John Murphy Reports

There are currently 17 properties in foreclosure in Medina, MN right now.   The mortgage or judgement value is over $15.5 million.   These properties are houses and vacant land or lots.   Properties are in foreclosure in several neighborhoods including Wild Meadows, Bridgewater, Medina Highlands, North Ridge Farm, and Belle Terra.

Of course the biggest home in foreclosure is Denny Hecker’s.   TCF Bank is on the hook for $5.2 million on this one.

To receive the list of foreclosures click the link for Medina Foreclosures.

Medina, MN has seen closed home sales transactions increase 23% year over year through October.  So far this year 48 homes have closed whereas last year it was only 39.   I believe the main reason closed sales activity has increased because prices have dropped by 10% compared to one year ago.   This is a consistent pattern that we see throughout the Twin Cities.   Prices drop by 10-20% and sales start increasing!   Imagine that!

2009 YTD through October:

Median Sales Price: $582,500  (-10.4%)

Average Sales Price: $616,105 (-10.2%)

Average Days on Market: 209 (-8.7%)

Percent of Original Price Received at Sale: 89.6% (-1.6%)

Click the link for Medina, MN Home Sales statistics found at the Minneapolis Area Association of Realtors site.

In 2006-2007 the median and average sales prices in Medina consistently were in the $800,000 – $850,000 range.

The reality is that there have been few sales in Wild Meadows this year where it’s difficult to purchase a home under $800,000.    In Foxberry Farms, it was common to see several sales each year in the upper $700,000’s as well as in to the $800,000’s.   There have even been a few $900,000’s, but not this year.   In Bridgewater, homes used to consistently sell for between $850,000 -$950,000 but now it seems they have to go to the upper $600,000’s to mid $700,000’s to sell.   Medina Highlands is a beautiful luxury townhome community in Medina.   They used to sell in the upper $500,000’s to mid $600,000’s but now they appear to be selling in the mid $400,000’s to very low $500,000’s.

With more new construction competition coming from the likes of Pulte Homes’ Elm Creek Highlands development located in the Wayzata School District, this is likely to continue to keep the pricing pressure on homes in Medina.

I’m receiving a number of hits to my blog with people searching for information about the possible Bridgewater foreclosure.  At this point that home is not on the market from what I can see.

The Builders Association of the Twin Cities published its February 2009 Hot Sheet last week.  You can find the full report here.

Below is one of the more interesting graphics in the report produced by MarketGraphics Research Group.  Despite the fact that there has been a major slowdown in construction in the Twin Cities, it seems to me like we are still building too many homes.   If you look at the graphic below, you’ll see that there are approximately 4200 completed new homes for sale. (These include single family, townhomes, and condos in the 13 county metro).  This graph below also appears to show that there are approximately 2840 new homes under construction right now in the Twin Cities metro. (Click picture to enlarge in a new window).

Here’s the problem.  I just ran an MLS search for homes (single family, townhomes, and condos) that were built in 2008 and closed in 2008.  A total of 1281 units sold in 2008.  My search did not include homes built in 2007 but sold in 2008.  But based upon 1281 units selling in 2008 and if the numbers below are correct, then there is a 3.2 year supply of completed new construction.  If you factor in the 2840 units being built, that would be another 2.2 years of supply.  What’s not clear is where this supply and new construction exists and what kinds of units we’re looking at.  I suspect many of the completed new construction units and the units to be built are multi-family projects – i.e. townhomes and condos.  Of course my belief is that we need those like we need a hole in our head.  (Click picture to enlarge in a new window)

Builders and developers have to make a living, but I am not convinced they are slowing production fast enough to keep pace with the market.  I believe they need to cut building to get ahead of the market.  Based upon that, new construction should be cut by 75% this year and another 50% next year and remain at that level through 2011 or until we see a marked improvement in Twin Cities real estate.  I realize it’s difficult to do this and one can’t operate a command and control economy when so much of this is based upon micro markets.  If there is demand in Maple Grove but not in Shakopee then go ahead and build in Maple Grove.

Part of all the building that continues is based upon projects that were approved years ago and already under construction.  For example, Lennar, Minnesota’s number one home builder, has a massive project underway in Northwest Plymouth with its Legacy Park and Taryn Hills developments.  It wouldn’t make sense that they would stop building that.  However, they just added a few hundred townhomes to the oversupply of townhomes already available in Plymouth.   They will sell them.  Existing or traditional townhomes owners are at virtually an insurmountable disadvantage when it comes to selling right now if you’re price points are anywhere near those of Lennar’s.

In the northwest metro, there are several new home projects that are ploughing ahead.  These developments will continue to put major pricing pressue on existing homeowners who are trying to sell.

Below are just some of the developments underway in the northwest suburbs:

• Bonaire
• Taryn Hills
• Legacy Park
• Prominance Woods
• Prominance Creek
• Woodcrest
• Bridgewater
  

Having a healthy new construction market will be important for the overall market.  The challenge for many builders today is there are too many spec homes that still need to be sold.

