Weekly Twin Cities Real Estate Market Activity Report

OK I lied...This is the last one of the year.

Savvy buyers actively looking for a home to buy are in the driver's seat in the Twin Cities housing market. The supply of homes for sale continues to set records, with new listings for the week ending December 22 rising above the same week last year by 17.2 percent. Approximately 51 percent of these properties are re-lists that have already been on the market in 2007—a common ratio during the holiday season. Pending sales declined by 9.3 percent for the same time comparison. This is an improvement over the lackluster numbers seen last week.

HAPPY
NEW
YEAR!

"Champagne for my real friends...real pain for my sham friends."
-Tom Waits

Weekly Market Activity Report

Here's the Last One of the Year:

As the year winds to a close, the supply of homes for sale remains plentiful, with 28,651 homes on the market in the region—an increase of 14.5 percent over this time last year. For the week ending December 15, there were 1,213 new listings added to the market, approximately half of which are re-lists that have already been placed on the market at least once in 2007. This is an increase of 8.0 percent in new listing activity compared to the same week last year; newly signed purchase agreements (pending sales) were 27.0 percent behind.

Reasons for Hope?

It's been a challenging year for everyone in the Real Estate profession, Buyers, Sellers, Mortgage Brokers, Title Closers, Inspectors and on and on. I have seen a lot of my associates and friends really struggle to get by, myself included, in this changing marketplace. I have to believe that things will turn around, eventually. There are signs of hope: lower interest rates, reduction in inventory, better pricing. 2008 is unlikely to be a year of total rebound but I do think we will continue to see signs of a recovery. In the meantime, like you, I am thankful for my family and friends, who are always there in times of crisis. This year, more than ever, I wish them, and you, a very

HAPPY HOLIDAYS!

Weekly Twin Cities Real Estate Market Activity Report

Gather 'Round the Festivus Pole!

The Twin Cities housing market has entered its annual winter holiday pause. New listings have been minimal, yet total inventory of homes for sale remains at record levels and the number of sellers continues to far outweigh the number of buyers. Conservative lending standards and decreased consumer confidence seem to be keeping home buyers away despite low mortgage rates, motivated sellers, improved housing affordability and great housing stock.

Over the last three months, newly signed purchase agreements have declined by 20.0 percent from the same period in 2006 and 34.3 percent since 2005. Meanwhile, new listings have declined by only 1.8 percent. The number of homes for sale has dropped 5,000 units in the last 12 weeks but remains 12.9 percent higher than this time last year.

The forecast calls for improved buyer activity, but it may take a year or two of gradual increases before comparisons to today's buying market are quantifiable.

CLICK HERE for the entire report.

December Market Update

Visions of Sugar Plums Dance in Buyer's Heads...

Activity in real estate tends to remain slower during the busy holiday season as families focus on spending time together and plans are made for travel and holiday traditions. In preparation for the upcoming year, many people will use this time to begin thinking about home remodels, updates and getting their home ready for sale. Homes priced from $250,000 - $500,000 are currently moving better than any other price points in the market, and properties priced in the upper bracket continue to remain on the market longer. However, it’s important to note that homes continue to sell when they’re staged well and priced below the competing inventory.

We expect inventory levels to continue correcting to the number of buyers available in 2008 and we anticipate an ongoing slow change in the market throughout next year and into 2009. While credit standards are tighter, the market will continue to present great opportunities for buyers.

Always remember that real estate is local. Just like we don’t access national weather forecasts when we’re dressing for the day, we shouldn’t rely on national real estate reports to give us accurate information about our local markets. While national trends are important for economists to assess the economy, they are not all that useful in determining the metrics of a local market. A REALTOR® will always take into consideration many things when determining the value of a home, including the local competing inventory, location and nearby amenities.


Here's a few more interesting bits of info:

• According to the National Association of REALTORs® (NAR), 2007 is on target to be the fifth best year on record for existing home sales (units).
  

• Our market’s average home selling price is $266,000, down slightly (-.6 percent) compared to last year. We expect more price adjustments of 2 – 3 percent in 2008.

