Study: Twin Cities homes overpriced

Minneapolis/St. Paul Business Journal - 11:46 AM CDT Friday
by Katharine Grayson
Staff Writer

Single-family homes in the Twin Cities are overpriced by about 22 percent, according to a new report.

The study, released by National City Corp., said housing values are continuing to decline throughout the country, and the drop is hitting the Midwest particularly hard.

In judging whether homes are overvalued, the study considered housing prices, household income, population density, interest rates and historical premiums and discounts.

In the Twin Cities, prices are rising, but at a much slower rate than in previous years. In August, the median sale price of homes in the Twin Cities rose a slight 0.04 percent to $235,000.

But even as the housing market slumps, homes in the Twin Cities were still valued at about 22.4 percent more than they should have been in the second quarter, according to the study.

The study placed the median sale price of a single-family detached home in the area at $223,700.

The Twin Cities ranked 110 out of 317 metro-areas considered in the report. The Naples, Fla. area ranked first the report, with homes there overvalued by more than 100 percent.

Other cities and their respective median home values and overvaluation include: Boston, at $358,600, 5.7 percent; Denver, $225,000, 7.11 percent; Cleveland, $144,300, 2.8 percent; Chicago, $250,900, 20 percent; San Francisco, $791,400, 40.6 percent; and Seattle, $359,100, 33.8 percent.

Cleveland-based National City Corp. (NYSE: NCC) is a financial holding company.

kgrayson@bizjournals.com | (612) 288-2106

Twin Cities home sales continue to slow - August 2006

Minneapolis/St. Paul Business Journal - 2:03 PM CDT Tuesday
by Katharine Grayson
Staff Writer

The housing market in the Twin Cities continued to cool in August, with the number of sales in the metro area dropping by 27.2 percent compared to a year ago.

Overall, trends in listings, sales and home prices also signaled that the market will continue to favor buyers, according to reports from Realtors' organizations. Citing the Housing Affordability Index, the Minneapolis Area Association of Realtors (MAAR) said that, in September, it expects there will be 8.12 homes on the market for every buyer. That means a longer wait for home sellers.

In the metro area, the number of closings in August dropped 27.2 percent compared to the same period last year. More dramatic declines occurred in Anoka and Sherburne counties, which saw decreases of 33 and 22 percent, respectively.

Pending sales also dropped by 23.2 percent in August compared to a year ago.

The median sale price of homes in the Twin Cities, meanwhile, rose a slight 0.04 percent to $235,000.

Those changes, however, aren't necessarily a bad sign for the market, said Todd Shipman, president of MAAR.

"Price growth during the early 2000s was astronomical by our market's standards, and had the unfortunate effect of sometimes discouraging prospective home buyers from entering the fray," Shipman said in a statement. "With interest rates staying low and price growth flattening, we'll all benefit in the long term with a healthier environment for buyers."

The number of new listings for the month climbed by 2.8 percent. That increase is small, however, compared to the double-digit growth reported in earlier months.

"We still have more listings on the market right now than we've ever had," said Jeff Green, president of the North Metro Realtors Association, in a statement. "But it appears that some sellers are deciding to wait a little longer before putting their home up for sale."

Delays stall condo move-in

September 7, 2006
residential

Some of the U Flats residents were housed in a St. Louis Park hotel before they could move into the building.
By Vadim Lavrusik

most University students across campus were able to move into their new home before school started - but some were less fortunate.

Because of delays in construction and inspections, students who bought condos in the new U Flats were not able to move into their units last weekend.

U Flats officials housed some of the students in a hotel in St. Louis Park to alleviate the inconvenience, and said students will be able to move in today.

Individualized studies sophomore Sasha Karosas, one of the students housed in the hotel, was told she would not be able to move into her U Flats unit until Sept. 12.

There are 36 rooms in the hotel - 30 of which were reserved for U Flats buyers who were not able to move in, Karosas said

"I was kind of annoyed, but it's more of an inconvenience that I am in St. Louis Park and not near campus," she said. "I'm not sure whether a shuttle will be provided from (the hotel) to campus."

About 15 residents can't move in to U Flats until Tuesday, and the rest can move in today. The building has 75 one-, two- and three-bedroom units.

U Flats sales representative Jenny Kadlec said all but one of the 75 units will be occupied and about 225 people will be living there this fall.

Karosas temporarily moved in with a friend in Minneapolis to be closer to campus for classes and will stay until her scheduled move-in date.

