Market Updates for 100 Twin Cities Communities!

Here is a tremendous new resource from the Minnesota Association of Realtors.

Click the links below for great updated market info!

	updated April 9, 2007
	Albertville Andover Annandale Anoka Apple Valley Arden Hills Becker Belle Plaine Big Lake Blaine Bloomington (2 pages) Brooklyn Center Brooklyn Park Buffalo Burnsville Cannon Falls Champlin Chanhassen Chaska Chisago Circle Pines Clear Lake Columbia Heights Coon Rapids Cottage Grove Crystal Delano Eagan East Bethel Eden Prairie Edina Elko Elk River Faribault Farmington Forest Lake Fridley Golden Valley Ham Lake Hastings Hopkins Hugo Inver Grove Heights Lake Elmo Lake Minnetonka Area (3 pages) Lakeville Lindstrom Lino Lakes Little Canada Lonsdale Mahtomedi Maple Grove Maplewood Medina Mendota Heights Minneapolis (3 pages) Minnetonka Monticello Montrose New Brighton New Hope New Prague North Branch Northfield North Saint Paul Norwood-Young America Oakdale Oak Grove Otsego Plymouth Princeton Prior Lake Ramsey Red Wing Richfield Robbinsdale Rogers Rosemount Roseville Saint Anthony Saint Francis Saint Louis Park Saint Michael Saint Paul (3 pages) Saint Paul Park Savage Shakopee Shoreview South Haven Stillwater Vadnais Heights Victoria Waconia Watertown West Saint Paul White Bear Lake Woodbury Wyoming Zimmerman Zumbrota

Lenders willing to help struggling homeowners

From MSNBC:

NEW YORK - As home foreclosures mount, mortgage companies are knocking on doors, sending letters and making phone calls with a simple message for struggling homeowners: They’d rather modify your loan than foreclose.

EMC Mortgage Corp., which has a $78 billion loan portfolio that includes subprime loans made to homeowners with weak credit, this week launched a 50-person team it calls “the Mod Squad.” Members will spend an unlimited time on the phone with troubled borrowers, sifting through their bills to compute a workable monthly payment. In an industry that often rewards workers for getting off the phone quickly, the team is preparing to speak to just three people a day.

“You can’t just run this like a call center; it needs to be run like a counseling center,” said John Vella, president and CEO of EMC. Right now, $2.14 billion in mortgages, 2.74 percent of EMC’s portfolio, is in default, up from 1.93 percent a year ago.

Lenders have long modified loans for homeowners facing job loss, illness, divorce or a death in the family. But with many borrowers across the country struggling to keep up with mortgage payments, mortgage companies increasingly are prodding anyone who’s having trouble making payments for any reason to give them a call.

Critics say lenders made loans to borrowers who weren’t creditworthy with terms that would be impossible for them to meet. Whether the current wave of workouts will merely postpone foreclosures — and delay bad loans hitting lenders’ books — is an open question.

Regulators will be watching to see how many are successful, said Susan Wachter, a professor of real estate and finance at the University of Pennsylvania’s Wharton School of Business.

The scant public information on modifications makes evaluation tricky, said Thomas Lawler. The former chief economist at Fannie Mae now runs his own consulting business, Lawler Economic & Housing Consulting, in Vienna, Va.

Loose lending standards followed by lax modifications can merely delay a problem, Lawler said. He pointed to the raft of modifications done in the manufactured housing business in the mid 1990’s, when easy credit led to a wave of defaults and reposessions.

“If people had known what the servicers were doing, red flags would have been raised; but by the time people knew what was going on, it was too late,” he said.

Advocates say that half the people in foreclosure never talk to their banker before losing their house, and many could rework their loans if they only got help.

“It’s tragic,” said Colleen Hernandez, president of the nonprofit Home Ownership Preservation Foundation. “We have the capacity to help a whole lot more people.”

Calls to her group have picked up markedly. Its 24-hour hotline, (888) 995-4673, is getting 300 calls a day, from 75 daily in the first quarter of 2006.

Weekly Market Activity Report

Here's the latest from MAAR:

Activity in the Twin Cities housing market is gradually increasing as we enter the spring season. Total inventory, new listings and newly signed purchase agreements (pending sales) are all on an upward trend. However, activity remains down compared to 2005 and 2006, and pending sales, in specific, remain a concern. For the week ending March 31, there were just over 2,600 new listings, down 4 percent from the same time last year. Pending sales were 19 percent behind for the same year-over-year comparison.