• Builders are pricing inventory at or below existing residential, which is anywhere between a 10 – 20 percent drop in pricing. New construction inventory has declined nearly 20 percent this year. This is good news for thinning out the number of homes for sale, which, combined with the average selling price coming down, indicates that we’re poised for a slow, steady market comeback.
  

• Homes priced from $250,000 - $500,000 are currently moving better than any other price points in the market.

• Upper-bracket properties continue to remain on the market longer.

Improving Affordability in Minneapolis Real Estate?

A bunch of new info regarding the November Housing Stats was released by MAAR today. Here's the highlights:

With home prices in seasonal decline and mortgage rates dropping, the buying environment is as good as it’s been since February 2005, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the RegionalMultiple Listing Service of Minnesota, Inc.

The MAAR Housing Affordability Index (HAI) increased to 141, the healthiest December HAI figure since 2003. The median sales price in November of $216,500 was 5.1 percent behind November of 2006, the largest such year-over-year decline in 2007. Since decreased affordability has been one of the leading causes of the current market malaise, these improvements bode well for the future.

Despite abundant inventory, motivated sellers and improving affordability, home buyers remain inactive. Newly signed purchase agreements (pending sales) posted 2,615 units in November, 21.0 percent behind November 2006. Similarly, closed sales declined by 19.3 percent for the same time period comparison.

The number of homes for sale has fallen by 4,000 units in the last two months. Despite the seasonal drop, inventory set a new November month-end record with 30,126 homes for sale and 13.44 homes for each buyer expected during the upcoming month.

• Declining home prices are often viewed as a negative phenomenon. In reality, lower prices bring attractive buying opportunities to the market and lay the foundation for a bright future.

• Right now, buyers are like awkward kids at a junior high dance—anxious and waiting for their favorite song. Meanwhile, the kids who recognize a good thing are already on the floor having fun.

• A revival in FHA loans, which had lost substantial market share to the risky subprime market, will provide funding for low-to-moderate income households at attractive rates.

• All of the conditions in our market are ideal for buying a home. Buyers who are waiting on the sidelines should seriously consider acting now. Otherwise, they might look back at this as a time of missed opportunity.

• Positive changes are still taking place. Affordability is improving, the lending environment is returning to solid fundamentals, interest rates are still historically low, and buyers now have a golden opportunity to purchase a home.

• Real estate is a cyclical business and fall is historically a slower time in our housing market.

• Sellers face a challenging market right now. But if you’re a first-time home buyer or a second-home buyer with no home to sell of your own, the market has been with opportunities.

• Downward pressure on home prices will continue into early next year as record inventory competes for a declining buyer pool.

• A quick and easy rebound in sales is not in the cards—our market’s recovery will be slow to start and gradual in its effect.

Weekly Twin Cities Real Estate Market Activity Report

I'll take what's behind curtain number 3, Monte!

Sellers Continue to Say: "Let's Make a Deal!"

Home sales perked up for the week ending December 1, as buyers returned following their annual football-and-turkey Thanksgiving holiday. While the number of newly signed purchase agreements (pending sales) grew to 533, it was still behind the same week last year by 10.6 percent. The total inventory of homes for sale continues its seasonal drop, with 4,000 fewer units on the market now compared to eight weeks ago.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for several key metrics:

• Average Days on Market Until Sale increased slightly to 148, a growth of 12.4 percent from one year ago. This figure should continue to grow through December before dropping in the first part of 2008 as more buyers return to the market.
• The Percent of Original List Price Received at Sale dipped to 92.4 percent, indicating that seller willingness to negotiate continues to grow.
• Mortgage Rates for the Twin Cities region fell slightly again to 6.2, which is having dramatic and positive effects on affordability.
• The Housing Affordability Index (HAI) increased to 141 due to falling mortgage rates and home prices. This is the highest HAI mark since February 2005 and, if sustained, bodes well for the long-term health of our market.
• Months Supply of Inventory decreased to 9.3 months, as seasonal declines in the number of homes for sale temporarily restrict inventory choice during the holiday season.

CLICK HERE for the complete report from MAAR.

Minneapolis Trends 3rd Quarter Report

What's Happening Minneapolis?

