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Jennifer Kirby, the Luxury Agent

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Is Flipping Homes as Bad as the Media Makes it Out to Be?

02-22-08
Jennifer Kirby, the Luxury Agent
I will be the first to say that there are some good things that come out of our Realtor Associations, like consumer advocacy, Realtor education, and the option now for health care. But I don't agree with everything that comes out of the mouths of our so called "leaders" here in the Realtor world.

Today I was reading an article written by Glenn Dorfman, the COO of the Minnesota Association of Realtors, in which he implies that flipping and making money fast in the real estate world is a bad thing. He even states that professional Realtors "deplore" the practice. Now I am glad he had decided to speak for me on that account because I would have hated him to state how I actually feel. To say that I should deplore making fast money, is like saying I should deplore the rush caffeine brings..

Before the market started booming, I flipped homes because they were affordable (Once it became fashionable to flip, we got out of the business because you could no longer find a good deal). My husband and I found homes that were usually abandoned by the owners, negotiated a purchase price with the home owner (usually an heir who no longer wanted the home, or lived out of state) that was a win-win for both parties, then rehabbed the homes and updated them to the current tastes of the market. It was a great business. Sure, we made a profit when we were finished, and trust me, the houses we rehabbed afforded maybe a profit of $10,000 when all was said and done. But as a real estate agent, it was even more rewarding when a neighbor approached us to thank us for what we had done....that being removing an eyesore from the neighborhood and replacing it with a home that would help improve surrounding property values.

In the past few months, a lot of negative publicity has been given to flippers. Sure, there were those that jumped into the market to make a quick buck and at the same time, produced a lot of bad remodels. But there were also those out there that operated the flip as a business, not a hobby, and did a lot of good. They gave buyers a product they wanted, and not only rehabbed homes, but rehabbed neighborhoods.

I for one took personal pride in each home we finished. I remember when a contractor had put together a kitchen, and the countertop seams did not meet properly. When I asked him to fix it, he made the comment that a buyer in this price range of a home wouldn't mind the flaw. But see, I don't produce shoddy workmanship, no matter what type of home it is and his "flaw" was not acceptable to my standards. I told him to fix it, or not get paid, which no big surprise he fixed.

Flipping homes is not a bad thing, it is just another way of selling a home. Some people buy homes, rehab them, then rent them out. But not every home fits nicely into that model. Believe it or not, a home that has been rehabbed does hold a higher market value than it used to, and if the market bares the new price, then there is no problem with flipping. Like I said before, flipped homes, when looked at as single home, does not afford a large profit. It is only when you have volume that you can make a lot of money in flipping. (Don't believe what all the HGTV shows tell you about the huge profits those featured home owners are making. They never reveal the true profit, after capital gains, taxes, expenses, etc are taken out. )

So there you have it, my view on the issue - one that comes from experience in the matter. Greed is defined as "the selfish desire for or pursuit of money, wealth, power, food, or other possessions, especially when this denies the same goods to others". I think the term "greed" is being thrown around too easily in our society today and being used to describe instances when it shouldn't. Making money is not greed, it is capitalism.
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The 2007 Residential Real Estate Market Report - Part 1

02-22-08
Jennifer Kirby, the Luxury Agent


Today the Residential Real Estate Activity Report for 2007 was released by the Minnesota Association of Realtors. It tells us what we all knew was happening here in the Twin Cities. Listings stayed high, while closed sales took a nose dive. To put it in numbers, over 105,000 listings were for sale, but only 40,055 closed. That's roughly a sale rate of 38%.


In the last few months, I have had people ask me about the market. I have always told them that while the market is down, we are back to 2002 sales levels, which in itself wasn't too shabby of a year. Low and behold I was right on the money! We all new the roller coaster ride had to end sometime. Now we can look back the last five years and follow the trends. Trends typically follow a sine curve, so it will be interesting to see if 2008 will be the year we hit bottom.

With record sales the last five years, we can also see what areas of the Twin Cities sold the highest volume of homes. NO big surprise but the Lake Minnetonka area tops the list. Homes around the lake have sky rocketed, with older homes being torn down and being replaced with mansions. Other areas have seen the same trend, especially in Edina. There have been a couple controversial tear-downs the last two years.

The next installment will look at appreciation levels and housing affordability.

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How Some History Should Stay in the Past - the Excelsior Waterfront Problem

02-09-08
Jennifer Kirby, the Luxury Agent
When you are a lover of historic homes, you can't help but cringe anytime an old home sits and rots, or when a new owner decides to take a house down, or add on to it some horrible addition. Many communities still are behind the times and do not have a historical association to protect our historic treasures from ruin. But thankfully Minneapolis and Saint Paul have plenty of organizations that care about this buildings.

But when does this history become a burden? While there are many different examples of how homes can be burdens on a community, one burden some might not think of are historic buildings that no longer exist.

Hmmmm...but how is that possible?

