Navigating the New Rules In Metro Real Estate
Game-changing forces are dynamically reshaping our communities, roiling the value of our homes, and rewriting the rules of how we traditionally think about investing in residential real estate in the Twin Cities metro area. The trend—the revitalization of settled, desirable communities and neighborhoods—is largely organic and has its roots in our DNA as Americans.
Our culture encourages us to pursue the next best thing—a belief that also permeates housing desires. Many Americans feel they deserve to live in a great location but do not want to put up with the norms and limitations of the old house occupying the site. So, instead of making lifestyle adaptations to outdated structures, they choose to tear down, build new, or make substantial upgrades.
On the surface, this approach might seem to make sense, but unless you carefully examine and research underlying assumptions about purchase price, cost of improvements, actual benefits, and likelihood of eventual payback, it can be extremely dangerous fiscally. Most of us still view our home as an asset, not a disposable commodity. We rely on the property to increase in value during ownership, to support our longer-term financial objectives and goals.
However, as many homeowners in Edina and other upscale communities have discovered—to their shock and dismay—the traditional home improvement principles and passive equity growth of yesteryear are no longer dependable or predictable, because there are too many variables now in play. Revitalization is literally rewriting the rules of today’s housing doctrine, delivering unexpected, often devastating outcomes to the uninformed and unwary.
The picture, however, is far from bleak. As with any marketplace upheaval, opportunities also arise that can enhance your overall position. The key is to recognize those situations, learn how to turn them to your advantage, and leverage that knowledge for your benefit.
In our MasterWerks Perspective series we share observations and thoughts about these changing forces governing today’s real estate market. We provide well-researched, proven creative tactics and offer advice about how you can deploy those tactics to your advantage. Ignorance is not bliss, and our goal is to help people like you, interested in learning and then utilizing that knowledge to your benefit.