For those curious about what the "pulse" of the city is during this housing downturn, a recent e-mail I got from the city, shows some very interesting developments. To wit:

Although the number of employed residents rose, the unemployment rate rose from 4.2% to 4.6%.

What industry has the highest average weekly wage?

Finance and Insurance at $2,803/week.

The lowest?

Accommodation and Food Trade at $350/week.

It was no surprise that the number of new construction residential permits decline sharply.

Housing sales were 13% slower than a year ago but prices were stable at $223,000.

Foreclosures and Boarded up buildings double in the last year but remain a small percentage of the over-all housing stock.

Nothing earth shattering but some good information nonetheless.

Here's a cool chart of Current Minneapolis Projects in Development.

Here's a link to the complete Minneapolis Trends Report.

Mortgage Rate Freeze?

This is potentially very big news for anyone who signed onto a sub-prime loan in the past two years. Apparently the Bush Administration is brokering a 5 year freeze on the resets-the time when these loans are set to adjust.

Here's a part of the story:

The Bush administration has hammered out an agreement to freeze interest rates for certain subprime mortgages for five years to combat a soaring tide of foreclosures, congressional aides said Wednesday.

The aides, who spoke on condition of anonymity because the details have not yet been released, said the five-year moratorium represented a compromise between desires by banking regulators for a longer time frame of up to seven years and mortgage industry arguments that the freeze should last only one or two years.

Another person familiar with the matter said the rate-freeze plan would apply to borrowers with loans made at the start of 2005 through July 30 of this year with rates that are scheduled to rise between Jan. 1, 2008, and July 31, 2010.

I don't think I am being too cynical when I say I will believe it when I see it. That is a HUGE pile of money that Wall Street will be asked to leave on the table and I can't believe they would accept this willingly.

Stay tuned...

Attack of the Killer Monster Houses!

Edina puts the Kabosh on the Kabooming of Houses

This article in the Strib is one of a series on this topic (they do sort of like to beat some subjects to pulp, see the mortgage/real estate "crisis" for more examples.)

I'm not sure how I feel about the idea of stopping this kind of development. As a good neighbor and architectural "purist" I am often put off by the look of some homes, usually new homes, are built in older neighborhoods. They seem to be out of place and out if scale.

On the other hand, there was a new house that is on my block that, although it is quite large, it is in a style that really seems to fit with the 1920's dominated styles on my street. It really looks like a lovely home and I might add, the place that was demoed to make way for it really needed to go. It was a tiny rambler, set way back on the lot like you see from time to time, that had been vacant for some time.

So there's the debate. Old vs. New. Tradition vs. Progress. It's an age-old dilemma and I think where you stand on it has more to do with your personal tastes than anything else. From a real estate standpoint, new construction is almost always a surefire way to raise the surrounding property values. I guess if your view of the lake or park is suddenly blocked by your new giant neighbor, that would be unfair, I know I would be angry...

So...perhaps rather than a moratorium the Cities should set up a committee of residents who could looks specifically at these projects on a case by case basis. I know there are already zoning committees but they are usually swamped with commercial issues. I don't know. Adding more hoops for people to jump through may be a bad idea.

Issues like this are sometimes easier to say: "Go ahead and build that....just not on my block!!!"

UPDATE: Edina remains home to "McMansions"

Weekly Twin Cities Real Estate Market Activity Report

The Song Remains the Same

As expected, we are continuing to see a decline in home sales in the Twin Cities housing market. For the week ending November 24, there were 329 newly signed purchase agreements (pending sales), a decline of 32.2 percent from the same week last year. The severity of this sudden decline is abnormal enough to imply a statistical fluke caused by a small sample size and the vagaries of a major holiday week. How the market performs next week will provide a good indicator of its true direction.

This week's edition of the MAAR Weekly Market Activity Report features an updated Supply-Demand Ratio (SDR) for 2007. The figure increased to 13.44, which means that there are 13.44 homes on the market for every buyer in the month of December, an increase of 34.1 percent from last December. The SDR rises each year in the final months due to the dramatic decline in holiday season home buyers.


Click here for this week's full report.

Sandless Wood Floor Refinishing?

