October 27th - Zillow announces they are pausing their home purchasing program for the remainder of the year due to a myriad of challenges. They chalked it up to a lack of human-power and said there was a backlog of homes they needed to sell with delays in renovations and prepping the home for sale. Sounded like a bunch of BS at the time and turns out, it really had nothing to do with people power. The announcement was to pause home buying and sell off the remaining 3,800 homes they had in inventory.
If you know me at all, it’s safe to say I was smiling ear to ear. I joke often that Zillow is the bane of my Realtor existence. Maybe it’s the zestimates that are off by a long shot.. maybe it’s the fact they’ve upended our MLS system.. maybe it’s because they’ve done everything they can to eliminate the Realtor from the home buying & selling process. Yup.. all of those things are the reason I was smiling on October 27th.
The company that wanted to remove human interaction (and Realtor) from the home buying and selling process had to pause because of what.. wait.. what? Did they pause because they needed people to execute the process? Yes, that’s part of it but the aftermath in the last couple of weeks has been extraordinarily fun to watch and eye opening on what really happened.
It’s no industry secret that Zilllow has been buying and selling homes at a loss since their iBuying program Zillow Offers started years ago. I remember reading stats that they were losing $10,000 per home sale at one point. That was simply transaction numbers only – buy vs. sell. However, if you
factor in what it took to get a seat at the table with the consumer in the first place – advertising dollars, cost of offices, staff, etc the loss was calculated to be $75,000 - $100,000 per home sale. There were many versions on this and articles to read but that was the range of what was on the backend of their losses per sale.
Back to the $10,000 loss per home flip and it doesn’t sound so bad. Capture the market.. perfect the formula.. reduce the losses with the next few thousand homes sold and so on. Soon the $10k loss per flip would be $5k.. then $0.. then profit. It’s a good formula in theory but when you’re buying homes with a flawed algorithm that creates your purchase price, it’s bad from the start and it got really bad as the market changed.
Has anybody ever looked at the zestimate for their home value? Of course, we all have. It’s fun to see what your home is worth at a click of a button but how accurate is it? On Zillow’s own website you could check the accuracy of the zestimate per market area. I remember looking at the Mpls/StP market not long ago and it said that the zestimate was within 10% of the market value 60% of the time.. within 20% of the market value 80% of the time. Whoa.. slow down a minute and read that again. You’re telling me that if the market value of my home is truly $500k – that Zillow would give me a range of $450,000 - $550,000.. and they were right only 60% of the time! Yes, ladies and gentlemen – the zestimate is crap and their own website will give the accuracy ratings. You have to dig deep though, several clicks and a rabbit hole or two and you’ll find it.
Zillow wanted to ramp up convenience in the home selling process. Hats off to them by the way and I applaud them for doing so. But when you create a billion-dollar business model with 10% swings in actual value, you have a recipe for disaster.
As a Realtor, we have access to tax data and recent sales numbers at our fingertips. It was oddly fascinating to watch them lose time and time again. We’d see them purchase a home for $375,000.. list it for $390,000 and end up selling it for $360,000. I would smile every time! In Phoenix, 93% of their homes are being sold at a loss. In the Twin Cities, 65% of their homes are being sold at a loss. They’re in 20 + market centers and none of them are going well. Remember that loss is simply based on purchase vs. resale numbers. Transactional
only numbers if you will but don’t forget the marketing budget, office space, staff and hard costs to get there and the losses are massive. Depending on what article you read and what day it came out – their losses for this year alone will tally upwards of $550,000,000.
From October 27th until November 15th Zillow stock has tumbled nearly 40%. They’re currently hovering around $64 per share- down nearly 70% from their high price early this year at nearly $200 per share. Not only are investors the casualty of the zestimate but they’ve announced they’ll lay off 25% of their staff due to this implosion. That’s 2,000 people out of a job and a company that’s lost $20B (that’s billion with a “B”). Well played Zillow.. well played.
When Zillow abruptly shut down its home-flipping business, blaming labor and supply shortages it was only a matter of time until the flawed zestimate got the spotlight. Current and former employees described an internal initiative called Project Ketchup that turned the flawed zestimate into a cash-burning extravaganza. That’s not a joke. Project Ketchup was real.
They wanted to catch up (yes, pun intended and how they named it) to their rival Opendoor and capture market share. It turns out when you’re backed by Wall Street cash and building a business, profit isn’t as important as market share. So back to the “we’re losing $10k or so per home flip” conversation a few paragraphs back. The idea was to capture the market, reduce the losses into gains and “boom” you’ve got a viable business and cracked the code.
