For an agent who handles plenty of business from the web I am beginning to see a clear trend in the Minneapolis real estate market that started to surface in the middle of 2011 and continues into 2012: the buying process is taking longer as move in ready and distressed inventory is evaporating from the market.
This blanketed statement does not apply to every niche real estate market across our country but in the areas that have begun to see significant decreasing inventory this statement holds true from a number of reasons. As many of the housing metrics were showing improvement, this change was also supported by the experiences I’ve had and the stories I have heard from many other agents in our market. In our local market:
Inventory dropped year over year by almost 30%!
The inventory of Twin Cities homes for sale has just hit lows not seen since the 2003-2004 time frame. Inventory at the end of 2011 dropped almost 30% from a year ago and I can tell you that my buyers certainly felt the difference in the number of homes that met their criteria. According to Realtor.com release this month there is a nationwide decrease of nearly 22%.
Home Sales in 2011 topped the peak of 2006
Twin Cities home sales in 2011 were the strongest (for non-tax-credit sales) since 2006. Nationwide home sales are up 12% (CNNMONEY.com) from 2010. As the economy slowly improves, consumer sentiment is likely to rise and more people will qualify for loans as they get back to work. A more optimistic population and more people working should push sales activity higher in 2012.
Vacancies are less than 1% in downtown Minneapolis!
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The apartment vacancy rate in the Twin Cities has dropped from 7.3% in Q4 2009 to 2.3% in Q3 2011 and less than 1% in downtown Minneapolis – its lowest level in 10 years. Average rents have risen from approximately $900 to $925 in that same time period. (source: Marquette Advisors via MHP) As vacancy remains low and rents continue to rise, the rent vs. own equation sways further towards ownership and more renters are likely to enter the home buyer market simply becuase it is becoming too expensive to rent.
Bank owned and short sales continnue to decline.
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Foreclosures and short sales have hit multi-year lows and with such high demand for them, inventory is likely to decline even further in 2012. Less competition=less price negotiation power by buyers. Traditional Seller have hit levels we haven’t seen since the early 2000′s.
The big question is how does this play into working with buyers? Simple, less inventory means buyers may be sitting on the sidelines *waiting* till the listing that fits their search criteria suddenly comes on the market. It's going to take a highly organized agent to:
The agents who can properly articulate the current market conditions to buyers out there will be the agents that make 2012 their best year yet!
If you happen to be driving around the Minneapolis Lakes Area keep your eyes peeled for dumpsters sitting the streets. They are a clear signal that an owner is either in the midst of a rehab on an old house or about to tear down an aged property and begin to build a Minneapolis new construction house.
There are different types of buyers coming to the market to buy this type of property.
Plenty of Minneapolis condo and loft owners are in need of larger homes as they have a bun in the oven or already have a few kids and are in need of more space for their growing 
families. These buyers have grown accustomed to downtown urban living along with plenty of storage and good layouts. With increased expectations most of the current inventory within these areas do not nessesarily meet the needs of the buyers without major updates and/or a completely new build. These buyers want good use of space, updated fit and finishes as well as a move in ready product with little to no maitenance. As this cohort of mature urban dwellers require more space the market will continue to see the need for additional Minneapolis new construction homes and remodeled homes.
Another wave of owners is coming to the Minneapolis Lakes Area as well; relocation buyers. Traditionally this type of buyer works at one of the major Fortune 500 companies in the twin cities, is upwardly mobile and looking for a move in ready product as they don't necessarily have a lot of time to make updates and repairs. The expectations are even higher as most all of these people are now coming from high density areas of the world and will not move into anything but an urban setting.
Finally there are empty nesters coming back into the city--some of these buyers will wind up buying a Minneapolis Condo and others will make a move into a Minneapolis new construction home. The typical empty nester profile is someone who has been living in the same house for 10-20 years in the burbs and is making the decision to move back to the city. Many of these people spent some part of their earlier years in or around Minneapolis and are now free of kids so can justify making the move back. Buyers of this caliber can be looking for a range of choices which can include anywhere from a small condo to Minneapolis upper bracket homes.
I know every day all of us are bombarded with an endless amount of blogs on the web relating to all sorts of specific subjects. Bear with me as I take you back to detail my blogging history.