The foreclosure in Bridgewater has not hit the MLS yet.   There have been a couple of other very beautiful, brand new houses that the banks just put on the market a couple of days before Christmas.  They are incredible opportunities for the buyers paying attention to the deals this market is offering this Christmas season.

There remains a foreclosure for sale in Foxberry Farms and a short sale in Wild Meadows.
Contact me if you’d like to see some of the bank owned new construction homes that just came on the market.

New construction foreclosures, REOs, short sales and distressed sales from Twin Cities builders in the western suburbs.
From $500,000.
FREE List with photos and descriptions.

www.BuilderForeclosuresMSP.com

Banks changed their strategy.
10 Things You Need to Know Now Before Buying a Bank Foreclosure.
FREE special report.

www.HowToBuyTwinCitiesForeclosures.com

There’s a luxury home in Bridgewater that sold for $1.1 million a year and a half ago that has gone through the foreclosure process.   It’s expected to hit the market within the next 3-4 weeks.  It’s unclear as to what price the bank will put on the home.  Bridgewater is in the Wayzata School District.
If you’d like to stay up to date on this foreclosure, please go to www.MedinaDistressSales.com and mention Bridgewater Foreclosure.

There are presently 7 finished, brand new spec homes for sale in Bridgewater on Lake Medina.   If you’re not familiar with this new development, it’s just west of Foxberry Farms in Medina.  It’s about 3/4 of a mile west of County Road 116 just off of Highway 55 in Medina, MN.
The project is developed by Charles Cudd Homes and originally just started with 3 custom home builders, but it has since been opened up to a few more.  It seems several of them all decided to build a spec.  Much of this was done in anticipation of the Fall Parade of Homes.  I’m sure many of the builders would have thought at least a few of these homes would be sold.  Here’s a link to the plat map if you’d like to get a better sketch of the development.

The average price for the 7 for sale is $950,000.  Click here to see the list of homes for sale.   They are listed with various agents and builders. The most recent sale in Bridgewater from the MLS closed on 10-15-08 for $890,000 sold by Wooddale Builders.

Bridgewater is often seen in between Foxberry Farms and Wild Meadows in terms of upscale luxury neighborhoods in Medina.  The fact is, if you want a brand new home in Medina, you need to go to Bridgewater.  Foxberry Farms has been built out for the past 6-7 years and Wild Meadows was basically completed a couple of years ago.  There may be one lot left in the south end and perhaps a lot or two in the north.   But with both of those options in Wild Meadows, you will need to build a home in the $1.5 – $3.0 million range.   In Bridgewater, you can still buy a beautifully finished brand new luxury home for about $900,000.

Clients of mine just purchased this brand new home in Maple Grove for $365,000 with the seller paying their closing costs.  This was yet another bank owned deal!

The home was built in 2007 by LeGran Homes LLC which typically builds homes in the $700,000 to $1 million price range.  A few of their homes are for sale in the Seven Greens development near Providence Academy at Vicksburg and Schmidt Lake Road.  LeGran also built luxury homes in upper bracket developments in Medina in both Wild Meadows and Bridgewater.

Unfortunately for LeGran Homes LLC, they are not going to be one of the survivors in this housing downturn.  The bank took this home back and had to take a hit in the process.

The home was unrealistically listed for $630,000 in January 2008.  It had successive price reductions until the bank took it back from LeGran in late March, early April.  It was then relisted for $459,900 and then took several price reductions until it was finally purchased by my clients.

It’s a 5BR/4BA home with a 3 car garage in cul-de-sac in a beautiful neighborhood in Maple Grove.  It has a 1/4 acre lot and over 3,000 finished square feet.

While the bank lost money, I’m sure they are happy to finally have the property sold.  My buyers are happy as they have a beautiful home at a terrific price in a very nice neighborhood.

There are many more deals and opportunities out there.  If you’re interested, contact me at www.DistressSalesTC.com.   To learn more about buying foreclosures, be sure to read this post and check out www.HowToBuyTwinCitiesForeclosures.com to receive your special 6 page report on “The 10 Things You Need To Know Now Before Buying a Foreclosure.”

Below are some photos of this beautiful home.  Click on any of the pictures to enlarge.

  

  

I’m receiving several inquiries each week these days from people interested and curious about possibly purchasing a distress sale property in Medina.   Much of the housing in Medina is in the Wayzata School District.   Some of the neighborhoods you might be interested in include:

• Wild Meadows – see www.WildMeadowsHomeInfo.com
• Bridgewater
• Foxberry Farms – see www.FoxberryFarmsHomes.com
• Tuckborough Farms

I’ve set up a quick subscription service for those who are interested in receiving e-mail updates through my exclusive VIP buyer service.  Just let me know what you’re looking for at:

www.MedinaDistressSales.com