The Longfellow Neighborhood of Minneapolis Has Some Great Deals on Real Estate in the Hiawatha Neighborhood

I may be wrong about this, but it sure seems like some of the best deals on real estate in the Longfellow Community are popping up in the Hiawatha Neighborhood.

For those of you not familiar with the Hiawatha Neighborhood, it’s the neighborhood just north of Minnehaha Falls. Here’s a map:

Hiawatha Neighborhood

Here’s an example of why I think Hiawatha has some great deals:

4525 42nd Ave S

This is at 4525 42nd Ave S, putting it blocks away from Minnehaha Falls (and Sea Salt), the 46th Street LRT station, within short distance of multiple bus lines including at least one that will take you across the river to downtown Highland Park (only 1 mile away, so walkable and bikeable).

Take a look at the pictures. 3 bed. 2 bath. The hardwood floors appear to be in great shape. The kitchen looks awesome. And, it has a 2-car garage. This can be had for $218,900, or something like $1,500/mo with a small amount down.

Is this particular home a good deal at that price? I don’t know. What I’m saying is that homes near Minnehaha Falls are listing for what seems like great deals based on their location and condition.

Has the Pendulum Swung Too Far on the Housing Market?

I wrote the other day that it’s far easier to buy a home than many people realize. In that piece, I mentioned that the perception is that it takes as much as 20% down to buy a home. Here’s a perfect example of someone trying to sell the perception that it’s difficult to buy a home these days when it’s actually not. This comes from former Treasury Secretary under Bill Clinton, Lawrence Summers, writing in the Washington Post about what President Obama should address in his State of the Union speech:

Third, no American, regardless of his or her ideology, should be satisfied with the way the nation’s housing finance system is working. After a period when cheap mortgages were too available, the pendulum has swung too far; a lack of finance is holding the economy back. The clearest evidence is the growing number of lower- and middle-income families paying rents to the private-equity firms that own their homes at rates far above what a mortgage would cost.

Fannie Mae and Freddie Mac, the government-sponsored housing enterprises, have historically provided support to the mortgage market in difficult times. It is high time they be forced to step up and support would-be lenders. Ultimately, government support for owner-occupied housing should be curtailed, but now is not the time.

Here’s a snippet from Wikipedia about Summers’ role in the housing market back in 1999:

Summers hailed the Gramm-Leach-Bliley Act in 1999, which lifted more than six decades of restrictions against banks offering commercial banking, insurance, and investment services (by repealing key provisions in the 1933 Glass–Steagall Act): “Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,” Summers said.[21] “This historic legislation will better enable American companies to compete in the new economy.”[21] Many critics, including President Barack Obama, have suggested the 2007 subprime mortgage financial crisis was caused by the partial repeal of the 1933 Glass–Steagall Act.[22] Indeed, as a member of President Clinton’s Working Group on Financial Markets, Summers, along with U.S. Securities and Exchange Commission (SEC) Chairman Arthur Levitt, Fed Chairman Greenspan, and Secretary Rubin, torpedoed an effort to regulate the derivatives that many blame for bringing the financial market down in Fall 2008.

It could be argued – and has – that the policies Summers pushed for back in 1999 lead to the housing market overheating through a combination of lax lending standards, the ability to turn home loans into commodities (make crappy loans, bundle those crappy mortgages into a package, pretend that they’re less crappy because they’ve become diversified crap), and a major lack of oversight on how these derivatives were handled (including fraud at many every levels of the lending process).

Now, we certainly have tightened things up from the point where people could get a mortgage for a home without proof of income, a down payment, or even a credit check, but it’s really difficult to buy Summers’ argument that “the pendulum has swung too far”. For proof of this, look at the National Association of Realtor’s existing home sales stats for 2012:

The preliminary annual total for existing-home sales in 2012 was 4.65 million, up 9.2 percent from 4.26 million in 2011. It was the highest volume since 2007 when it reached 5.03 million and the strongest increase since 2004.