The city of Excelsior is in such a dilemma. Sitting on Lake Minnetonka, Excelsior has a great downtown district, mostly because anyone can enjoy the lake view and stand at the water's edge, without a building obstruction in the way. One of the best features is an open park, an area I have enjoyed during the summer months with my kids. But during 1904-1922, the pavilion pictured above stood near the same spot.

A developer is currently petitioning the city to allow him to reconstruct the pavilion, in the same spot it used to stand on the shoreline of Excelsior. There are many residents who do not want to lose the lake view that draws tourists to the area. For 80 years, the site has been open, and many want to keep it that way. But there are also residents of Excelsior that like the idea and think the new pavilion would add to the historic nature of the town.

But who should win? A pavilion that predates the open view park, but hasn't been around since 1922, or the open space, which has been enjoyed by residents and visitors for 80 years? When does a historic building need to bow out gracefully and, for a better phrase, stay dead?

I guess the stand I would take on this issue would be on the side to keep the site as is. I don't believe that it is in the publics best interest to build a new pavilion, that in this case would be used as a town hall, with some public access. No matter how great the developer can make the site, it still will be taking away an open space which can be currently be enjoyed by all. To me, the pavilion is a great part of Excelsior history, but it does not have a place in the town's future, especially since it hasn't been around for so long.

Could the developer be pushing the historic button of residents to get his plan approved? Maybe, but he does have a history of restoring old buildings in Excelsior. I have no doubt he has good intentions, but sometimes it is best to just leave well enough alone. His plan is putting an unfair burden on local residents, making them decide between a view they have enjoyed for a long time, or restoring a building that helped create the town itself.

The photo above is of the current view from Excelsior, looking out to Lake Minnetonka. I think I like this view much better. What do you think?

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Visit my historic home blog to learn more about architecture in Minnesota.

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Secret Find of Minneapolis - Frozen Waterfall

01-31-08
Jennifer Kirby, the Luxury Agent

Minnehaha Falls In Winter

Minnehaha Falls is a beautiful area to visit anytime of the year in Minneapolis. This weekend I went to the park to get some snapshots of the frozen waterfall. Yes, those are people walking at the bottom of the falls. At 53 feet, it is quite a sight to see in summer and in the winter.

History

Minnehaha Creek flows 22 miles from Lake Minnetonka through Minneapolis before ending its journey at the Mississippi River. The word, Minnehaha, comes from the Dakota language and literally means, "curling water", or "waterfall". Minnehaha Falls is located not too far from where the creek meets the Mississippi. History has it that the falls were named "Brown's Falls" in the early 1800's after United States Army Commander Jacob Brown, while the Dakota called Minnehaha Creek, "Wakpa Cistinna", meaning "Little River".

Minnehaha Falls is quite famous. It is the site location for Henry Wadsworth Longfellow's poem, "The Song of Hiawatha", published in 1855.

As far as the geology of the site, the site of Minnehaha Falls is linked to Saint Anthony Falls, which is several miles upriver on the Mississippi. Around 10,000 years ago, St. Anthony Falls was located near the site where Minnehaha Creek entered the river. As erosion brought the falls upriver, it passed Minnehaha Creek, causing a new waterfall to form. The story actually becomes even more complex because the Mississippi eventually abandoned the portion of St. Anthony Falls that was then nearest to Minnehaha. The lower portion of Minnehaha Creek now flows through a wide and deep channel once belonging to the larger river. The end of Minnehaha Creek where it joins the Mississippi River is the lowest surface point in the city of Minneapolis at 686 ft above sea level. Below is a photo of the river valley gorge.

Photos of the falls have been taken over the years, 1860, 1865.

If you would like to see a slideshow of addtional photos of the frozen waterfall in Minneaoplis, visit the full post on my outside blog.

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Summit Avenue Historic Home, Saint Paul - #26

01-25-08
Jennifer Kirby, the Luxury Agent


This weeks Historic Home in St Paul is 353 Summit Avenue.

Built in 1882 for William Dean, the home "only" cost $15,000 to build. Mr. Dean was a partner for the local wholesale hardware firm, Nicols, Dean, and Gregg, and also sat on the Great Northern Railroad board of directors. Little is known about the architect. A photo exists of the home taken in 1895. Designed as a Queen Anne Victorian, it is a great example of half-timbering.

Around 1900, the home was altered beyond recognition of its original Queen Anne style. Below is a photo of what the home had looked like up until 2005.

As you can see, it looks nothing like the beautiful Queen Anne of 1882. The front gable and chimneys are the only remaining pieces visual to the eye that haven't changed. In 2005, a very expensive renovation was begun, with the owners wanting to bring back the facade of the original home. After a complete inside/outside renovation of the main house, and an exterior renovation of the carriage house, the home recently sold for $1.7 Million with Edina Realty, and photos of the home are still available via a virtual tour. The home has over 7000 square feet, 6 bedrooms, 7 bathrooms, and for one simple word, is stunning.

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If you would like to learn more about Minnesota architecture, visit my blog dedicated soley to Historic Homes and buildings of Minnesota.

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