This week's edition of the MAAR Weekly Market Activity Report features a brand new metric: Percent of Original List Price Received at Sale. The March 2007 figure is 95.6 percent, down from the figure of 97.8 percent posted in March 2006. The number is created by comparing the final sales price of closed sales to their original list prices. This does not account for list prices from any previous listing contracts, but remains a valuable tool in gauging the supply-demand dynamics of our market.

BOO! Beware the Monster House!

The Strib has an article today about some new ordinances being considered for SW Minneapolis regarding the "growing" problem of "Monster Houses."

I can definitely see the neighborhoods concerns over preserving the historical charm of our city.

I can't understand why people would want to ruin the character of their homes just to Super Size them. Why not just move into a larger home or build on a suitable lot?

In the long run I think people are finding these extremely modified homes are much harder to sell than they think they will be. Many buyers bristle at homes where there are modern updates that don't match the period of the original home. There are exceptions to this of course but Sellers and Home Owners should know that bigger is not always better!

Whole Foods in Downtown Minneapolis?

I usually don't get too excited over the possibility of a new grocery store opening but I can see why my associate Fritz Kroll is so enthusiastic over this news in the Strib:

Downtown condo plan goes retail

The developer shifted gears in a saturated downtown condo market. The new plan has Whole Foods and possibly a Best Buy.

"This would just be dynamite," said Fritz Kroll, North Loop livability chairman and a sales agent for an Edina Realty office that's in a renovated 1800s hotel down the street from the project.

"It says that there's enough housing already on the market and that there's already enough housing here to support some substantial retail growth."

On Wednesday night, Seattle-based developer Don Milliken of the Milliken Develoment Group presented preliminary plans for the 165,000-square-foot project to members of the North Loop Neighborhood Association. Plans include a 71,000-square-foot Whole Foods store on the first floor and high-end retail space on the second floor that could include a Best Buy store. Whole Foods and the prospective Best Buy store would represent 70 percent of the space. There will also be underground parking, windows into Whole Foods along Hennepin Avenue and public spaces that weren't part of the condo plan.

That's right, Kid "Dyn-A-Mite" Kroll! Seriously, this is just what is needed in that area. Plus it gives some competition to the newly opened Lunds across the river. All the new condos are great. The restaurants are fabulous. But amenities like grocery and useful retail will really cement that area in as truly livable for years to come. That's the real news here. The stuff about the waning condo market is so 2006.

Personally I am more than a little excited about the new Super Target opening in Richfield. I wouldn't necessarily want to be next door but having the big box shop just a short drive away (diaper run!) is comforting. Plus, the organic produce in the grocery part of the store is actually very strong.

Now if we could just get a Whole Foods somewhere along the Hiawatha Light Rail Line...

Off the Road, Again...

The Strib ran this story today that no doubt will impact all of us:

157 road projects announced

The long-awaited untangling of the Crosstown/35W junction and the shutdown of Hwy. 36 in North St. Paul for seven months of reconstruction are among 157 projects announced Thursday by the Minnesota Department of Transportation.

The $1.5 billion summer road construction program includes 36 projects in the metro, and another 121 statewide, MnDOT said in a news release.

Other metro projects include the continuation of the I-694/I-35E "Unweave the Weave" reconstruction project in Vadnais Heights and Little Canada and a new alignment for Hwy. 212 from Hennepin County Road 4 to County Road 17 in Chanhassen.

Projects beginning in greater Minnesota include replacing the Highway 169 bridge in Le Sueur, expanding Highway 10 from two to four lanes in Staples and rebuilding Highway 68 in downtown Marshall.

The scale of this year's construction program is similar to last year's, which included 170 projects with an overall cost of $1.5 billion.

MN-DOT greated this NIFTY MAP so we can better plan our summer get-aways.

Road construction - like weather forecasts and Packer fans, are a "necessary evil" I guess. But that doesn't mean we have to like 'em!

Happy Trails!

Weekly Market Activity Report

Here's the latest from MAAR:

The Twin Cities housing market remains on the course it set upon following the end of the boom expansion in early 2005. While buyer and seller activity is on its annual upswing as we enter the busy spring market, the picture looks different when compared to one year ago. New listings for the week ending March 24 were 0.5 percent above the same time last year, while newly signed purchase agreements (pending sales) were 15 percent behind for the same time comparison. With home prices holding steady and interest rates staying historically low, important improvements are being made in home affordability that will aid the market down the line.

