Several weeks ago we had a little item in this space about a national study from Zillow.com that said house prices near a Starbucks increase faster than houses near a Dunkin' Donuts shop. Now we have the local data, which shows that in the Twin Cities metro, homes within a quarter mile of a Starbucks appreciated 14.3 percentage points more than all homes in the metro between 1997 and 2013.
That data originally appeared in an excerpt from "Zillow Talk: The New Rules of Real Estate," Zillow CEO Spencer Rascoff and chief economist, Stan Humphries, who attribute some of that increase to a tendency for Starbucks to locate their stores in relatively upscale neighborhoods. "Whatever the reasons—because they genuinely like drinking coffee, or because they see Starbucks as a proxy for gentrification—it seems pretty clear that people are paying a premium for homes near Starbucks," the authors said. "And furthermore, it looks like Starbucks itself is driving the increase in home values."
Here's the low-down for the Twin Cities metro:
Doran Cos. sold four mixed-use apartment buildings near the University of Minnesota campus for $83.5 million, according to certificates of real estate value.
The sale was reported earlier this month, but the pricetag wasn't made public until this week.
It signals the end of the company's five-year building spree near the U's main campus as the developer reinvests the money elsewhere.
Two of the apartment and retail buildings, Sydney Hall and Dinkydome, were bundled together in the same transaction, fetching the largest sale price of $43.65 million.
The other two properties, 412 Lofts, on 12th Avenue SE., and the Edge on Oak, on SE. Oak Street, sold for $26.3 million and $13.55 million, respectively.
Bloomington-based Doran continues to own and manage its two newest student apartment buildings, the Knoll and the Bridges, both on University Avenue SE.
The institutional investor is unknown, but a money manager out of Denver is handling the transactions.
Read more about the sale on the Star Tribune website.
The 2015 housing market in the Twin Cities is off to a relatively strong start. Though there were fewer closings in January than last year, pending sales - a indication of future closings - increased nearly 8 percent, suggesting that more moderate temps and near-record low mortgage rates, are rousting buyers from their midwinter slumber. Here's what happened during January, according to a monthly report from the Minneapolis Area Association of Realtors (we'll have a complete story at www.startribune.com):
When it comes to buying a house, cash is still king, but in the Twin Cities and beyond cash sales are becoming less common. Nationwide cash deals made up 36.1 percent of total home sales during November, down from 38.8 percent the year before, according to CoreLogic.
With fewer investors in the market, the year-over-year share has fallen each month since January 2013, making November the 23rd consecutive month of declines. Cash deals peaked in January 2011 when they accounted for more than 46 percent of all home sales - that's ccompared with a pre-crash average of about 25 percent.
In Minnesota, cash deals represented about one in every five deals, down from a quarter of all sales last year. Michigan, which is still flush with investors (and where getting a mortgage can be difficult), had the largest share of cash deals - 54.4 percent.
Twin Cities-based Artspace develops affordable housing for artists, helping stabilize communities and planting the seeds for additional investment. City planners across the country have taken note, and have asked Artspace to bring their magic to their communities. Artspace is now working on several projects across the country, including New York City where the group recently completed the $52 million conversion of PS109, a once-abandoned public school building in East Harlem, into an arts facility with 89 units of affordable live/work housing for artists and their families. The project also includes 10,000 square feet of complementary space for arts organizations, and 3,000 square feet of resident gallery space. I wrote about the project two years ago (see the video and story by clicking here) just before construction began. This week that project landed front and center in New York Mayor, Bill De Blasio's state of the city address. Here's what he had to say about the project.
Here's another little something homebuyers should consider when considering the location, loction, location of their dream home. A pair of housing experts from Zillow.com said recently there's a correlation between your proximity to a Starbucks and your home value, and that your house is worth more if you're closer to Starbucks than to a Dunkin' Donuts shop.
In an excerpt from "Zillow Talk: The New Rules of Real Estate," Zillow CEO Spencer Rascoff and chief economist, Stan Humphries, say that a house that's within a quarter mile of a Starbucks would have sold, on average, for $137,000. A home that is not near a Starbucks would have sold, on average, for $102,000. Fast-forward 17 years to 2014. That average American home has now appreciated 65 percent, to $168,000. But the Starbucks-adjacent property has far outpaced that, appreciating 96 percent to $269,000 and slightly more than houses located near a Dunkin' Donuts shop.
What gives? Will buyers pay more for proximity to a double chocolaty chip crème Frappuccino blended crème, or is it simply a sign that residents can afford to blow $4.95 on their morning pick-me up? Rascoff and Humphries attribute some of the increase to the tendency of Starbucks to locate their stores in upscale neighborhoods.
"Whatever the reasons—because they genuinely like drinking coffee, or because they see Starbucks as a proxy for gentrification—it seems pretty clear that people are paying a premium for homes near Starbucks," the authous said. "And furthermore, it looks like Starbucks itself is driving the increase in home values."