People are buying houses. Lots of people. In fact, pretty much the only times people have purchased more homes than they’re buying now were during the housing bubble, and for a short period when the government was offering up to $8,000 home buyer tax credits:

Historical Existing Home Sales Numbers

As I see it, home sales are up, for-sale inventory is down (leading to increasing home prices), which will likely lead to more people recovering from being under water on their homes (owing more than what they purchased their home for during the bubble), new condo developments are going up, and new single family home developments are breaking ground. These are not the symptoms of a real estate market where “the pendulum has swung too far”.

I’ve never been Treasury Secretary or President of Harvard like Larry Summers, but – from my perspective – I’m not seeing the problem that he’s claiming needs to be solved.

Myth: It Takes 20% Down to Buy a Home

One common frustration I hear from people who haven’t owned a home before is that it will be nearly impossible for them to save up enough money for a down payment. They’re often under the impression that they need 20% of the purchase price in order to qualify for a loan, which can be a tens of thousands of dollars hurdle.

But, as someone who’s purchased homes, refinanced homes, and knows a few people working in the real estate and lending industries, I can tell you that this is a myth. It’s not even close to accurate.

Based on my experience, the biggest factor determining whether you can afford a home is your credit score. Credit Karma is a decent place to look up where you stand today. If your score is in the mid-600s or higher, you may want to talk to a mortgage broker or your credit union to find out what you’d qualify for. Credit Karma also offers decent advice on what factors are having the biggest impact on your current score.

After credit score, your current income and work history (how long you’ve been at your current job) are important factors.

And, after that, how much you can put down toward the purchase comes into play.

But, to be clear, it’s FAR less than 20%. In fact, you may need 3% or less to get a deal done. And, you may be able to get some of that down payment as a gift/loan from your friends/family. Loans with down payments less than 20% generally require private mortgage insurance (PMI) which sucks to pay, but it’s worth looking at the numbers to see how your fully loaded payments compare to renting.

The bar is far lower than prospective first time home buyers tend to realize.

Now, put that together with home prices being down a bit from their peaks, and interest rates being a historically low rates, it’s a darn good time to consider buying.

Real estate agents tend to earn well-deserved criticism for saying “now is a great time to buy” regardless of what the market is doing. As someone familiar with the industry but not directly profiting from your decisions, I think now is a good time to look at how the numbers add up for you.

An Update on Snipe Sign Spammer 612-208-SELL / (612) 208-7355

I wrote back on September 26th about snipe sign spammer, 612-208-SELL / (612) 208-7355. At that time, I said:

Out of all of the real estate agents you could work with to sell your home in Minneapolis, why would you choose to work with a real estate agent who litters in your neighborhood?

Since then the snipe spamming hasn’t stopped. In fact, Sasha and I had a chance to take down fresh snipe from 612-208-SELL / (612) 208-7355 during a walk around the neighborhood on Monday.

612-208-SELL / (612) 208-7355 Snipe

I managed to knock down three of the corrugated plastic signs using a 3-6′ extension painting pole. It’s not really designed to be used as a 6-foot bat, but it does the job.

This sniper has added bus shelter snipe spamming to the mix with spam posted in East Lake Street’s shelters. Those were easier to clean up.

Phone Number Reputation Update

Perhaps some people seeing his illegal signs with decide to Google this snipe spammers phone number before giving him a call? Or, at least before deciding to work with him? If so, here’s what they’ll see on Google as of today:

612-208-SELL / (612) 208-7355 on Google

1. The Deets.
2. Johnny Northside’s Blog
3. A site that’s syndicated my blog post.
4. Minneapolis’ 311 Service report where I’ve been reporting snipe spam.
5. My Friendfeed account where my posts syndicated.

and in all numbers:

612-208-SELL / (612) 208-7355 on Google

1. The Deets.
2. A site that’s syndicated my blog post.
3. PhoneAddressDirectory.com, where I’ve left the following review/complaint:

This person litters Minneapolis with illegal signs using the phone number 612-208-SELL on the signs. Please do not do business with people who litter in our beautiful city. There are far more reputable real estate agents in this town than this person. If you need a recommendation, I’d be happy to help.