^^^^^^^^^^^^^^^^^^^BEFORE^^^^^^^^^^^^^^^^^^^^^^^^^^
***********************AFTER!*********************************

I sell a lot of homes with hardwood floors. I have hardwood floors in my hose and I have been wondering when I can take my wife and child and 3 dogs and 1 cat on a cruise so that we can be out of the house for a week and I can pay someone a MILLION dollars to get my floors redone.

Yep. We're talking pure Fantasy Island.

But wait! I open my e-mail spam today and I read this:

Mr. Sandless™ makes refinishing wood floors quick, affordable and painless! There is no mess to clean up, no odors, and service is complete in just hours. We are always less expensive than sanding, and everything we use is kid and pet safe. There is no better way for your wood floor refinishing needs!

I checked out the WEBSITE and it looks legit! Could this be the answer to my hard wood dreams? I am curious, gentle readers, if any of you have used this service. If so, please post your comments here. If not...perhaps I will be the Guinea pig and check these guys out...

TODAY'S REDUCTION is TOMORROW'S GAIN

I realize that the plural of "anecdotal" is not "data" but here's what I have seen in the market lately.

A house that sold Fall of 2006 now listed for $214,000.

A house that sold for $230,000 in 2004 now listed for $114,000.

A house that sold for $235,000 in 2005 now listed for $199,000.

It goes ON and ON and ON.

If you are a renter or a first time buyer or an investor I urge you to seriously consider some of the opportunities that are out there. I have never seen prices like this in my career and something tells me this can't last. Once the inventory gets thinned out prices will stabilize.

And the news is not bad for all Sellers. I still see properties that are competitively priced selling in MULTIPLE OFFERS. But if your equity is tapped out it's not a great time to be on the market.

And for Buyers consider this - TODAY'S REDUCTION is TOMORROW'S GAIN.

Whether or not you reap this windfall is entirely up to you...

Weekly Twin Cities Real Estate Market Activity Report

Slow Train Comin'

Here's the Latest from MAAR:

Despite recent favorable drops in mortgage rates and improvement in housing affordability, buyer activity remains slow in the Twin Cities housing market. For the week ending November 17, there were 545 new purchase agreements signed, down 17.7 percent from the same week in 2006. As we enter the holiday season, sellers continue their annual pause, as the number of new listings on the market and the total number of homes for sale have been in a general seasonal decline for more than eight weeks.

Click HERE for the full report.

Local Mortgage Brokers Drop by Two-Thirds!

Of all the sad and scary stats this one really defined what is happening in the local housing industry:

Minnesota Mortgage Association President Tim Bendel said his industry has taken a hit, too. Brokerage license applications came up for regular review at the end of last month, Bendel said, and early indications are the number of licenses dropped from 4,000 to about 1,400.

Wow. That is staggering. It seems the Day of Reckoning is here for the Realtor as well. Dues to the tune of about $400 bucks are due in the beginning of December and are required for anyone who wants to keep their license. I remember last year at this time the Executive Director of the Minnesota Association of Realtors was actively campaigning members NOT to renew in an effort to thin the herd. I have heard very little of that this year, it seems the market is doing that all on its own...

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

The rapid flattening in fourth-quarter sales can be viewed as a positive sign, as compared to the third quarter, when buyer activity was in rapid decline.

Over the last two weeks, newly signed purchase agreements (pending sales) are behind the same period in 2006 by 15.2 percent, as compared to the last three months when sales dropped by 21.5 percent. Recent listing activity has declined by 4.6 percent, as compared to last year. The total inventory of homes for sale is dropping as we near the holiday season.

CLICK HERE to see this week's stats.

November Market Update

While we experienced exceptional activity in our local real estate markets from about 2001 - 2005, it’s important to remember that real estate is a cyclical business. Historically, the Midwest has always been slower than coastal markets, remaining steady and somewhat predictable; we tend not to undergo some of the extreme highs and lows that other markets do. And, similar to its cyclical nature, real estate is seasonal with activity slowing in autumn and around the holidays.

