“The Eleventh Hour Upgrade” Star Tribune
June Fletcher published an excellent piece in Saturday’s real estate section of the Star Tribune. Entitled, “The Eleventh Hour Upgrade,” she explores the last minute remodeling and upgrading that many sellers go through prior to listing their home.
Overall home remodeling is down, but apparently many remodelers say they are picking up quite a bit of business from sellers who want to improve their home before it hits the market.
No matter what the upgrade, homeowners aren’t likely to recoup all the money spent when they sell. According to Remodeling magazine’s annual Cost Versus Value Survey, the overall return for remodeling projects is on the decline, falling to an average of 70 percent in 2007 from 86.7 percent at the market peak in 2005.
(Note, see this previous post on the latest 2007 Cost vs. Value Survey).
Despite the fact that the returns aren’t as high for remodeling projects these days, it is not unrealistic to think that many sellers today will have to spend significant sums to make some last minute improvements to their home prior to getting it listed. A rule of thumb I use is shown below in this crude table:
Home Value Home Improvement Costs
$250,000 - $350,000: $2,000 - $3,000
$350,000 - $600,000: $3,000 - $8,000
$600,000 - $1,000,000: $5,000 - $15,000
The trend for the bulk of today’s buyers is that they do not want to do much when they buy your home. Generally speaking they aren’t interested in “building equity” like we used to talk about several years ago. Today buyers want to “build equity” by buying a perfect or near perfect home at 5-20% under market value…that’s how they will build their equity.
Twin Cities Real Estate - Market Activity Report for Week of February 25, 2008
Here’s the latest weekly report from the Minneapolis Area Association of Realtors.
Listings: +12.1% over the same period as last year (see page 4 of report)
Pending Sales: -17.8% over the same period as last year (see page 3 of report).
It appears we are still about in the same place we have been in the past several weeks. There is no “turn” here in the data, but it also doesn’t show that the market is getting worse.
2700 Copper View Drive, Orono, MN - $990,000 The Perfect Family Retreat!
Welcome to this exceptional custom 5 bedroom, 5 bath home in beautiful Orono, Minnesota. Enjoy the luxury resort-like feel this home offers with a new saltwater pool, sport court, and extensive landscaping. This home offers outdoor living at its finest!
Located on a beautiful 2 acre lot in a cul-de-sac, this home allows the lifestyle of living in the gorgeous country setting of Orono but with a neighborhood feel. Custom built in 2000 by Pillar Homes, you’ll notice the superior craftsmanship and attention to detail in this nearly 4400 finished square foot home. It has a wonderful, well thought out open floor plan.
The main level provides many conveniences for daily family life but it is also a wonderful place for entertaining friends and family. The gorgeous gourmet kitchen with a center island, granite countertops, tile backsplash and stainless steel Kitchen-Aid appliances along with the adjacent informal dining make this a great family gathering place. The family room is highlighted by a beautiful built-in entertainment center, stone accented fireplace and a wall of windows.
For daily family life, it is hard to beat the large main floor laundry room as well as the mud room and cubbies. These rooms are conveniently located near the entrance to the garage. Nearby you’ll also find the incredible main floor office. It is extra large, has a wall of custom built-ins as well as desk space, and overlooks the lovely side yard.
During the spring, summer, and fall months, you can’t help but enjoy time relaxing on the picture perfect screened porch. The view is absolutely stunning. Overlook the new saltwater pool, gorgeous architecturally designed landscaping and the elegant paver patio with granite steps.
Upstairs are 4 bedrooms and 3 baths including a tranquil master suite which overlooks the magnificent backyard and pool. The master bath boasts heated tile floors, a large walk-in shower and separate whirlpool tub. There is also an open space upstairs that works well as a computer room or a place for kids to do homework.