Back in the mid 2000s real estate blogging was a relatively novel idea and SEO for real estate agents was still in its infancy. There were a few little known platforms out there called blogger and wordpress which one could create a reasonable blogs in short order and give someone not only presence on a particular subject on the web but authority from google. My first forray into the blogging world was a simple wordpress blog using nothing more than my name for the URL: www.benganje.com. The objective of the site at the time was to give users access to every Minneapolis condo project site out there along with some brief commentary on the downtown market. I started creating other micro blogs with the intent to focus content on specific condo and loft buildings in Minneapolis. The issue I had at the time was that users not only want to know about a particular building but also what is for sale or lease within that given property.
I soon realized the importance of a good IDX and so I created yet another site tailored to the Minneapolis condo market and also integrated a wordpress IDX plugin for google juice as well as a iframed REW IDX so I could capture leads and track what listings made up their search criteria to make auto searches and truly engage with my leads. Web inquiries started flowing into my CRM at a record pace. I was busy!
Over this same timeline I had multiple google pay per click campaigns pointing to my main site that had yielded good traffic suddenly start to dwindle. Minneapolis is a very web centric market--in our market web traffic patterns started to point to even more organic traffic versus historically significant ppc web traffic and so I needed a competitive advantage fast.
My theory was to channel all of the micro blog traffic to the main site--to this day most people in the SEO industry would cry foul saying every Realtor should focus on building content for ONE web site and one site alone. I very easily put links on my micro blogs labeled: "what's for sale in building X" and channeled these links to specific pages on my main site: I had hit gold and continue to do so today!
My point of this story is that every real estate agent deals in a market and within that market are subdivisions and neighborhoods where buyers and renters search on google all day for real estate. If you can create micro blogs with legitimate content tailored to your areas of focus within real estate and drive the traffic back to your main real estate website I truly beleive you will not only do better but you will harvest higher quality web leads. This takes time and careful execution. Here's an example of a blogger site I did for a building called Bridgewater Lofts long ago and a recent update of a wordpress blog about the Carlyle in Minneapolis--notice the difference in call to action as well as overall layout and detail?
Why this is important? Because as web traffic becomes more segmented users are going to gravitate towards very specific web sites as they narrow in on their web based real estate searches before contacting a Realtor. Users will always start on big sites like Trulia and Zillow, narrow down to sites of your current size then continue coming back to your site if they see your micro blogs catering to specific niche markets they want to buy/lease in.
The agents who can corrently establish micro blogs, web authority and an authentic brand on the web will be the future real estate power brokers of 2012! I wish everyone a happy 2012!
The Carlyle Condos is a luxury high rise condominium building located on the banks of the Mississippi riverfront in downtown Minneapolis. The inspiration for the exterior of the tower comes from the post office which sits to the north and has a similar feel and is composed in the art deco theme. The Minneapolis condo market has a shortage of luxury condominiums making this building attractive to all ages and lifestyles. The building has 252 units with all sorts of sizes and layouts starting at around 1000 square feet for a 1 bedroom unit that sells in the 300s all the way up to units over 3000 square feet and sell for over $1M. For more details on the Carlyle Condos check out the blog Carlyle Condos Minneapolis or call Ben Ganje, Downtown Resource Group.
Location: 100 3rd Ave S, Minneapolis MN 55401
Pricing: $300s to over $1M
Minneapolis Condos and Lofts $100,000 to $200,000
Minneapolis Condos and Lofts $200,000 to $300,000
Minneapolis Condos and Lofts $300,000 to $400,000
Minneapolis Condos and Lofts $400,000 to $500,000
Minneapolis Condos and Lofts $500,000 to $600,000
Minneapolis Condos and Lofts $600,000 to $700,000
Minneapolis Condos and Lofts $700,000 to $800,000
Last week Dorie Dillard in Austin wrote a great post that got me thinking about how a good chunk of Buyers out there look at the real estate market. Buyers these days are lost at sea out there bombarded by anyone and everyone that thinks they are a *real estate expert*. The only thing most can do is cling to a sense of entitlement and believe in the negativity of the macro level forces.
If your business involves working with buyers of all sorts then I want to stress something that will define ultra successful agents of the future relative to those that are fine with the current status quo:
The agent who clearly articulates not just the buying process to a buyer, but also the current market environment (on a localized scale) and inspire them to make a decision to purchase sooner than later will truly be the one who dominates their respective real estate market for years to come.
Think about 3 points I just made in the above paragraph for a few minutes because this has driven the success my team has had in the real estate business and continues to be a driving force for the services we provide. We as agents need to inspire and properly articulate the market for Buyers to have an accurate picture so they can make reasonable offers and buy real estate!