Builders and buyers continue to exercise caution, which has resulted in inventory growing at a slower pace than the record levels of 2006. In fact, while it’s still at historic highs, inventory is only 10 percent above this same time last year. This is good news for thinning out the number of homes for sale, which, combined with the average selling price coming down, indicates that we’re poised for a slow, steady market comeback. To help put the current market into perspective, we should recognize that according to the National Association of REALTORs® (NAR), 2007 will be the fifth highest year on record for existing homes sales!

We see motivated buyers and sellers, but at the same time, we’re now experiencing a return to more traditional, stricter lending practices that were in effect before the boom. According to NAR, conditions in the mortgage market are improving overall for consumers, which will help to release some pent up demand in early 2008. And, while tighter credit standards are believed to be a factor in the recent decline in home sales, the decline in home prices and interest rates have also helped keep housing affordable. While some sellers may wish for a higher sale price, it’s important to remember that most sellers are also buyers – and this market offers great buyer opportunities, whether it’s your first home, next home, vacation home, or an investment property.

Another Negative Strib Article about Real Estate

Sometimes I wonder why I subscribe to this paper! Seriously they seem to get off on mentioning every possible negative twist the market takes. So here's the article for your perusal but I did want to highlight the interesting ray of hope it contains:

Sales of existing homes last month were down 17.7 percent from October 2006, but more purchase agreements were signed than in September, perhaps reason for optimism.

Hooray!

Weekly Twin Cities Real Estate Market Activity Report

Here's the Latest from MAAR:

As mortgage rates decline and home sellers appear increasingly willing to accept moderate offers, home sales have picked up slightly in recent weeks. Newly signed purchase agreements (pending sales) for the week ending November 3 were behind last year at this time by only 13.6 percent. New listings on the market also increased, up 7.3 percent for the same time period comparison. This week's edition of MAAR's Weekly Market Activity Report features updated figures for several key metrics:

Days on Market Until Sale in October was 142 days, an increase of 20.3 percent from one year ago.
Percent of Original List Price Received at Sale declined further to 93.1 percent and should continue to fall until early 2008.
The November Housing Affordability Index increased dramatically to 138 due to declines in mortgage rates and home prices, an important trend for the long-term health and accessibility of our market.
Months Supply of Inventory declined slightly to 9.5 months due to the annual drop in the number of homes for sale that takes place in November.

We have also updated figures for The 100, our popular city-by-city market snapshots for more than 100 Twin Cities communities. view the latest figures for The 100

Tricks of the Trade Part 1

Minneapolis Truth in Housing

All properties sold in Minneapolis, as well as several other communities in the metro, require a Truth in Sale of Housing Inspection Report.

In Minneapolis it works like this:

The Truth-in-Housing ordinance is meant to provide accurate information on the condition of property for sale and to help Minneapolis keep up the quality of housing available in the city.

Types of residence

Single-family houses
Duplexes
Townhouses
First-time condo conversions

Types of sales

Sale by owner
Sale by real estate agent
Real estate agent-assisted sale
Contract-for-deed
Other title transfer

The Truth in Housing Ordinance requires:

1. An evaluation to say what condition a house is in.

After February 26, 2007, a copy of the evaluation, the Certificate of Approval (if issued), the list of violations, can be found on the City of Minneapolis website.

2. Repairs must be made when a house is sold. (Learn more about required repairs.)

A licensed evaluator must complete a Truth in Housing evaluation and provide a disclosure report before any single-family house, duplex, townhouse, or first-time condo conversion can be shown to prospective buyers.

The Truth in Housing Evaluation, also known as the disclosure report, must be displayed on the property so potential buyers can look at it.

A re-inspection must be done after any required repairs have been completed. This is separate from the initial evaluation.

If you are ever curious about a specific property you see listed check out this Minneapolis Property Info page.

Not only can you see and print the latest Truth in Housing Inspection but you can also see a history of other permits that were pulled on the property.

Information is power! Your agent should always be getting you as much info as possible about the properties you are interested in and there are many resources available. Knowledge is power!

Could Mortgage Rates Drop to 5 Percent?

Plus- Every Home to Come with Five Pound Box of Money!!!