Depending on what article you read, they were averaging 3,500 home purchases and sales per year. In the beginning of this year, they implemented Project Ketchup and in the 2nd quarter of the year they purchased over 9,000 homes with another 3,000 in the 3rd quarter. In just a few short months, they purchased more than twice as many homes than they had in the previous 2 years combined. So they took a losing formula and decided it was the time to steal market share and went off on a bender of purchases. Insert a few laughs, some eye rolls and an “I told you so” and we’re back to the current day watching the aftermath.
Absolutely gorgeous modified two-story home with amenities inside and out in a tranquil woodsy setting. Enjoy the vaulted entry, soaring ceiling height and open floor plan. The entry opens to a 16’ vault that cascades through the living room. With 10’ ceiling height on the rest of the main floor & the open floor plan, natural light and great views are all around. The home features 3 bedrooms including a main floor owner’s suite with private bath, walk-in closet and tons of storage. The main floor features hardwood floors, gas fireplace, both formal & informal dining spaces, mudroom with lockers & sunroom that exits to your private backyard.
The backyard setting is private and tranquil with generous landscaping, paver patio, firepit, gardens and retaining walls. Perfect for quiet family time, grilling or entertaining.
The lower level has tons to offer with multiple areas to entertain as well as two bedrooms, bath, laundry and storage. Enjoy the cozy family room or cut loose in the newly remodeled wetbar & recreation room complete with reclaimed wood surround fireplace and entertainment center. The wetbar features a wine & beer fridge, custom lighting and enough seating for all your family and friends.
Just blocks from the north shores of Forest Lake, this home has the perfect country setting with easy access to the lake, parks & rec, downtown and more. Priced to sell, this home won’t last long. Come take a look today!!
With nearly 6,000 sq ft and five bedrooms / four bathrooms, this home is a must see. A fantastic combination of elegance and common sense amenities & layout. The cul-de-sac setting in front & rear pond views are a perfect setting. Four bedrooms upstairs with a massive loft perfect for additional family space. A family’s dream for entertaining with a lower level bar & entertainment center with walk out to your private backyard complete with patio, in-ground heated pool, three-season porch, hot tub & firepit large enough for all of the family and friends. Need garage space? With a three-car garage on the main and three-car garage on the lower level with separate entry, you’ll have all the storage and shop space you’ll need. Don’t wait until spring - call us today!
This gorgeous two-story home has the perfect country setting with just under two acres of perfect views and scenery. With over 2,000 finished square feet and an unfinished lower level, this home provides the opportunity to add your touches and build equity. Amenities all round including hardwood floors, gas fireplace, 9’ knock-down ceilings on the main floor, granite tops, center island and walkout lower level. Enjoy quiet nights on the front porch or family time in the yard, this home is perfect! A gem waiting for spring but won’t last long - call us today.
REALTOR
Team Lead | Listing Specialist 651-379-1581 joeholmes@kw.com holmesgroup holmesgroupmn www.holmesgroupmn.com www.holmesgroupmn.com/mnoffers
REALTOR
Team | Marketing Manager Buyer Specialist 612-964-2524 hlpederson@kw.com
REALTOR Buyer Specialist 612-865-0400 jaymangine@kw.com jay.mangine
New Construction Specialist 651-387-6262 btadamsonwbl@aol.com
There are some clear winners in the aftermath and one of the front runners is a company called Pretium Partners. Pretium is currently the 2nd largest single-family landlord in the country and rumored to be buying over 2,000 homes from Zillow. Not necessarily a good thing for the consumer as they’re also at the top of the list
for complaints against them for evictions during the eviction moratorium. The company will of course say they’re by the book and the tenants say otherwise. No need to get in the middle of that but clearly a winner is the institutional landlord. Invitation Homes – the nation’s largest single-family landlord is reportedly interested as well. The sharks are circling!
Who wins and who loses. What are they going to do with all of those homes?
No doubt there are a lot of Realtors that find joy in watching the Zillow implosion (myself included). Unfortunately, the depth of that perspective can be a bit shortsighted. Depending on the competitor, it can be fun to watch them go out of business or it can be a message. Here it’s a mixed bag. Zillow has been trying to put us out of business for a long time and it’s with great joy we sit back and enjoy the implosion. However, most Realtors are going to miss the message. The message is very clear that the consumer wants another option in selling a home. Which brings up another winner in this aftermath – other iBuyers and specifically, the local ones.
