Property Q&A in Edina>Question Details

Tony Mcmunn, Other/Just Looking in Naples, FL

What is the realistic Sale value of this house in 2009?

Asked by Tony Mcmunn, Naples, FL Thu Feb 19, 2009

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This question is about this property: http://www.trulia.com/nearby/sold/Minnesota/Edina/z-16/t-G_M…

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Teri is right about the point on value but I thought I'd expound on that a little more. Jack's quoting of current MLS stats is usually ok but this is a unique house that I don't think can be compared with general MLS stats. Looking at activity over $1M in Edina since September we see the following:

86 for sale
3 houses Pending Sale
14 sold

14 sales in 5.5 months gives us approximately 33 months of inventory... a pretty high number. Of those that have sold, the average Cumulative Days on Market is 247 days and sold for 87.5% of original list price.

While Edina is a VERY STRONG market and very stable even in this market, the high end of homes have been hit heavily with the difficulties in getting reasonable mortgage terms on Jumbo loans. Down payment requirements have increased dramatically (20% to 25% down is not uncommon) and rates are a good 1.5% - 2.5% higher than for conventional conforming loans. While buyers in this price point almost always have strong asset bases, they either don't want to tie their money up in real estate or their money is stuck in investments that have fallen in value and they are skittish on selling them at a loss... hoping to recover their investment by waiting.

It is hard to put a value on exactly what impact the mortgage market has had on these higher-priced homes since it varies by buyer but my feeling is that a substantial amount of value has been lost due to these less attractive financing terms.

Additionally, there is some competition in this price point with builders with new construction and foreclosures of new and slightly used houses. For example I have a foreclosed new construction rambler in Minnetonka that was originally listed for $1.6M by the builder and is now priced at $900,000 with the bank/seller. Many, but not all, buyers looking at Edina would look at Minnetonka and vice-versa.

There is no quick answer, like Teri and Jack have mentioned. If you are looking to sell and I was listing the home what I would do is have 15-20 of my fellow agents come out to the house for a price opinion before listing the home for sale... simply because in this market the more perspectives and opinions you can get the better you can address the issues that get in the way of a successful sale.
0 votes Thank Flag Link Thu Feb 19, 2009
Hi Tony: Edina has seen an 8% increase in value in both the Month to Month comparison (Jan '08 to Jan '09) and from 2007 to 2008 it ended with an 8.1% - GREAT news for Sellers in Edina. Average market time is 127 days and 92.2 of list price. Your home has a higher market value and a lot of that has to do with the lake views. Depending on the condition of the property, updates, etc. it should sell for about $1.5m give or take a couple hundredk.

In order to give you a more intelligent analysis, we would need to see the home and compare it to other properties that have sold and are currently listed. It looks like an extremely beautiful home. I hope you are enjoying the Florida sun. We are at a nice frigid -8 with winchill - yuck! All the best, Jack:-)
Web Reference: http://JackieFunk.com
0 votes Thank Flag Link Thu Feb 19, 2009
Hi Tony!

You might not like this answer but it really is the truth in regards to real estate. "A property is only worth what someone is willing to pay for it today." Without an buyer ready, willing and able to negotiate an offer, the value is best determined by a qualified appraiser. A local REALOR can also go through and give you a market analysis or price opinion but that is only an estimate until a buyer walks through the door.
0 votes Thank Flag Link Thu Feb 19, 2009
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