Just Listed brings you the latest news and information from the Twin Cities-area commercial and residential real estate market and beyond from veteran reporters Jim Buchta and Janet Moore.

New student housing cooperative near U of M aims to offer more affordable rentals

Posted by: Jim Buchta under Architecture Updated: August 25, 2014 - 1:17 PM

A new student housing cooperative near the U of M aims to offer a less expensive alternative to the hundreds of luxury rentals being built in the area, and to give residents more control of their community.  Riverton Community Housing starts construction Tuesday on its Fourth Street Student Housing Co-op, a six-story, 66 unit building at the corner of 13th Ave. SE and 4th St. SE in Minneapolis. The building, designed by UrbanWorks Architecture, will have first-floor commercial space, below-grade parking and a fitness center. There will also be a bike room with direct access to the street, bike storage and a bike repair station. The lobby will have a gathering space and an electronic message center to keep students connected.

Rents haven't been set yet, but a leasing manager for Riverton tells us that rents will be 10 to 15 percent less than the competition, and that there are no income restrictions.

Julie Snow, known for her sleek, modern designs, gets the AIA Gold Medal

Posted by: Jim Buchta under Architecture Updated: August 22, 2014 - 3:36 PM

Julie Snow won the AIA Minnesota's Gold Medal, the highest award given to an individual member in recognition for her "lifetime of distinguished achievement and significant contributions to architecture."

Snow is the founding partner of Snow Kreilich Architects, which is based in the Art Deco Rand Tower in downtown Minneapolis. She's known for her distinct architectural designs for everything from Light Rail Transit stations in Minneapolis to the Port of Entry Station in Warroad, Mn. Her residential projects include glassy rural retreats, break-the-mold condominiums and apartment buildings and progressive energy-efficient houses.

 AIA Minnesota President Tom Hysell, AIA, and a member of the nominating jury, had this to say about her work:  “Her body of work has consistently exemplified the excellence in Minnesota design. Her graceful modernism—from elegant cantilevered spaces in oceanfront houses to the elegant rooflines of U.S. border stations—achieves simplicity that only comes from the highest rigor in design and attention to detail.”

Snow is a graduate from the University of Colorado with a Bachelor of Architecture degree. She lived and worked abroad for several years and has worked for several firms, including HGA, and taught at the College of Architecture at the University of Minnesota.

House flipping fading fast, but highly profitable in Minnesota

Posted by: Jim Buchta under Buying, Foreclosures Updated: August 22, 2014 - 10:23 AM

House flipping is fading fast. Across the country only 31,000 single family homes were flipped — purchased and resold within 12 months — during the second quarter, accounting for just 4.6 percent of all U.S. home sales, according to RealtyTrac. That's down from 5.9 percent in the first quarter and 6.2 percent during the same period last.

In Minnesota, 3.2 percent of all closings were flips, down from 4.3 percent during the previous quarter and 10.9 percent last. Those flips garnered an average $83,000 gross profit, an above average 51.9 percent return.

Nationwide, investors averaged a gross profit of more than $46,000 per flip, a 21 percent gross return on investment. That's down from 24 percent during the previous quarter and 31 percent last year - the peak in percentage return on flips since RealtyTrac began collecting their data.

“Home flipping is settling back into a more historically normal pattern after a flurry of flipping during the recent run-up in home prices in 2012 and 2013,” said Daren Blomquist, vice president at RealtyTrac. “Flippers no longer have the luxury of 20 to 30 percent annual price gains to pad their profits. As the market softens, successful flippers will need to focus on finding properties that they can buy at a discount and efficiently add value to.”

Flip tid-bits:

  • Flips took an average of 187 days to complete.
  • High-end homes represented an increasing share of homes flipped in the second quarter. Homes with a flipped sale price of $750,000 or higher represented 4.10 percent of all homes flipped during the quarter, up 21 percent from a year ago, while homes with a flipped price of $400,000 to $750,000 represented 12.66 percent of all flips, up 10 percent from a year ago.
  • Flips on homes priced below $400,000 declined as a share of all flips from a year ago.
  • The best returns on homes flipped in the second quarter were on homes with a flipped sale price between $750,000 and $1 million, yielding a 41 percent average gross return on investment.
  • Homes in the $50,000 to $100,000 range had the second best return at 37 percent, followed by homes above $1 million at 35 percent.
  • Flips happened most often in Phoenix (1,438 flips), Los Angeles (1,371 flips) and Miami (1,290 flips). Miami was the only one of the three metro areas to see its home flipping share increase from a year ago.
  • Markets with the best return on flips: Pittsburgh (106 percent), New Orleans (76 percent), Baltimore (73 percent), Virginia Beach, Va. (66 percent) and Daytona Beach, Fla. (63 percent).

North Nicollet Mall-area properties sold for $100M

Posted by: Janet Moore Updated: August 21, 2014 - 11:31 AM

A huge chunk of real estate near the northern stretch of Nicollet Mall has been sold to a San Francisco firm for $100 million, according to a source with knowledge of the deal who prefers to remain anonymous.

The properties, loosely known as Washington Square, include 20 Washington Square, 100 Washington Square, 111 Washington Av. S. and a parking ramp at 25 First St. N. They span about 1 million square feet of office space.

The distinctive mid-century 20 Washington Square building is currently leased to Voya Financial, formerly ING.

The buyer is Shorenstein Properties, a San Francisco-based real estate investment trust. In late 2012, Shorenstein bought the City Center complex, which includes the former International Multifoods Tower, a 50-story building occupies a city block bordered by Nicollet Mall, Hennepin Avenue and 6th and 7th Streets. That deal's pricetag was about $206 million.


 

Mortgage rates hit new low for the year

Posted by: Jim Buchta under Buying Updated: August 21, 2014 - 11:09 AM

Mortgage rates across the country dipped to the lowest level this year. Freddie Mac said today that the average 30-year fixed-rate mortgage averaged 4.10 percent for the week with an average 0.5 point compared with 4.58 percent last year, according to its weekly Primary Mortgage Market Survey. The previous 2014 low was 4.12 percent. Other rates this week:

  • The 15-year FRM averaged 3.23 percent with an average 0.6 point, down from 3.24 percent last week and 3.60 percent last year.
  • The 5-year adjustable-rate mortgage (ARM) averaged 2.95 percent this week with an average 0.5 point, down from last week when it averaged 2.97 percent and 3.21 percent a year ago.
  •  The 1-year ARM averaged 2.38 percent this week with an average 0.5 point, up from last week when it averaged 2.36 percent and 2.67 percent a year ago.

Low mortgage rates have certainly helped boost home sales. The National Association of Realtors said today that existing-home sales last month increased 2.4 percent to a seasonally adjusted annual rate of 5.15 million in July from a slight downwardly-revised 5.03 million in June. Sales are at the highest pace of 2014 and have risen four consecutive months, but are still 4.3 percent below the 5.38 million-unit level from last July, which was the peak of 2013.

Here's what Lawrence Yun, NAR's chief economist, had to say about the situation: “The number of houses for sale is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market...more people are buying homes compared to earlier in the year and this trend should continue with interest rates remaining low and apartment rents on the rise.”

In the Twin Cities metro, home sales have been down compared with last year. Closings during July were down nearly 10 percent (not seasonally adjusted), according to the Minneapolis Area Association of Realtors. Pending sales - an indication of future closings - for the week ended August 9 were down 1.3 percent compared with last year.

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