With the advent of institutional buyers entering (and exiting) the market, it gives the consumer another option in selling their home. The traditional method of listing your home, preparing for sale, staging, repairs, showing, inspections, appraisals and so on can be a thing of the past if you choose. You can now sell to a company for pretty much the same price the market will offer. They’ll relist and sell the home taking on the challenges, costs and process and hopefully make a profit along the way.
MarketPass is a clear winner and couldn’t be more proud of this company. Here’s an example of a national model done on a hyper-local level with the expertise needed to be successful. Who’d have
thought that buying a home for the sake of a quick resale would take detailed analysis to do it right? Just about anybody buying and reselling a home but don’t tell that to the folks at Zillow. MarketPass is a company that we are partnered in and launched earlier this year. We’re like Opendoor but buy and sell homes only in the Minneapolis / St. Paul market. The large national model done in a hyper-local market with a focus on customer service means the consumer doesn’t miss out. This means that the benefit of having this option will always be there and done with expertise and customer service that only a small business can offer.
The consumer is still the big winner here as long as small and local businesses pick up the slack.
Taking the national model and doing it with local expertise means a home selling experience like no other. You can pick and choose a closing date.. change it if your circumstances adjust.. maintain possession of your home for days after selling so you can coordinate your move.. leave any personal property behind if it doesn’t fit, can’t move it or simply done with it.. no requirement to clean your home and certainly no worry about staging, showings, inspections, appraisals, buyer default or any of the challenges a traditional sale can create. In the end, the consumer is still the big winner as there’ll no doubt be many local companies filling the void. Luckily for this in the Twin Cities – MarketPass is already here!
For more information about MarketPass or for a cash offer on your home visit us at www.HolmesGroupMN.com and click on CASH OFFERS
The sea of colorless kitchens will likely never fade: The classic look is a sure bet that’s polished, if not unexpected. But there’s a new wave emerging with statement-making blues reshaping tired kitchens. Local pros say the fluid color can take on different dimensions depending on the shade’s undertones. Inside a Minneapolis Victorian, a custom watery blue stain brought the house into the 21st century—without sacrificing its bones.
It’s no secret in the design community that Carter Averbeck, owner of Omforme Design, doesn’t shy away from color and contrast. Which is exactly what Jorge Quintero and Robert Schneidewend were looking for when they asked Averbeck to help them remodel their 1902 home on Portland Avenue in Minneapolis. “It had this tiny, craptacular servants’ kitchen,” Averbeck says. “It wasn’t meant to be pretty; it was perfunctory.” That all changed in Averbeck’s design,
Color is making a comeback in the kitchen, and for Twin Citians, it’s looking a lot like our lakes. From steely matte gray to glossy bold cobalt, kitchens turn up the visual volume.
which opened up the space and went bold in blue and brass. As for the rest of the home, most rooms are just as colorful—which isn’t far off tradition for Victorian homes. “They have a love of things that are different and interesting. They love the old but bring new with it,” the designer says of the homeowners. “They’re modernists living in a Victorian.”
1Stained To Last The blue on the cabinets is a custom stain on oak wood. “There’s a lot of oak in the house,” Averbeck says. “We went traditional with materials and how the cabinetry was built. All of it was built as if it were made during the Victorian era. The only thing that’s modern is the stain.” Oak trim around the windows also nods to the era.
2A Bright Light Averbeck had glass-front cabinets installed in front of new windows. “If we were to put in a traditional kitchen, in as far as upper cabinetry, there wouldn’t be any place to put in windows,” Averbeck says. “That way they can display martini glasses in the cabinets, and we still get the light.”
3Statement Piece “The island has these interesting panels, which is sort of Carter’s brilliant mind,” Jorge says. “We didn’t want the island to look like the rest of the kitchen”—rather, it’s meant to be a piece of furniture. The laser-cut
panels are a black that complements the light fixtures. A Brizo faucet and a natural quartz top add to the contemporary aesthetic. “It’s now like a piece of artwork,” Averbeck says.
4Care For A Cocktail? The butler’s pantry, which acts as the couple’s bar area,
features the home’s original leaded-glass cabinet doors. “We knew we wanted an area to wash cups and glasses, and the hammered copper sink gives us more work space,” Jorge says. The silver-backed glass-tile backsplash, from Tile X Design, and black granite countertops carry from the kitchen into the pantry.