OK... so this sounds too good to be true but someone, and not just someone (Bill Gross, chief investment officer of Pacific Investment Management Co - the Worlds LARGEST Bond Fund) said this on CNBC:

"The Federal Reserve cannot afford to let U.S. housing prices fall and will have to cut interest rates aggressively to prevent it from happening."

A Fed cannot afford to let homes go down by 10 to 15 percent like we saw in Japan. We've only begun to see the pain from the standpoint of the home owner in terms of those monthly payments. Defaults and delinquencies will increase as we extend throughout 2007 and then into 2008."

Gross expects the Fed to cut the federal funds short-term rate to 3.5 percent, which implies that the 30-year mortgage rates will come down to 5 percent to 5.5 percent.

So...will THAT finally be the straw that stirs the Buyer's drink?

Stay tuned...

Great Resources for Fixer Uppers!

Communities Offer Grants & Loans to Fix Up Homes!

There are some TREMENDOUS opportunities in the current market. Not only are there foreclosures (which still are only a very small percentage of available homes -don't believe all the media hype!) but a number of other homes priced very low. A couple of years ago it seemed impossible to find anything under $200,000 and if you did it sold quickly in competitive offers or was beyond saving (needed too many repairs).

Now I am seeing single family homes around $150,000 - and below- that with some minor repairs and hard work can be made into gems. You have to look for GOOD BONES when looking at these kind of properties.

What are GOOD BONES?

1. Solid Mechanicals
Are the furnace, plumbing, electrical in decent shape? Look for copper pipes and make sure check to see if the electrical has been updated to 100 Amp circuits rather than 60 Amp fuses.

2. Demand Features
Is there hardwood under the carpet? Are there other features - built in buffet, breakfast nook, fireplace, that add intrinsic charm and value?

3. How's the Roof?
Replacing a roof can be expensive. The good news is that most will last 20 years. Looking at the roof you can usually tell if it looks old (but always hire an inspector) and you can check the City's records to see when the last permit was pulled to do the roof to determine the age.

4. What about Water Troubles?
If you detect a lot of water in the basement, which can often be addressed through landscaping, it can sometimes mean foundation or mold issues. Give it the "sniff test" and proceed with caution if things seem musty. Like my Inspector friend has told me several times: "If it's wet, there's mold. It's all just a matter of how much."


5. Truth in Housing Report
In Minneapolis, and other cities, a Truth in Housing Report is REQUIRED for all properties sold. Often times with estates and foreclosures the Seller requires the Buyer to assume these. Always check the cities' website -CLICK HERE FOR MINNEAPOLIS- for access to the Truth in Housing Report.


WHERE TO FIND HELP

Here is an excellent resource guide published by the city that lists all of the available loans for fixing up your home as well as programs to help pay the costs of city required repairs.

You can download it here: Housing Programs Resource Guide

Here are some other excellent resources for Buyers:

Association of Community Organizations for Reform Now Housing (ACORN)
-First time buyer classes, help with lending.

Community Action Partnership of Suburban Hennepin
-Programs include mortgage foreclosure prevention and rehab advice.

Minnesota Housing Finance Agency
-Housing assistance programs for low and moderate income residents including down payment assistance.

Community Neighborhood Housing Services
-A resource for St. Paul

Please contact me with any questions and Happy Hunting!

Housing Supply Outlook

This Report bears spotlighting:

New construction listing inventory continues to drop as builders cut back on new projects and focus on selling existing units. The number of new constructionunits on the market has fallen by 17.5 percent when compared to this time last year and are being sold at 7.4 percent less per square foot.

Condominuims face a tough road ahead. Their sales have dropped the most of any property type, keeping their supply levels high despite a dropoff in new listings.

The middle-upper price ranges found between $250,000 and $500,000 are more stable than others, seeing far less growth in inventory than other price ranges and a relatively smaller drop in buyer demand.

Massive inventory growth is taking place in the lowest price ranges, possibly due to the role of subprime foreclosures.

CLICK HERE for the complete report.

