if they are roommates).

If you bought or sold a property in 2013, you are still required to provide a CRP for the period of time you owned the building.

If a tenant moved, you must send the CRP to their forwarding address. If you do not have that information, you should send it to their last known address. You must keep a record of this for the tenant until August 15, 2015.

Failure to provide a CRP by the specified deadline can result in a $100 fine per infraction, so it pays to beat the deadline.

Minneapolis Duplex Short Sales Taxable: For Now

said on January 16th, 2014 categorized under: Short Sales/Foreclosure

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duplex foreclosure taxableAs the duplex foreclosure crisis wears on, one of the most important things we often forget is traditionally, the forgiveness of mortgage debt through a short sale or foreclosure is a taxable event.

The Mortgage Debt Relief Act of 2007 made forgiven mortgage debt tax-exempt. In order to qualify, the debt had to be on a principal residence, and the amount owed could not exceed $2 million.

On December 31, 2013, this tax exemption expired.

And to date, no extension has been passed.

On Tuesday, Congressmen Bill Foster (D-Illinois) introduced the Homeonwer’s Debt Relief Extension Act, which would extend the exemption for two more years.

To offset the extension, the bill calls for the repeal of a tax break for oil and gas companies.

Keep an eye on the bill, More importantly, if you’re facing losing your duplex or home to foreclosure, or the necessity of a short sale, be sure to consult your tax professional first so you’re fully informed of any tax consequences.

St Paul Duplex Sellers Act Befuddled

said on January 14th, 2014 categorized under: Twin Cities Real Est

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Confused minneapolis duplex seller scratching her headThe Minneapolis and St Paul single family home market looked a little down the week ending January 4.

After all, new listings dropped 18.7 percent from the same week last year. Pending sales declined 12.4 percent. And, overall inventory was 4.9 percent smaller than it was at the start of 2013.

But the Twin Cities duplex market?

Well, it just looked confused.

There were 22 duplex sellers who accepted offers to end one year and start another. Half of these folks will leave closing with a money in their hands. And, they will have sold their properties for an average final list price of $177,863.

During the same week last year, there were just 9 sellers who accepted offers. A majority of them (67 percent) went home from closing with a check in hand. Since traditional sellers always get more for their duplexes than banks do, it’s no surprise that these properties averaged a final sales price of $232,279.

Meanwhile, new listings for the start of 2014 were down 16.7 percent from last year, with 67 percent of the new year’s new sellers having equity in their property, compared with the 61 percent of last year’s new sellers who did.

As the year unfolds, I’m sure we’ll come to understand what it all means.

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super bowl 2014 sell minneapolis duplexIf you’re a Minneapolis or St Paul duplex owner who wants to sell, chances are you’re thinking you’ll do so in the spring.

And yet, judging by the countless owner I’ve spoken with, everybody has the same strategy.

In Minnesota, while most of us consider spring to be the months of April and may, in real estate the spring housing market generally begins the week after the Super Bowl. In other words, Monday, February 3.

For the last year, the Twin Cities duplex market has suffered from an acute lack of inventory. Prices have risen largely due to two factors: low interest rates and abundant competition for the few properties on the market.

If interest rates rise, or, everyone who wants to sell their duplex lists it when the tulips bloom, there may actually be downward pressure on prices. After all, one of the most basic laws of economics is supply and demand.

If you’re thinking of selling your duplex, the best possible strategy to maximize value is to beat the competition to the market. And that means listing in February or early March.

If you’re considering selling, give me a call or send an email (kari@duplexchick.com). I’d be happy to give you an opinion on value.

Is Your Minneapolis Duplex Radioactive?

said on January 9th, 2014 categorized under: Selling A Duplex

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radon elementYou many not know this, but all homes and duplexes in Minnesota can have dangerous levels of Radon in them.

Radon comes from the soil. It is the result of natural decay and, since it’s a gas, can easily move into the air.

Radon is radioactive. As a result, long-term exposure can cause lung cancer. In fact, it is the leading cause of lung cancer in non-smokers. Estimates suggest it is responsible for approximately 21,000 deaths from lung cancer every year.

As a result, as of January 1, 2014,  residential Minnesota real estate transactions are now required to include radon disclosures and education.

Prior to a sale, a seller must disclose in writing any knowledge he or she may have regarding radon in the building.

The disclosure must include:

  1. whether any radon tests have been done in the duplex
  2. the most current reports regarding radon concentrations in the property
  3. a description of any radon mitigation, remediation or concentrations
  4. information about any radon mitigation system if one has been installed in the building
  5. a radon warning statement

The age of your duplex has little to no impact on radon concentrations. It’s estimated that as many as 2 in 5 properties built before 2010 and 1 in 5 built since then have unacceptable levels of radon.

There are several kinds of radon tests available, which, in the event of a sale of the duplex, you should hire a Minnesota Department of Housing-listed professional for.

And if you have no interest in selling your home or duplex, there are over-the-counter tests available you can conduct yourself.

Radon is relatively inexpensive to mitigate compared to the emotional and financial costs of lung cancer. And it would probably be wise to know whether our homes or duplexes have put us or our tenants at risk.

Twin Cities Duplex Sales Survive Holiday Freeze

said on January 7th, 2014 categorized under: Twin Cities Real Est

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Dripping IciclesThe week between Christmas and New Year’s appears to be one of the most consistent for the Minneapolis and St Paul duplex market.

After all, in 2013, there were 9 new listings for the last week of December; up just one from the year before. Five of these (55.5 percent) were brought to the market by traditional sellers, and five of the eight sellers last year (62.5 percent) could say the same.

There were 9 duplex owners who received and accepted offers during the week. Curiously, of the 2013 group, just 44 percent of these were signed by sellers with equity in their properties. Of the seven successful sellers at the end of 2012, 71.4 percent walked away from closing with a check.

The single family home market did not perform with the same consitency. New listings were down 14.5 percent, Pending Sales were down 7.8 percent and overall Inventory decreased 9.1 percent.

When the deep freeze thaws and we’re  finally moving toward a normal spring housing market, we’ll have a better idea of what the market’s doing.