151 Stallion Lane, Lino Lakes, MN 55014
$274,000
Keller Williams Premier Realty
1640 Widgeon Circle, Centerville, MN 55038
2060 Giesmann Street, Roseville, MN 55113
Fantastic townhome that’s move-in ready with updates all around. In the coveted Centennial School District, close to shopping and interstates. Enjoy the vaulted 2 story entry that leads to your open concept main floor. The kitchen has tons of storage, large pantry, custom lighting, stainless appliances and center island breakfast bar. The main floor walks out to your private rear patio & generous landscaping. The upper level is complete with a loft, laundry and 3 bedrooms. The master suite features a massive walk-in closet and private master bath. New roof & siding, newer garage door & smart opener. Bonus storage in the front entry closet! This home is turn-key and set to impress.
With nearly 6,000 sq ft and five bedrooms / four bathrooms, this home is a must see. A fantastic combination of elegance and common sense amenities & layout. The cul-de-sac setting in front & rear pond views are a perfect setting. Four bedrooms upstairs with a massive loft perfect for additional family space. A family’s dream for entertaining with a lower level bar & entertainment center with walk out to your private backyard complete with patio, in-ground heated pool, three-season porch, hot tub & firepit large enough for all of the family and friends. Need garage space? With a three-car garage on the main and three-car garage on the lower level with separate entry, you’ll have all the storage and shop space you’ll need. Don’t wait until spring - call us today!
Fantastic two-story home with tons of amenities & detail. Enjoy the open floor plan with casual spaces great for family or entertaining. The main floor features a gourmet kitchen, hardwood floors, sunroom with brick surround fireplace and walks out to your private rear deck and backyard with fire pit, privacy fence and generous landscaping. The upper level can be used as a large master suite with two bedrooms, loft and master bath with soaking tub. The lower level features a tiered theater room wired for surround sound, wet bar and don’t miss the wine cellar! With a new furnace & water heater, this home is ready for you!
3698 131st Avenue NE, Blaine MN 55449-6527
$389,900
Bonnie Carlson
Keller Williams Premier Realty
6316 Deerwood Lane, Lino Lakes, MN 55014
$479,900
Ron Mikolai Keller Williams Premier Realty
8446 Copperfield Way #80, Inver Grove Heights, MN 55076
$189,900
Keller Williams Premier Realty
Country living - yet close to town! How many homes in Blaine do you know that have an abundance of wildlife? This one does!!? Over 1/2 acre of nicely wooded lot with a large storage shed, newer roof and siding, and a new garage door opener. The house has 4 bedrooms and 2 baths, a large living room and a large family room, with some new flooring in the home.
Beautiful home on a quiet cul de sac in Lino Lakes is a Must See! This light & bright home is perfect for entertaining w/it’s main level fireplace & spacious living room. The inviting kitchen shows off granite counters, hardwood floors, double oven, & SS appliances. Mingle around the center island which also provides extra cabinet space! Meticulously cared for, this home features 3 bedrooms on the upper level. The large 24X13 primary bedroom has cork flooring & a luxurious walk-in closet w/ modular shelving & drawers. The walk-out lower level provides additional room to entertain & has an office/craft room. Heated oversized 3+ car garage has an epoxy floor. Other features include a heated floor in the laundry room, UG sprinklers & UG fence. Relax on the deck overlooking a picturesque pond teaming w/wildlife. Put on your ice skates this winter & have some fun! Enjoy many miles of trails throughout the neighborhood & into the Rice Creek Chain of Lakes Preserve. Centennial Schools, too!
Clean, move-in ready, and affordable Inver Grove Heights Townhome. Recent updates include fresh paint throughout, new carpeting, new countertops, updated appliances, solid panel doors, new vanity and flooring in the bathroom. Relax on the patio surrounded by mature trees. Priced below market for a fall sale.
Joe answers questions he received from clients. Feel free to submit your own question. Email us: joeholmes@kw.com
Ooh.. loaded question as that can go so many directions. Trends in selling are shifting to convenience and less about the traditional listing methods. Cash offers.. less Zillow of course – bye bye Zillow! As for new construction trends – in touring the Parade of Homes this fall I noticed a change in the owner’s suite. We’re seeing the bedroom itself going smaller with the emphasis on closet size & storage. One model I saw – 675 Sunset Court by Zawadski Homes had a stackable washer/dryer in the owner’s closet as well as center island & built-in dressers, etc. It screamed “common sense”.
&Our approach to selling a home is customized around the seller. So that differs from person to person. However, the easiest & cheapest thing you can do to your home for the most upside is staging, staging and you guessed it, staging. Not to be confused with bringing in furniture & décor which is a high-end staging technique. Basic staging techniques are FREE and take manageable effort. This can be as simple as: moving furniture, removing clutter, clearing out storage spaces, cabinets, touch-up paint, clean carpets, etc.. The goal is to make your home look more organized, create more functional living spaces and flow and clean! We bring in an interior designer for this and have some fun with it. It sounds intense but it’s really not. Think of it this way – everything in your home is going to be packed and moved. Staging is the technique of pre-packing and leaving the best presentation left for us to capture.