This week's edition of the MAAR Weekly Market Activity Report features an updated Supply-Demand Ratio (SDR) figure for April 2007 of 6.81. This means that there will be approximately 6.81 homes on the market for every buyer in the month of April. This is a 29 percent increase over the April 2006 figure. The SDR should continue to rise throughout 2007 as the busy spring and summer seasons bring more homes on the market.

Spring Selling Season Tips

You have seen them, popping up everywhere, especially on a sunny Sunday afternoon?

Tulips?

No, not quite yet...Open House Signs.

It's no secret that Spring is the most popular time to sell your home in Minnesota and this year will certainly be no different. It makes sense, most of homes really start looking their best after the snow has melted and the grass has begun to turn green. However, Spring can also be a rather wet season as well (April Showers anyone?!). That said, here's a short list of tips to make sure your home is looking it's best if it is on the market this spring.

1. "Thank you for removing your shoes!"

-Asking EVERYONE who enters your home and in particular those coming for a showing to remove their shoes is an absolute must. Agents expect and respect this rule and most Buyers learn that it goes with the territory. A small sign at the front door usually does the trick.

2. Keep it Simple

Try not to add to the clutter of your home with extra plants. A simple vase on the table is usually a simple and tasteful way to add spring to your home. Less is more.

3. Just Say No to Plug in Air Fresheners and Potpourris!

This is a pet peeve. A good smelling home is a good thing. But too much of a good thing is BAD. I discourage my clients from burning incense, plug in air fresheners, and other aromatic smells because Buyers tend to become suspicious and wonder what you are trying to "cover up."

4. Water Water Everywhere...Except the Basement!

MANY people struggle every spring with water coming into their basements. 90% of the time this problem can be solved by landscaping. If this happens to you simply make sure (first and foremost) that you accurately disclose this to all potential buyers and you address the problem by regrading the landscaping around your home. At least you will show all buyers you are being proactive and they will appreciate your honesty.

5. Clean. Clean. Clean.

Clean houses sell. Period. I recommend either hiring a professional cleaner before you go on the market or rolling up your sleeves and cleaning your home as if your pickiest relatives were coming over for Thanksgiving. And then have a friend or your Agent come over and give you a second opinion. Usually they can spot the "fuzzy" bathroom vent or the dust bunnies under the fridge that you might have missed.

I hope you found these tips useful. Happy Spring!

First Time Buyer's Guide for Minnesota Real Estate

The Minnesota Association of Realtors published this online Guide for First Time Buyers interested in learning how the real estate process works.

There's some good info there. Also...

Here's a quick look at the steps you'll take when buying your first home with Me:

1. Go to one of my Free Home Seminars to get valuable home buying tips, information on the current housing market and financial advice.

2. Figure out how much home you can afford. You can do this by using my Finance Center Tools.

3. Conduct a preliminary search with Edina Realty's Property Finder. You may even want to save some of your searches and schedule home showings online.

4. Apply Online for a free pre-approval. Or contact a Mortgage Consultant and get your mortgage pre-approved. I have several that I can recommend to you.

5. Contact Me to look for a house that meets your needs. I can set up Auto-Searches so you will be e-mailed listings that meet your criteria as soon as they come on the market.

6. Once you find a home that you want to make an offer on, you'll sign a purchase agreement and give the seller earnest money to seal the deal. If your offer is accepted (sometimes with contingencies), determine a date you wish to close.

7. Have your new home inspected to ensure there's nothing seriously wrong with the property and get homeowner’s insurance to protect yourself against any unforeseen calamity. You may also want to check for mold in the home...learn more from the MN Dept. of Health.

8. Notify your mortgage consultant that you've found a property so they can begin the appraisal and title process. And, lock in your interest rate. Your mortgage consultant will send you a new good faith estimate which shows your monthly mortgage payment as well as your estimated cash needed for closing. Edina Realty Title will notify you of the time and date you close on your home and the items you'll need to bring to closing.

9. Notify your phone company, utilities (don't forget water and sewer), moving company, post office, newspaper and magazines, friends and family (see our moving checklist) and change your mailing address. Use our Home Connections service to help make connections to your new home.

10. