Chilly Minneapolis is Hot With Young Professionals!

MNSpeak Rejected This So I Will Post it Here!

Chilly Minneapolis is Hot
With Young Professionals

It's always funny to see how outsiders view your fair city. This article from the Real Estate Journal is about how Minneapolis has become a HOT SPOT for 20 something professionals. The article states that "more than 11,000 adults age 20-29 moved to the Twin Cities (Minneapolis-St. Paul) from out of the state in 2005, almost double from 6,000 in 2004 according to the U.S. Census Bureau's 2005 American Community Survey. Last year's growth was slightly less frantic: 7,489 new residents moved to the Twin Cities from out of state..."

Why are the kids moving here? Apparently the fact that we talk funny, close up shop early and are pretty much a boring town are the driving forces! To wit:

"It's such a get-out-there and do something culture," says Ms. Appleton. She says that while Minneapolis isn't a "go out every night" atmosphere, she has taken advantage of cuisine, art and volunteer opportunities.

Yes. Come for the Frozen Tundra, stay for the Salvation Army!

After a year in Minneapolis, Mr. Klein says the city is still feels it's like six blocks plucked out of Chicago, but that he has adapted to the smaller circles of society. "It's not overwhelming and I like that," he says.

Reminds of the Wee Britain gag on "Arrested Development."

"(These people) are part of a recent influx of young adults in this chilly city more known for the Mall of America and funny accents than its trendy arts scene and nightlife.

Well, we like it here! Yeah sure. You bet'cha! Also, the article discusses the torture that newcomers must endure:

Newcomers also must confront the social hurdles of being a "transplant" -- a term widely used in Minnesota to describe outsiders. Adrienne LaPointe, a 29-year-old originally from Michigan, says she was warned that many Minnesotans spend their entire lives in the state, gleaning their social circles from as early as middle and high school.

"There are two separate social societies here: people who grew up in Minnesota and everybody else," she says. Undeterred, Ms. LaPointe joined more than 500 people who are part of a social-networking group started in the 1990s for non-natives called I'm Not From Here.

I was thinking of starting a support group called: You Ain't From Around These Parts, Are You?

Weekly Twin Cities Real Estate Market Activity Report

Here's this week's MAAR report:

This week's edition of the MAAR Weekly Market Activity Report features an exciting new format. We are now providing a much more readable set of graphs for new listings, pending sales and active listing inventory designed to make it easier to note important trends in the market. Additionally, our Days on Market measurement has been switched to utilize the more accurate cumulative days on market measurement, which takes into account previous listing contracts over the past twelve months. The Days on Market Until Sale for August 2007 was 135, up 25.0 percent from August of 2006.

And don't forget, our new and improved Housing Supply Outlook is now found separate from the Weekly Market Activity Report. The new format is chock-full of powerful information that tells the important stories found where price range, property type and construction status meet to create dynamic and unique submarkets. Click here for the September 2007 Housing Supply Outlook.

Housing Supply Outlook

MAAR Creates Awesome Charts!

The market may be kicking our collective behinds but MAAR continues to kick out awesome research tools.

Here is there most recent - the Housing Supply Outlook.

The stats show some interesting developments including:

Builders have dramatically decreased production in response to changing
market conditions. Total new construction inventory has fallen by 15.3 percent
when compared to this time last year.

The average price per square foot of all new construction units is down 7.9
percent, confirming that builders are reducing prices to sell their excess
inventory.

Condominuims have the highest months' supply of any property type. This
growing imbalance is almost entirely due to a large dropoff in sales of new
construction condominiums, down 37.4 percent from this time last year.
Single-family detached homes are holding their value better than other property
types. Their current supply in months is the lowest, their sales rate has declined
the least, and their average sales price is down only 0.7 percent from this time
last year.

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

Champagne & Cookies!

From CNN/Money:

Fed Cuts Rates in Effort to Boost Slumping Housing Market

The Federal Reserve's aggressive half-point cut Tuesday could provide support for a slumping housing market.

A quarter-point drop had already been priced into the market for Treasury bills and other instruments tied to mortgage rates, according to Richard DeKaser, chief economist for National City Corp. The deeper cut means mortgage rates may have a little more room to fall, giving support to prices.

The Fed Funds rate affects a range of consumer loans, including home equity and mortgages. Lower mortgage rates would add to the number of home buyers able to afford to make purchases, increasing demand for properties and buoying home prices. Buyers generally care less about the actual purchase price than they do about the size of their payments. If rates drop, so will monthly debt obligations.

Interest rates for conforming loans - those of no more than $417,000 - are already reasonably low, averaging 6.31 percent for a 30-year fixed rate loan.

But an important class of loans that might benefit from the big cut: the high-ticket home mortgages known as non-conforming or jumbo loans. These loans have no guaranteed secondary market because they exceed the $417,000 cap and Freddie Mac and Fannie Mae will not buy them.

With investors wary about any loan perceived as carrying the least bit of risk, jumbo rates have risen in recent months. They carry rates about a full point higher than conforming loans. Jumbos are especially important in high-priced housing markets such as New York, California, Washington D.C. and Boston.

Jumbo rates may come down if the cut makes consumers more confident, according to Mark Zandi, chief economist for Moody's Economy.com.

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

Twin Cities consumers didn't do much laboring to purchase a home over Labor Day weekend, as sales activity for the week ending September 8 was down significantly. There were only 500 new purchase agreements signed in the metropolitan area during the week, the lowest number since the beginning of 2007. New listings increased slightly from the previous week, likely buoyed by post-holiday relistings.

This edition of the MAAR Weekly Market Activity Report (WMAR) features a new Months Supply of Inventory figure of 9.9 months, which means it will take 9.9 months for the inventory for sale at the beginning of September to sell through completely. This measurement takes the place of our Housing Supply Outlook, which has been expanded, enhanced and given its own spotlight separate from the WMAR. We are now able to provide detailed measurements of supply and demand by property type, construction status and price range, as well as where these important variables intersect.

Click here to view the September 2007 edition of our new and improved Housing Supply Outlook.

Click the chart or click here for this week's full report.

Mortgage Problems Dampen Home Sales

Lawrence Yun of the National Association of Realtors Assesses the Current Lending Situation

Tighter credit for home mortgages will measurably soften home sales in the short term and postpone an expected recovery for existing-home sales until 2008, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS®.

Lawrence Yun, NAR senior economist, says unusual disruptions in the mortgage market are dampening the outlook for home sales, notably for August and September.

“There’s been an unusual hit to home sales, starting in March when subprime problems emerged and more recently when problems spread to jumbo loans, with many potential buyers on the sidelines,” Yun says. “However, the jumbo loan market is now beginning to settle, and FHA-insured loans are helping to fill the subprime vacuum. The volume of existing-home sales this year will be better than 2002, which was the second year of the housing boom.”

Housing Outlook

Existing-home sales are projected at 5.92 million this year and then expected to rise to 6.27 million in 2008, compared with 6.48 million in 2006. New-home sales should total 801,000 in 2007 and 741,000 next year, below the 1.05 million in 2006.

“A sharp production pullback by homebuilders deep into 2008 is a healthy trend that will help trim down housing inventory,” Yun says. Housing starts, including multifamily units, are expected to total 1.37 million this year and 1.26 million in 2008, compared with 1.8 million in 2006.

“The mortgage markets will calm further in the months ahead, but it’s important to underscore the fact that conventional loans — the vast majority of available financing — are available to creditworthy borrowers,” Yun says. “Patient buyers in most areas who do their homework will recognize that housing remains a good long-term investment.”

Existing-home prices are likely to slip 1.7 percent to a median of $218,200 this year before rising 2.2 percent in 2008 to $223,000. The median new-home price is estimated to drop 2.2 percent to $241,100 in 2007, and then increase 1.7 percent next year to $245,100.

Here are some other economic factors that will likely influence the housing market:

• The 30-year fixed-rate mortgage is projected to average 6.4 percent for the balance of the year and then edge up to the 6.5 percent range in 2008. “We expect the Fed to cut rates two times before the end of the year, which will lower interest rates for prime borrowers and FHA-insured loans,” Yun says. “FHA modernization could buffer the fallout of subprime loans, which would raise our sales forecast in the future.”

• Growth in the U.S. gross domestic product is forecast at 2 percent in 2007, below the 2.9 percent growth rate last year; GDP will probably grow 2.7 percent in 2008.

• The unemployment rate should average 4.6 percent for 2007, unchanged from last year.

• Inflation, as measured by the Consumer Price Index, is estimated to be 2.8 percent in 2007, compared with 3.2 percent last year. Inflation-adjusted disposable personal income is likely to increase 3.6 percent this year, up from 3.1 percent in 2006.

"Projections on the future of the housing market are like belly buttons"

Today's cover story spells out more doom and gloom for our local Real Estate market. While you simply can't deny that things have slowed, it always seems these articles come out just as the market changes. In the past it took a couple of years of high velocity sales before the media started to refer to it as a "Housing Boom" and eventually -in some circles- a "Housing Bubble."

This latest slowdown has been building for the past two years, it didn't just happen over night as the sudden prominent reporting of this issue - Front Page, Above the Fold, seems to indicate.
I think this is one reason, of many, why Buyer's are so confused about the current market conditions. Anecdotally I have seen a marked increase in the showing activity at all of my listings this week. Truth be told, in certain micro-markets where demand is high, you would never even know there was any kind of a slow down. Location is not just a cliche', it is the operating principle that everyone should base their purchases on!

Anyway here's a link to the Strib article:

Area home sales fall to lowest since '94

And here is the response issued by MAAR (Minneapolis Area Association of Realtors):

Market correction continues as buyers wait on the sidelines

Minneapolis, Minnesota (September 12, 2007) – Persistent instability in the mortgage market and a related malaise in consumer confidence continues to dampen home sales across the nation and the Twin Cities, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc.

Amid a flurry of national news stories on uncertainties in secondary financing markets, newly signed purchase agreements (pending sales) for August were behind the same month last year by 18.1 percent, posting 3,834 unit sales. Similarly, closed sales are down 17.8 percent for the same time comparison.

“With buyers concerned by the news they hear on housing, it’s understandable that some are waiting on the sidelines,” said Deb Greene, president of MAAR. “Our concern is that while they wait they’re missing buying opportunities when the time is right.”

Builders and sellers have taken notice that buyers are in retreat. The number of new listings on the market in August was down 7.9 percent from August 2006, the seventh consecutive month of year-over-year declines in listings. Year-to-date, there has been 3.2 percent less placed on the market than this time in 2006.

Despite this decline in new listings, the drop in sales has been even more dramatic. As a result, homes are staying on the market longer and inventory is at record highs. At the start of the month there were 34,808 homes for sale in the Twin Cities region, an increase of 11.3 percent from this time last year. This amounts to 10.39 active listings for every expected buyer for the month of September.

“Sellers need to understand what they’re up against,” said Greene. “Homes must be priced aggressively and kept in excellent condition to sell quickly.”

With sales down and inventory up, home values showed a slight decline. The August median sales price of $230,000 is 2.1 percent down from August 2006. Home sellers received 94.7 percent of their original asking price in August, down from last year at this time when the figure was 96.6 percent. Downward pressure on home prices will continue as we enter the typical fall season slowdown.

Home values have declined as the market shifts further in the buyer’s favor, but at different
velocities depending on the property type.

“Projections on the future of the housing market are like belly buttons—everyone’s got one,” said Kevin Knudsen, president-elect of MAAR. “But the only thing we know for certain is that this rebound will take some time. In the meantime, opportunity is out there for buyers.”

There Goes the Neighborhood: KILLER BEES!

When I was a kid my Grandma took me to see this movie - "The Swarm" and it scared the tar out of me. I remember she told me not to worry about it, the killer bees would take years and years to get to us. Well they have made it to Texas, and California, and now New Orleans...

At least winter will be here soon!