Weekly Twin Cities Real Estate Market Activity Report

Here's the Latest from MAAR:

With mortgage rates falling and a plentiful harvest of homes to choose from for area buyers, the pace of declining home sales in the Twin Cities has slowed slightly in recent weeks. Newly signed purchase agreements (pending sales) were behind this time last year by 16.7 percent for the week ending October 27, an improvement from the large declines seen in late September. While the inventory of homes for sale is still at a record high, it is beginning its annual autumnal drop and should continue to wane through the rest of 2007.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for Mortgage Rates and Supply-Demand Ratio. Rates have fallen dramatically in the last two months, teaming up with home price declines to create important improvements in affordability that will benefit our market down the road. The Supply-Demand Ratio of 11.22 means there are 11.22 homes on the market for every buyer.

For a detailed look at the way our changing market is affecting buyers and sellers in various submarkets affected by price range, property type and construction status, take a look at our Housing Supply Outlook. Dig deeper.

Mortgage Rates Continue to DROP!

The buzz today is all about the latest Fed Cut to the rates:

Mortgage rates drop to five-month low

Mortgage rates hit lowest levels since May

Fed Cuts Rates a Quarter-point

So...while this no doubt is good news it will be interesting to see if the Strib manages to spins some GLOOM into this story. It probably won't be very hard - some of the stories are already blaming the poor housing market for the rate decline. Interesting dichotomy at work there!

In any event, those looking to BUY are finding it a bit eassier today than yesterday and that can do nothing but help break the ice!

Local Link Round Up

Lost of Local Real Estate Stories in the media this past weekend and...none of it good...imagine that!

Here's a sampling:

Will Congress pass relief for delinquent homeowners?

Wave of foreclosures hits renters

Struggling to escape the subprime swamp

Vacant homes rise to record


At least someone seems to be benefiting from all of this...the newspapers!

The good news is that usually by the time the media is at such a feeding frenzy they worst is over. I think we have hit bottom.

The future is BRIGHT!

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

As the fall season progresses and we move toward winter, the number of homes for sale in the Twin Cities is in the midst of its annual decline. Total inventory in the 13-county region has fallen by almost 2,000 units in the last two months and should continue to drop through the remainder of 2007. Despite the seasonal dip, home sellers who choose to leave their homes on the market will still face a tough market, as the number of buyers is relatively low. Newly signed purchase agreements (pending sales) for the week ending October 20 were behind the same week last year by 18.1 percent.

For an easy-to-use and consumer-friendly look at the local housing market, take a look at our Monthly Indicators.

Foreclosures - Too Good to be True?

There's been A LOT of attention by the media lately regarding the mounting numbers of foreclosed properties that are available on the market. Recently there was an auction held were something like 150 metro area homes were auctioned off. Consequently I have been getting lots of calls from my clients asking if these deals they are reading about are too good to be true.

My short answer is - yes.

If you look closely at some of the deals mentioned recently in the Strib you will see that while it's true some properties sold at auction for perhaps as much as 50% less then they sold for just a few years ago there are factors that were really glossed over.

1. Condition
Most foreclosure properties are a mess. It takes a keen eye to separate the simple problems that can be fixed by a lay-person and the complex ones that might require lots and lots of money and time to fix.

2. Location
Most of the Super Bargains mentioned in the story are in locations that have seen rough times. Sometimes that means a higher crime rate and potential property damage. So not only did you just buy yourself a bunch of repair headaches you also might have found yourself in a location that will make it very difficult to recoup the money you spent fixing the place up.

3.Over-Priced Homes
People may want to ask why these "deals" look so good now and the answer is during the Boom there were quite a few properties that sold for way above market value. Then -BAM- the market slows down and the real market price re-emerges. Often times people believe that what goes down must go back up again -and fast - that the price will jump back up again in a few short months.

Unfortunately it doesn't work that way. Not usually. The steep rise in prices we saw from the late 1990's thru the early 2000's didn't happen over night. It takes time. Patience, Grasshopper. That is part of the reason we find ourselves in this current state: unrealistic seller expectations.

Will prices go up? Yes. They always have and they always will OVER TIME. You need to have that essential ingredient. Real Estate is NOT a get rich quick scheme.

How can you increase your odds?

Pay close attention to LOCATION and CONDITION.