4. Placeblogger, who syndicates this site.
5. My Friendfeed account where my posts syndicated.

Since this person uses an unlisted number and no brand on his sketchy sign his online reputation ends up being tied entirely to that phone number. Everyone’s phone number has an online reputation whether they’d like it or not. If you’re the kind of person who thinks it’s okay to litter in the City of Minneapolis even after being asked to stop, you’re the kind of person who’ll end up with a phone number with some negative publicity.

Freedom Mortgage Complaints / Reviews / BBB

I screwed up. Out of curiosity, I filled out a form on what I thought was an informational mortgage website in order to see rates I may qualify for these days. But, instead of receiving rate info online (as promised), instead of having my privacy respected (as promised)1., I immediately received a barrage of phone calls and emails from lenders who this scummy company sold my information to.

I became a lead without my permission.

One of the companies that called me was Freedom Mortgage. They called from a Hastings, MN phone number (651-829-3263), but have no office in Hastings. In fact, no reference to Freedom Mortgage popped up when I Googled the number that showed up on caller ID (SKETCHY!).

I explained to the woman who called me that I had filled out a form online looking for data, but ended up receiving a ton of calls from people like her. She, like every other mortgage broker who called me, chose to ignore this nugget of information and jumped into her sales script.

I explained to her that her company must be partnering with a scammy company. She took offense at this and explained that her company has a perfect rating with the BBB. Ratings at PissedConsumer.com are far different.

So, I asked her how she got my name. She couldn’t explain that.

If you’re going to take offense when I accuse you of partnering with a scammy lead generation company that misleads people into turning themselves in for borderline predatory mortgage sales calls, be sure that you have your story straight. She did not.

Seven minutes into this exercise in futility, I remembered that I could record this exchange for quality assurance. After telling me that she was going to hang up on me because I accused her company of working with sleazy companies, she once again failed to explain how her company got my name:

This is an extraordinarily powerful feature in Google Voice. For incoming calls (incoming only) you can record your calls by pressing 4. Google then announces to both parties that the call is being recorded, then then magic begins.

1. I read a blog post on Zillow that recommended the website that sold my information. I’ve since Googled the company and have found that their domain no longer shows up in google search results (even when type their domain name into the search engine. That gives me a sense of how scammy this service is / has become.) Note to self: think twice before trusting Zillow in the future.

Faces of Snipe: 612-208-SELL / (612) 208-7355

612-208-SELL / (612) 208-7355 Spam

I’ve recently been busy reporting snipe spam signs in the Longfellow neighborhood for 612-208-SELL / 612-208-7355. This person has been littering Minneapolis’ neighborhoods with his predatory real estate spam for nearly three years, based on this post from Johnny Northside where the same phone number was being used on signs in November of 2009. (The city’s handling of snipe violation could use some improvements if a business can go this long without getting the hint.)

Out of all of the real estate agents you could work with to sell your home in Minneapolis, why would you choose to work with a real estate agent who litters in your neighborhood? If Minneapolis is anywhere near the national average, there are more than 1,000 real estate agents living in the City of Minneapolis. That’s not counting people living in surrounding cities who could buy/sell real estate in Minneapolis.

Out of more than 1,000 agents, choosing to work with someone who litters the neighborhood you currently live in is a really poor decision.

It gets worse.

I ran a reverse lookup on this snipe spammer’s number to find out who’s behind this litter:

612-208-SELL Spam

So here we have a person who’s willing to litter North and South Minneapolis with illegal snipe advertising, who uses an unlisted phone number to solicit leads from those illegal signs. Is this the type of person you’d trust for one of the largest financial transactions you’ve ever made? When there are so many legitimate real estate agents who are willing to stand behind their own name, this decision seems obvious to me.