Killer bees’ descend on New Orleans

MERAUX, La. - Africanized honeybees, a fierce hybrid strain sometimes referred to as “killer bees,” appear to have established themselves in the New Orleans area, the state agriculture commissioner said.

A swarm of the bees was captured about five miles from where demolition workers found a colony of Africanized bees in January, commissioner Bob Odom said Tuesday.

The most recent find was close enough to the earlier find that the bees might have come from the same colony. But they might also have flown ashore from a passing ship or barge, Odom said in a news release.

“Although the exact source can’t be identified, we have to assume Africanized honeybees are now established in the area and people should be careful when working outside,” Odom said.

The Department of Agriculture and Forestry keeps traps along a north-south line through the state and at all deepwater ports to monitor the bees, which are smaller and more aggressive than the European honeybees raised for honey.

Smaller, but fiercer
“Because Africanized bees have been labeled ‘killer bees’ for years, there’s an idea around that they are bigger than European honeybees,” Odom said. “The truth is they’re actually smaller but a lot fiercer.”

They have the same venom as honeybees, but attack in groups. Experts recommend that anyone confronted with Africanized bees find cover quickly.

Africanized bees are the result of an experiment to increase honey production in Brazil. A swarm escaped a lab in 1957 and headed north. When they mated with native strains, the offspring were as aggressive as the African parents.

They reached Texas in 1990 and have spread west to California and east to Florida. They were first found in Louisiana in Caddo Parish, in June 2005, and identified the following month. They have moved steadily east since then, and were most recently found near Pecan Island and Turkey Creek.

Refi Rescue for Foreclosure?

This CNN/Money Article outlines some potential relief for those facing foreclosure.

Here's the highlights:

It used to be you couldn't refinance into an FHA loan if you'd been delinquent in your payments for any reason. But with the FHA Secure Act, delinquent homeowners qualify for an FHA-insured refi if they have:

• A history of on-time payments for at least six months before their loans reset to higher rates
• Interest rates scheduled to reset between June 2005 and December 2009
• 3 percent equity in their home, or the cash equivalent
• A sustained history of employment
• Sufficient income to make their FHA-insured mortgage payment and all other obligations

The FHA will still insist that lenders verify borrowers' income and ensure that their total debt payments don't exceed 43 percent of their income or that their mortgage payment won't exceed 31 percent of income. If those ratios are exceeded, the lender must explain how the homeowner can compensate for that.

More Good News for Metro Real Estate! (cough)

Not surprising but here's the latest Strib Headline:

Twin Cities home sales plummet in August

Is it just me or does the Strib seem rather breathlessly exuberant in their reporting of the market downturn?

Could it be some residual bitterness they are feeling having lost millions in Ad revenue due to the fact that many local companies no long shell out big bucks to advertise in the paper.

I subscribe to the Strib and I am not trying to bash them - but research clearly showed that placing ads their was not very effective.

Of course, the same could be said about a lot of marketing avenues these days...

One thing remains true:

"With buyers concerned by the news they hear on housing, it's understandable that some are waiting on the sidelines," said Deb Green, association president. "While they wait they're missing buying opportunities."

Don't miss the boat because this situation won't last forever. In fact it will be interesting to see the impact of the expected rate cut next Tuesday...

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

The Twin Cities housing market is seeing huge week-to-week declines in seller activity as we enter the fall and the school year begins again. Just four weeks ago, home sellers placed 2,324 new houses on the market for sale; for the week ending September 1, only 1,659 new units were listed. Compared to one year ago, this most recent figure is a drop of 16.7 percent. Not surprisingly, buyer activity remains stunted as uncertainties in the mortgage market and a fragile consumer psychology persist. The most recent tracked week shows a pending sales decline of 22.5 percent from this time last year.

Market Share of Local Real Estate Companies

I don't usually spend much time here shilling for Edina Realty, the company that holds my license.
But I did think this was quite interesting. People often ask me who the largest company is and I usually say that Edina and Coldwell are pretty neck and neck, depending on what numbers you choose to look at. However, it seems recently that Edina comes out on top more consistently.