Tony Zosel, managing director of Multiply, an agency hired to market U Flats, said the developer and the agency have been clear with tenants that they would be able to move somewhere between Aug. 15 and Sept. 15.

"From what I can tell, it's not that big of a deal," Zosel said.

He said owners temporarily are being housed in the hotel because the developer of U Flats owns the hotel.

Zosel said he was surprised the construction was finished by deadline.

"Last February I thought, No way is this going to be done by fall," he said. "It's amazing it got done."

Bill Frothinger, a sales broker for U Flats, said students were able to move their belongings into most of the units last weekend but were not able to take residence because of inspections that took place Tuesday and Wednesday.

The construction stalled because of a delay in an order of windows, Frothinger said.

"These sort of things happen in construction projects; when there is one holdup, everything gets delayed," he said.

Frothinger said the landscaping and parking construction is still in progress and the facility might have a retail coffee shop.

Physics graduate student Marc Landeweer was optimistic about moving into his one-bedroom unit.

Landeweer, who is working on his doctorate, said he thought buying a place was a better investment than renting.

"It was one thing if I was planning on being at the University for a year or two, but I am planning on being here for a while," he said. "It would be a waste to throw $10,000 on rent, so I might as well build some equity and have my own place."

Landeweer was living in University Village apartments until last week, but with the help of his parents purchased his U Flats condo in the spring.

More than 70 percent of buyers have been parents of students, and the demand has been growing, Frothinger said.

Because of such demand the developer has launched a new project called M Flats, which is due for completion next fall.

The location of M Flats will be on 29th Avenue at University Avenue Southeast.

Delays stall condo move-in

September 7, 2006
residential

Some of the U Flats residents were housed in a St. Louis Park hotel before they could move into the building.
By Vadim Lavrusik

most University students across campus were able to move into their new home before school started - but some were less fortunate.

Because of delays in construction and inspections, students who bought condos in the new U Flats were not able to move into their units last weekend.

U Flats officials housed some of the students in a hotel in St. Louis Park to alleviate the inconvenience, and said students will be able to move in today.

Individualized studies sophomore Sasha Karosas, one of the students housed in the hotel, was told she would not be able to move into her U Flats unit until Sept. 12.

There are 36 rooms in the hotel - 30 of which were reserved for U Flats buyers who were not able to move in, Karosas said

"I was kind of annoyed, but it's more of an inconvenience that I am in St. Louis Park and not near campus," she said. "I'm not sure whether a shuttle will be provided from (the hotel) to campus."

About 15 residents can't move in to U Flats until Tuesday, and the rest can move in today. The building has 75 one-, two- and three-bedroom units.

U Flats sales representative Jenny Kadlec said all but one of the 75 units will be occupied and about 225 people will be living there this fall.

Karosas temporarily moved in with a friend in Minneapolis to be closer to campus for classes and will stay until her scheduled move-in date.

Tony Zosel, managing director of Multiply, an agency hired to market U Flats, said the developer and the agency have been clear with tenants that they would be able to move somewhere between Aug. 15 and Sept. 15.

"From what I can tell, it's not that big of a deal," Zosel said.

He said owners temporarily are being housed in the hotel because the developer of U Flats owns the hotel.

Zosel said he was surprised the construction was finished by deadline.

"Last February I thought, No way is this going to be done by fall," he said. "It's amazing it got done."

Bill Frothinger, a sales broker for U Flats, said students were able to move their belongings into most of the units last weekend but were not able to take residence because of inspections that took place Tuesday and Wednesday.

The construction stalled because of a delay in an order of windows, Frothinger said.

"These sort of things happen in construction projects; when there is one holdup, everything gets delayed," he said.

Frothinger said the landscaping and parking construction is still in progress and the facility might have a retail coffee shop.

Physics graduate student Marc Landeweer was optimistic about moving into his one-bedroom unit.

Landeweer, who is working on his doctorate, said he thought buying a place was a better investment than renting.

"It was one thing if I was planning on being at the University for a year or two, but I am planning on being here for a while," he said. "It would be a waste to throw $10,000 on rent, so I might as well build some equity and have my own place."

Landeweer was living in University Village apartments until last week, but with the help of his parents purchased his U Flats condo in the spring.

More than 70 percent of buyers have been parents of students, and the demand has been growing, Frothinger said.

Because of such demand the developer has launched a new project called M Flats, which is due for completion next fall.

The location of M Flats will be on 29th Avenue at University Avenue Southeast.