Faces of Snipe: Paul St Andrew of LongfellowHomes.net

Snipe Sign by Paul St Andrew

If you live in the Longfellow Community of Minneapolis, you may have seen some snipe litter advertising longfellowhomes.net. It popped up in August in our city parks. Seriously, the person behind this decided that it would be a good idea to advertise his personal business in the city’s parks. I’ve taken down at least half a dozen of these signs and have heard from friends in the neighborhood who’ve taken down signs as well.

That person behind the snipe litter is Paul St Andrew with RE/MAX Results:

Paul St Andrew: Longfellow Snipe Spammer

Paul’s trying to make a living. I get that. But, so are the hundred or so real estate agents serving the Longfellow Community who somehow manage to make a living without planting signs in our neighborhood’s parks.

As a Longfellow resident with some decent real estate connections, I’m asked for referrals a couple times a month on average. One agent who clearly won’t be on my referral list is Paul St Andrew since he’s decided that it’s cool to litter in the Longfellow Community for personal profit.

For what it’s worth, here’s where Paul St Andrew currently has sold properties:

Paul St Andrew's Sold Listings

And where he has active listings:

Paul St Andrew Active Listings

I’m not sayin’ but I’m just sayin’ that I don’t see any action in the Longfellow Community on either of those maps. Sure, he’s capable of representing buyers or sellers in Longfellow, but there are other agents who have more experience in the Longfellow Community who don’t litter the neighborhood with snipe advertising in the parks.

If you’re looking for an agent to work with to buy or sell a home in Longfellow, let me know. I can put you in touch with someone who knows the neighborhood well, has a ton of experience, and doesn’t litter the neighborhood’s parks with snipe advertising.

Aberdeen, Mississippi Homes

Aberdeen, MS Home

Back on December 31st, Carly and I passed through Aberdeen, Mississippi for lunch. The only place open on the main drag was a scratch and dent grocery store that had a small deli where we ate some scratch and dented food.

Then we drove around town to check out the historic homes. There is quite the contrast. For example, the home pictured above looks out across the street at these neighboring homes:

Aberdeen, MS Homes

According to Zillow, current homes for sale vary between $18,500 and $63,600 in this neighborhood. One thing that differed from small towns of similar size that I’ve been through in the Midwest is that there didn’t appear to be many unoccupied homes. While the per-capita income is $23,530 (26.3% of families live below poverty line), it looks like the real estate market is somewhat in line with what people can afford.

Ashley Prasil Added to White Collar Crime Map

You know that mortgage fraud thing I posted about yesterday involving Sheri Delich? Ashley Prasil was involved in it too. As I understand it, it sounds like Ms. Prasil was involved in setting up straw buyers for units in the Cloud 9 Skyflats. So I added her to my white collar crime map.

That’s my 2nd Eden Prairie addition, following Nathan Mueller’s criminal activities ($8.5 million embezzlement).

Sheri Delich Added to White Collar Crime Map

I’ve been slacking on updating the White Collar Crime Map I launched last August. Today, I added Sheri Delich after she pled guilty to wire fraud and money laundering tied to the Cloud 9 Skyflats travesty in Minnetonka. That’s the third addition for Apple Valley, which was also home to Trevor Cook ($190 million in currency fraud) and Connie Hanson (Embezzled $1 million in Veterans Funds). On a per capita basis, I think that puts Apple Valley in the lead on a per capita basis.

In Jennifer Bjorhus’ report at the StarTribune, Bjorhus reports that Delich’s lawyer is going to fight for lenience in the sentencing by arguing that Delich was a “minor player”.

That doesn’t seem to correlate with the facts, as I understand them.

Delich was the mortgage broker, which means she was the one who controlled the money. She was the one would could have said no. Or, as Delich’s lawyer concedes, “[Delich] said she did what Trooien told her to do” which means that, rather than doing her job, she committed wire fraud and money laundering.