2008 by the Numbers – Downtown Minneapolis

Information from Regional Multiple Listing Service of Minnesota, Inc.
MLS 302 (Downtown Minneapolis), January 1 –December 31, 2008

 

341

 

Downtown Minneapolis Condos – 2008 Winners

At the beginning of 2009, there are ninety-five buildings in Downtown Minneapolis with over 8,500 condos, lofts & townhomes finished and livable. The building boom of the past decade has increased the Downtown housing stock by 167% (from 3,200).

 

 

Minneapolis Urban Living – February 2009 Condo Count

It’s been a while now since a new condo project launched. As a matter of fact, 2008 saw the last two recent projects under construction close their first sales.

I’ll get to the winners and losers of the year later this week. In the meantime, check out the count.

Before the recent building boom, Downtown Minneapolis had about 3,200 homes in 33 residences. Including new buildings around the downtown core, we now have over 8,500 homes in over 90 residences – and we’re not counting small, 4-10 unit buildings just south of the freeway.

For those who like the idea of living Downtown, there are options.

 

Were we right about the 2008 Condo and Loft Market?

Back in February I wrote a post called “2008 Outlook.” Was I right? Through September, the answer is little yes and a little no.

 

Here’s what I thought, and how it’s been:

 

“- There will be more properties for sale than buyers to buy them.”

 

It wasn’t quite going out on a limb on this one. Yes, there are still more properties on the market than buyers that have come forward this year.

According to Mplsguy.com, there were over 800 condos for sale in February. (source: Mplsguy.com February Condo Count). In the first nine months of 2008, 485 have gone Pending.

August Downtown Minneapolis Coundo Count

 

“- There will, however, be fewer listings in 2008 – for the 3rd consecutive year.”

 

Again, not a stretch for this to be true. No new buildings were launched this year, and buyers found great value as they continued to buy inventory.

Resale inventory has been down as well (a really good thing):

1,192 resale listings in 2007

799 resale listings in 2008

 

“ – We expect the number of sold properties to be flat or a few percentage points above 2007.”

 

Yes and no.

Through September, more resale condos and lofts sold in 2008 than 2007; 303 and 291 units respectively.

Over the same time, new construction sales have slowed – for one really good reason: with less inventory, there is less choice. The average price paid for a newly-build Downtown Minneapolis condo or loft is not in as many first-time homebuyers’ budget (next predication…).

 

“- We expect the average price to appreciate modestly (2-3%).”

 

Yes and no.

Average (mean) sold price of resale listings in 2008 is currently 4.4% lower than 2007; $289,980 in 2008 vs. $303,344 in 2007 for a 1-2 bedroom, 1,280-square-foot Downtown home.

Average (mean) price of a new-construction condo in 2008 is currently 10.8% higher than 2007; $389,094 in 2008 vs. $351,205 in 2007 for a never-lived-in 1-2 bedroom, 1,450-square-foot Downtown home.

 

“Today’s market conditions favor buyers.”

They did, and still do.

 

“Two buildings remain under construction, Phoenix on the River and Zenith - accounting for less than 200 homes. The result – fewer new homes added to a bloated but shrinking inventory.”

 

Phoenix on the River has begun closings, and new residents are living in the new building across the street from the Pillsbury A Mill on the East Bank. The Phoenix is a gorgeous residence that sets a new standard for elegance and luxury. The Zenith, across the street from the Guthrie and Gold Medal Park, and attached to the swanky new aLoft Hotel, will begin closings soon.

 

“Completed new buildings ready for new owners include 730 Lofts, Harvester Lofts, The Ivy, and Bridgewater Lofts. The result – great selection of never-lived-in homes sold by motivated developers.”

 

All three buildings are occupied and continuing to sell well. For a bunch of lofts, the three buildings offer a great selection of neighborhood, price, space and style. The Ivy is set to begin closings mid October.

 

Back in February, I thought this year’s challenges would be negative press, stricter lending guidelines and economic uncertainty. They have been. All three will continue to provide a stiff challenge as we see how the Wall Street rescue actually works.

 

The things I thought would help the market: continued erosion of record-high inventory.
fewer resale listings, amazingly-low mortgage interest rates, and motivated sellers & developers.

 

Fewer listings would provide more balance in most markets, but the uncertainty in the market has finally wedged itself into many would-be buyers’ minds. Thus, fewer actual buyers. The good news is that qualified buyers are continuing to take advantage of historically-low interest rates and good value for money from motivated sellers. See above: “Today’s market conditions favor buyers.”

 

Winners this year have been The Phoenix, Bridgewater Lofts, Skyscape, Harvester Lofts, 730 Lofts, Bookmen Stacks and Flour Sack Flats.

 

Three buildings have sold out this year: The Groveland, 212 Lofts, and Tower Lofts.

 

Coming later this year, a reprise to the most-read post on Mplsguy.com:

Downtown Minneapolis Condos and Lofts: 2008 Winners and Losers.

 

 

 

What happens after the bailout?

Legislation doesn’t move quickly. Seems to me we might have been overly optimistic to think a bill to keep the financial systems moving could be written and passed in a week. It might have been extra-overly optimistic in an election year.

 

 

Home Values: Perception vs. Reality

Almost 20 years ago already, local advertising powerhouse Fallon McElligott produced a campaign for Rolling Stone magazine. It was powerful but simple, like much of their work at the time. It showed two images side by side – one made you think of 60s counter culture, the other was current and not counter culture-ish at all.

 

 

Downtown Minneapolis Condo & Loft Market Holding

One of the metrics we use to compare prices of condos & lofts is price per square foot. After the crazy market of just a few years ago, I thought I’d take a look at where we’ve been – and where we are today.

 

 

Bank Not Helping Reduce Foreclosure Inventory

Update to the post Citibank Screws Buyer:

We left off in April, when a bank refused to comply with the terms of the contract they signed – and held a buyer’s earnest money without reason.

 

Downtown Minneapolis Condo Count August 2008

It’s been a while since I’ve posted anything. It’s been an interesting summer, with changes coming daily – in the market, in lending guidelines, in the mortgage market, new law, etc…

One thing has remained constant, and will remain constant. People are continuing to move – and not everyone has believed everything they’ve read about the Downtown Minneapols condo & loft market. We’re still selling new homes, and new construction inventory continues to be interesting to a lot of buyers.

Here’s the latest count to the best of my knowledge. If you see something off, please post a comment.

a08downtowncondocnt

As I get back at the blog, look for another Downtown Minneapolis condo & loft Winners & Losers so far in 2008; an update to the Citibank story; some inside the biz info about mortgage changes; and other things…

 

Would you pay list price?

It’s a simple question. Based on what I see in the market and what clients in our office are saying – most buyers would think we’d be crazy to suggest it.