In uncertain times I like to think there is safety in numbers!

Banks Prepared to Woo Borrowers with Good Credit

Banks have plenty of money available for borrowers with great credit and a desire for a conventional fixed rate mortgage, says James Chessen, chief economist for the American Bankers Association.

To attract these customers, lenders are offering fee waivers, competitive interest rates, and a willingness to negotiate.

Banks like conventional borrowers because they tend to be the kind of customers that will take advantage of other products from the lender, including savings accounts, credit cards and checking accounts. "We find that someone who has a mortgage with us will have about five products in addition to the mortgage," says Terry Francisco, a spokesman for Bank of America Corp.

To attract this kind of business, Bank of America is offering "No Fee Mortgage Plus," saving consumers about $3,000 in closing costs, which the bank covers.

Deals like this one make it important for borrowers with good credit to shop around.

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

Sellers and builders continue to curb activity in the Twin Cities housing market, with the week ending August 25 posting only 1,874 new listings—down 9.5 percent from the same week in 2006 and even further from their early summer peak. Despite the decline in new seller activity, the number of homes on the market remains at a record high for this time of year with 34,225 residential units for sale. This persistently high inventory is due to slowed absorption caused by sluggish home sales; newly signed purchase agreements were 18.7 percent behind this time last year.

This week's edition of the MAAR Weekly Market Activity report features an updated September 2007 figure for our Supply-Demand Ratio (SDR). The SDR grew to 10.39, which means there are 10.39 homes for sale per buyer. This is an increase of 24.8 percent from last September, and this figure should continue to grow through December before declining in 2008 with the end of the winter season slowdown.

For a thorough look at how our market is performing year-to-date and relative to the last several years, take a look at our new Monthly Indicators tool. We've revamped the design for easier use and added several years of important historical trends.

Darkest Before the Dawn?

Another day, another bleak article on the outlook of the Real Estate Market.

Take a peek:

Darkest before the Dawn? Experts Call for another Year of Down Market

Lake Harriet Band Shell

We had a nice time seeing a free concert at the Lake Harriet Band Shell this past weekend. It was a perfect venue for a perfect day. The ensemble we saw was pretty good as well - the Sprucetop Review. They played a few of our favorite Bob Dylan ("All Along the Watchtower")and John Prine ("Long Monday") and Lily had a blast crawling everywhere on the grass.

I am always amazed and grateful for all the free events available to us in the city. We really are fortunate!

Hope you had a nice l-o-n-g weekend!

Farmer Labor Train

From the high Canadian Rockies to the land of Mexico,
City and the country, wherever you may go,
Through the wild and windy weather, the sun and sleet and rain,
Comes a-whistlin' through the country this Farmer-Labor train.

Listen to the jingle and the rumble and the roar,
She's rollin' through New England to the West Pacific shore.
It's a long time we've been waitin', now she's been whistlin' 'round the bend,
Roll on into Congress on that Farmer-Labor train.

There's lumberjacks and teamsters and sailors from the sea,
There's farmin' boys from Texas and the hills of Tennessee,
There's miners from Kentucky, there's fishermen from Maine; Every worker in the country rides that Farmer-Labor train.

There's warehouse boys and truckers and guys that skin the cats,
Men that run the steel mills, the furnace and the blast,
Through the smoky factory cities, o'er the hot and dusty plains,
And the cushions they are crowded, on this Farmer-Labor train.

Listen to the jingle and the rumble and the roar,
She's rollin' through New England to the West Pacific shore.
It's a long time we've been waitin', now she's been whistlin' 'round the bend,
Ride on on into Congress on that Farmer-Labor train.

There's folks of every color and they're ridin' side by side
Through the swamps of Louisiana and across the Great Divide,
From the wheat fields and the orchards and the lowing cattle range,
And they're rolling onto victory on this Farmer-Labor train.

This train pulled into Washington a bright and happy day,
When she steamed into the station you could hear the people say:
"There's that Farmer-Labor Special, she's full of union men
Headin' onto White House on the Farmer-Labor train."

-Woody Guthrie