Invest in Walkability: Sub-urban goes Urban
The numbers are in, and they do not lie! The Suburban Sprawl is ending, and the Urban movement is here to stay! New building is occurring within Minneapolis at a rate of 6-7x that of the strongest suburb.
It occurred to us several years ago that this investment trend was very real. One of our first clients, Will & Erica of Keewaydin in Nokomis, relocated here from a diverse housing background ranging from California to Detroit to Cincinnati. Upon arrival and climate shock, they leased a loft downtown to get to know Minneapolis. Will entered the Minneapolis market place with an immense amount of experience for his age, having owned a home in Detroit that he purchased around 200k, having sold it and seeing the value depart to nearly 80k. He was certain of one thing: "Suburbs Suck, as their commutes lengthen and overhead increases, people are going to want to live in the city again."
Will was right on, as five years later, his creekside Nokomis tudor is richly restored inside and out: with a modern open kitchen, finished basement with media room & marble bath, master bath with his/her sinks, a massive rear patio with an italian terrace and rich landscaping. The last item on their list is a custom garage with loft storage above to compensate for their newly finished basement.
All said and done, investments of these kind within city neighborhoods can be lucrative. As dumpsters and Volvo SUV's fill the streets around them, Will & Erica are set to enjoy their middle aged years without the hassle of long commutes and big box stores, all while their daughter Ellen can grow up within the walkable community of Nokomis.
Recalling the sale prices of entry, and inventory levels, it is astonishing the see the differences in price point. Starter homes in Hale Field near the creek were once easily acquired between 180-240k, now getting in the door around there is 275-300k. On the higher end of things, we have witnessed our Lake of the Isles and Linden Hills buyers who entered the marketplace between 450-600k comping out between 700-850K once updates have been completed.
We are bullish on the urban housing trend and its likely upward movement. This year we already have several clients seeking to depart their current settings of Maple Grove, Minnetonka, and Rosemount, seeking greener pastures near the Lakes and Creek in South Minneapolis.
Highlighted below are several homes we sold previously within character rich South Minneapolis. Pay particular attention to their disclosed purchase prices and present values.
1927 Keewaydin Tudor- "this old house" role models
The spotlight of this article, Will & Erica's 1927 Nokomis tudor had some selling features initially (top photo), 5 years later the constant renovation projects are nearly complete. (Bottom 2 photos) Acquired in the mid 200's this home is now nipping at 400k!
The before and afters on this Tudor show the exceptional investment made in the home over the course of a 5 year ownership. This often creates the "Jones'" affect as negihbors begin to catchup with home improvements.
1927 Creekside Estate
This 1927 tudor was owned by Grandma Clara for decades, under priced by an estate agent. The clients won the bidding war with literally no real estate searching experience. They have now realized 80-100k in equity over the first year of ownership!
This 1912 Kingfield Two Story was an amazing starter home play, with built ins, and a completely new California-style landscaped greenspace with cocktail patio. This was a hard fought purchase with several backup offers in the mid 160's, current value is 220k!
1934 Project Windom
This 1934 Windom / Tangletown Tudor is just one block south of the creek and blocks to Kowalski's and South Lyndale Liquors. The savvy newlyweds did an impeccable, complete, modern renovation, taking a home acquired in the mid 200's and leaping it straight to mid 500k home. This will be featured this coming spring as renovation story.
1922 Kingfield #projectbungalow
1951 Creekside Estate
This 1951 built 1.5 story is nestled in Hale Field just a 1/2 block South of Minnehaha Creek. The proud new owners secured this home in the 150's and have witnessed sales on their block in the mid 300's!
1920 Windom Turnkey
1926 Hale Field Craftsman
1908 Tangletown Farmhouse
1916 Lyndale Stately
The Linden Hills Teardown: McMansion Effect
The final depiction and closing point is a moderately controversial one, and subject to further study in 2014. As the construction trend shifts to Urban markets, is the City of Minneapolis prepared to monitor and enforce architectural standards of building on the new construction market?
Below is a teardown sale we had on York in Linden Hills. The developer paid 200k for the home and sold the new spec home for 825k. This design is not in question, however something that is witnessed in Nokomis and south Minneapolis, is the influx of value driven builds, with modern plastics & vinyl. It has has been difficult to see them popping up amongst the brick and charm of our 1920's-40's neighborhoods.
1913 Kingfield Renovation Showcase
This 1913 Kingfield two story was secured in multiple offers with a strong termed offer, the previous owners where relocated and prior to departed completed a five star luxury kitchen remodel. Current value is 40k over price paid in the short term of ownership!
East Harriet ATM Duplex :)
Keewaydin Grandma Special
This Keewaydin estate home was underpriced, sold in the 180's, the young couple went ballistic on the cosmetics and have brought this brick colonial into the modern era, with current value of 255k, they are in the equity driver seat!
Land of Lakes Double Bungalow
This amazing 1913 craftsman duplex is nestled between Harriet and Calhoun in Linden Hills. Stretching to close at 380, seeming high at the time, this duplex offers locale and cash flow to support 450-500k in the coming years.