Anyone can briefly talk about the process to a prospective Buyer out there. But does every Buyer know about the importance of having an experienced agent let alone how the buying process actually works? Give me a nickel for all of the Buyers walking around out there without being under contract with the agent they are working with and I wouldn’t need to work anymore:) Give me another nickel for all of the Buyers out there that don’t see purchase docs till the night they are writing their first offer:) And lastly give me a quarter for every Buyer out there that doesn't know how agents make a living till they ask if they owe you anything the day of closing!
If you have a focus in a particular niche of the real estate market it is essential to be able to speak the language of that given market. You can do as Dorie does and give plenty of stats to your buyer clients on active, pending and sold units on a weekly or monthly basis-a big help! You can go a few steps further and discuss recent developments taking shape around the area be it residential or commercial as well as point out individual listings that have sold and most importantly list to sale price for point of reference. Buyers simply love knowing what’s going on more than what things say on paper and explaining plenty of details gain Buyer’s trust and confidence in the market.
Lastly-and this is most important-Buyers are not going to write an offer on anything until there is a bit of inspiration behind the purchase. Buyers want to believe in something that is bigger than us. They want to know that this is a tight knit community, that there are people is this neighborhood they are buying into that they will know for the rest of their lives, that there are others that share their interests. People we need to be able to paint a picture for our Buyers to believe in!
Markets go up and down and years from now once again every agent out there will be busy handling Buyers and Sellers. Those that are learning from their lessons now sharpening their teeth on the current market are preparing themselves for an even greater opportunity in what lies ahead in the future.
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#1 Resource for Minneapolis Lofts, Condos & Fine Urban Homes
Meet local Real Estate Agent Ben Ganje who has been involved selling numerous condo projects and working with local buyers for years in Downtown Minneapolis.
As one of the leading Agents in the Condo & Loft market Ben can navigate the market conditions to your advantage with his experience and insight.
In the past few years Minneapolis has undergone a complete change. Suddenly the idea of living downtown is an attraction for everyone at any age range. With so many people making the move back downtown it’s no wonder all of the amenities that have sprouted up in different areas of the city. Living downtown means walking to work for some, for others it can mean steps away from their favorite restaurants and cafes. Needless to say young and old are making the move to downtown Minneapolis for the exciting lifestyle.
Ben Ganje moved downtown 7 years ago to an area along the riverfront that was slowly taking on a transformation from old mills and empty parking lots to world-class theaters and condo living. “At the time not everyone could envision the turnaround of the city,” Ben says. Fast forward to the present and it’s hard to believe the Mill District was ever a quiet area with the new Guthrie Theatre, MacPhail Center for the Arts, a Starwood Hotel under construction, farmers market in the summer, new parks and an array of living options. During the warmer parts of the year Ben and his wife often take walks along the riverfront. “You can usually meet a handful of your neighbors just taking a walk over the Stone Arch Bridge,” he says, “At dusk, the city lights from the river are inspiring.”
Raised just outside the Twin Cities, Ben often visited Minneapolis in his formative years. He fell in love with the liveliness of the city and at a young age knew that he would eventually be living in the middle of it all. After spending the majority of his formal education out east, Ben’s business administration degree brought him back to Minneapolis. Now living along the riverfront in the city with his wife, (who is expecting in August!) they enjoy all the amenities of the newly developed area. The idea of less time spent commuting to work and maintaining a home give this couple plenty of time to enjoy the urban life.
For years Ben’s career in Real Estate has been involved in the downtown markets with condo and loft developers responsible for the success of numerous projects. As a leading agent in the city, Ben guides buyers advising them on the market conditions and gives them the information they need to make the right decision. As Ben puts it, he couldn’t give a client specific information on a particular housing market around the Metro area, however, name any building downtown and Ben could tell you numerous points of interest about the construction, original developer background, amenities and price points. Let Ben’s solid record of experience in the urban market make your goals of living downtown a reality! As a resident of downtown Minneapolis it’s a lifestyle he lives and breathes every day. With extensive area knowledge, up to date insight into the availability and the distinctions between the different loft and condo communities available to you, he can help you find your ideal property.
Living Downtown for the past few years and working with a number of Developers and Buyers has given Ben experience and understanding. His dedication to his clients means he is available when they need him. Unlike a typical single family home, condominiums and lofts have a completely different set of details to understand and having an agent that can these points and interpret them to your advantage is critical for a successful buying or selling experience.
Next time you are looking to buy or sell in downtown, have a chat with Ben. His experience and sole focus on downtown will put your dreams in motion. Work with a professional who understands this unique market. Ben Ganje is your Downtown Resource. He’s here to lead your way to success and help you realize your real estate goals.
Contact him today!
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