Gobble Gobble Wibble Wobble do a turkey dance. We’ve traditionally been a turkey family for Thanksgiving but last year added a ham into the mix as well. Parker absolutely loves turkey and would be really bummed if we didn’t do one. He’s been asking for Turkey for weeks now and to help him get his fix, we did a Friendsgiving recently and will dive in for more at Thanksgiving. Hopefully that will be enough to satisfy him.
That’s a great question – the water bill, unlike other utility bills, follows the home and not the individual living in it. So if you don’t pay your water bill, it will eventually end up being paid through an assessment to your property taxes. If you don’t pay Xcel Energy – they’ll send Uncle Guido after you. When selling your home, they make sure the current water bill is paid in full and add a line item on the closing statement for that purpose.
This one has some depth to it.. so just a little backgroundthe question comes from the foreclosure moratorium ending and if that will lead to foreclosure and then those homes getting listed and boost current inventory. My thoughts on that are no.. no, I don’t think we’ll see that inventory hit the market. There’s a ton of “process” to make that happen and a lot of disruption along the way. The foreclosure process isn’t quick... It takes time and can spin so many directions. Taking a home back, managing it, cleaning & repairing it.. that takes time and Zillow proved recently it couldn’t handle 3800 of them at once.. And let’s talk about the disrupters on this too. If you had 5,000 homes to sell across the country, wouldn’t you talk to one buyer for that inventory rather 5,000 individual buyers and processes. With the advent of Wall Street into residential real estate, it makes me think it’s easier to sell that to one company in the event it even gets to that point. We know that’s not Zillow – but Open Door might be able to handle the volume.
Simply put, the cost of new construction is not cheap. There are way too many factors that go into pricing a home that it would be difficult to give a cost per foot basis but here are some concepts to work with: The main floor is always the most expensive floor to finish on a per foot basis. This is where you have most of your finishes – kitchen, mudroom/laundry, fireplaces, windows, built-ins,
lighting, owner’s suite, etc.. and that drives up the cost of the main floor. Building up is cheaper because you don’t have the extensive finishes. Beds, baths, laundry, family rooms and so on are the typical finish on a second floor and cheaper to finish than the main floor. The cheapest floor to finish is a basement. However your fireplaces, bar, entertainment areas and so on can have massive range to them. Picture a bar.. you can have a $25k bar or go nuts and have $100k. It just depends on the budget. The price per foot on a home.. the actual structure itself .. not including anything outside (the lot, driveway, landscaping, well/septic, etc) is at a minimum of $200/sq ft and that’s on a very cheap side. Of course, the sky’s the limit and you can spend as much as you like as well. Is this price going down? Simply put – No. The price of new construction is not coming down and we don’t anticipate it ever will. Think of how hard it is to find good labor. Now extrapolate that through the home building process and think of all the materials and human power that go into a build. Nobody is taking a pay cut anytime soon!
Why is the water bill for my home on the settlement statement for closing?
Do you see a jump in inventory from foreclosures ahead?
Drink without a pause
Open, as a bottle
Graven image
Sprinter's assignment
Alternative to a towelette
Word with catch or hang
Chest thumper
Terrier type
Lollobrigida of "Hotel Paradiso"
Bordeaux wine
Kampala is its capital
Pervasive emanations
Exemplar of innocence
Geographic depression
Stew pod
Backing for an exhibit
Scale's reading
Bug on the road
Presidential power
Field of endeavor
bane
Fibula neighbor
Fragrance
Surgeon's work attire
Word with thumbs or ears
Replicated, in a way
Certain woven container
Up to such time as
. Crystal-lined stone
Bombastic speech
. Upscale coffee pots
Type of bag
Mountain pool
Advanced math course
. Island feast
Su pplier of pressure?
. Sports surprise
Olympic medalist Devers
Window frame 33 Verbalized
. Dinner and a movie, perhaps
They may be checked
Nabisco cookie 39 Leprechaun land
. Brief vacation 42 With little effort 43. Misshapen 44 Finishing nails 45 Accumulate, as a debt
Bulletproof apparel 48 Saharan 49 Natural coat 50 Place in a hold 51. Feel pain
African republic
Reporter's quest ion
In the style of