Especially LOCATION, LOCATION, LOCATION! It's a cliche' for a reason. It matters! You can have the greatest house in the world but if it it in a tough location - Good Luck! And in a market with so much inventory (read: Competition) you have to be in absolute Tip Top Condition. The cheap fixes no longer work. Buyer's can sniff out quality finishing. Shabby, mismatched kitchen cupboards? Nope. Worn Carpet? Get rid of it. Outdated appliances? That's a No-No.

If I sound harsh I don't mean to be but just because I'm a Realtor doesn't mean I can't be Real! Contact me for more tips on how you can afford the pitfalls and have success in this changing and challenging market.

Featured Listing - Nokomis 2 Story Colonial!

NEW FEATURE!

LISTING OF THE WEEK

Lost in all of the GLOOM and DOOM reporting of the local housing market is the SIMPLE FACT that there some GREAT DEALS for Buyers in the current market.

In an effort to flip the script and get some positivity I have decided to start a new feature here where I put the spotlight on a different listing each week. Your comments on price and condition,as always, are welcome!

4813 15th Ave S

Open this Sunday 1-3

CLICK HERE FOR MORE INFO!

CLICK HERE FOR 360 Tour!

MLS REMARKS: Beautiful 2-sty traditional Colonial w/excellent curb appeal. Demand area 1/2 blk off M'haha Pkwy. Over $35K in new low-maint prof landscaping! Hdwd flrs, charming Oak built-ins, piano windows, updtd kit, 3 BR on 1 lvl, 3-season PO & new paver patio. LISTING INFORMATION (Last Updated 10/23/2007 12:47 PM):

County: Hennepin		Foundation Size: 616 Sq. Ft.
Number Bedrooms: 3		Subdivision: Boulevard Terrace
Baths (Full & Partial): 2		Year Built: 1926
Approx. Sq. Ft.: 1320		Exterior Type: Metal, Vinyl
Garage		Property Style: 2 Story
Property Type: Single Family		Stories: 2
Lot Size: 0.11 Acres

SCHOOL INFORMATION:

School District: MINNEAPOLIS - 1

ADDITIONAL INFORMATION:

Above Ground Square Feet: 1320 Sq. Ft.		Development Name: Boulevard Terrace
Finished Area: 1320 Sq. Ft.		Sewer Type: City Sewer - Connected
Water Type: City Water - Connected

INTERIOR FEATURES:

Appliances: Dishwasher, Disposal, Dryer, Exhaust Fan/Hood, Microwave, Range, Refrigerator, Washer		Cooling Type: Window Air Conditioning
Floor Styles: Hardwood, Tile		Heating Delivery: Other
Heating Source: Gas Heat

Basement Description: Full Number of Fireplaces: 1 Fireplace Description: Living Room, Wood Burning Handicap Features Description: None Additional Interior Features: Kitchen Window, Local Area Network, Multiple Phone Lines, Natural Woodwork, Washer/Dryer Hookup, 3 BR on One Level

ROOM INFORMATION:

Bedroom, Upper	14x10 Feet
Bedroom, Upper	12x9 Feet
Bedroom, Upper	18x10 Feet
Dining Room, Main	12x11 Feet
Kitchen, Main	11x11 Feet
Living Room, Main	21x11 Feet
Three Season Porch, Main	17x12 Feet

Number of Full Baths: 1 Number of 3/4 Baths: 1 ADDITIONAL ROOM INFORMATION: Dining Description: Eat In Kitchen, Separate/Formal Dining Room Bath Description: 3/4 Basement, Upper Level Bath

EXTERIOR FEATURES:

Garage Spaces: 2		Parking Description: Detached Garage
Patio		Roof Type: Asphalt

LOT FEATURES:

Lot Size: 0.11 Acres

Lot Dimensions: 122x40

Fence Description: Wood
Other Lot Features: Road Frontage- City, Curbs, Paved Streets, Sidewalks. City Bus (w/in 6 blks)

COMMUNITY AMENITIES:

Amenities: Bus Line

FINANCIAL CONSIDERATIONS:

Assessments: $0		Homestead
Price: $349,900		Tax Amount: $4,086
Tax Year: 2007		Tax/Property ID: H1402824130048
Terms: Cash, Conventional, DVA, FHA