The lower level provides a fifth bedroom and bath as well as a large recreation room with a ceiling height of nearly 9’. Lots of storage is available in the lower level as well.This exceptional home offers luxury with a resort-like feel allowing today’s family a retreat from the hectic pace of life. With 5 bedrooms, 5 baths, 4386 finished square feet, a new saltwater pool and sport court on a lovely 2 acre lot in Orono, this home has it all!
Below are some additional photos of this home. You won’t want to miss the VIDEO TOUR of this beautiful home at 2700 Copper View Drive, Orono, MN. Click here for the listing information.
Please contact me if you would like to see this property.
Relocation Giant - SIRVA - Parent of Allied Van Lines - Files Bankruptcy
Sign of the times….SIRVA is a global relocation company helping over 300,000 people move each year, has filed Chapter 11 bankruptcy protection. There are approximately 100,000 creditors according to the MSNBC story. SIRVA is the parent company of Allied Van Lines. With transaction volume down anywhere from 35-50% from the peak of the market a couple of years ago, it’s not difficult to imagine the challenge these companies face with their large overhead.
I have been involved in many interesting conversations about companies like SIRVA. We call them 3rd Party companies that get involved in helping executives relocate. They way they generate their money is by charging the real estate brokers anywhere from 25-45% of the commission fee.
In other words, they go in to get this business from large corporations and it’s ultimately the real estate agents who pay for this service. Agents who take these relocation listings generally don’t make much money if they can sell the listing. We take them for the market exposure it gives and the hope that the seller will give a referral or that we might pick up a buyer off of the listing.
These relocation companies remind me of the medical insurance industry. Often times they just drive up the overall cost of the transactions. The big corporations, SIRVA and other 3rd Party companies all benefit at the expense of the individual agent.
It would be nice to see this bankruptcy bring about reform in the relocation business, but I am not optimistic this will happen. It will likely be business as usual.
Medina, MN Real Estate Sales 2007 vs. 2006
I am to be chided for not publishing this information sooner. The Minneapolis Area Association of Realtors published this information 2-3 weeks ago.
Click here for the pdf comparing 2007 to 2006.
The average sales price for a home in Medina remained essentially unchanged for 2007 to $787,117.
Days on Market stood at 153 days until a home received a contract.
Twin Cities Real Estate - Market Activity Report for Week of February 4, 2008
Here is the latest weekly report and commentary from the Minneapolis Area Association of Realtors. Pending sales are still down nearly 20% compared to the same period as last year.
The trend in transaction activity continues its consistent drop of about 20%. That seems to be the number week after week. As I’ve said before, until we start to see the pending activity turn up and start getting in to the negative single digits, this market is not going to feel any better.
MAAR had this to say:
With cold weather, high winds and relatively low consumer confidence, the Twin Cities housing market continues to experience low levels of buyer activity in January. Newly signed purchase agreements (pending sales) posted 485 units sold for the week ending January 19, a decline of 19.4 percent from this time last year. For the same time period comparison, new listings held relatively steady, posting 1,877 new units on the market. Roughly half of these are re-lists that have already been placed on the market at least once in the last 12 months.
Here’s the full report for the week.
Mortgage Rates: 5.5% for 30 Year Conforming Loans
This fluctuates every day, but rates have bumped back up about a half percent from where they were about two weeks ago. It’s a great time to refinance if you’re thinking about doing so.
Here’s today’s rates as published by Edina Realty Mortgage.
Medina, MN Republican Caucus - Romney the Winner
There was a huge, overflowing crowd at the Medina City offices tonight for the Republican party caucus.
The vote went heavily to Mitt Romney. The vote count was;
Romney: 66
McCain: 44
Paul: 12
Huckabee: 10
It was very encouraging to see many neighbors take time out of their business lives to show up for a couple of hours for the benefit of all in this Constitution Republic.
While many seem to believe America is a bad place today and that we do more evil in the world that good, put me down as one who believes America, despite its flaws, is still the greatest country in the world. Nights like tonight make me proud to be an American.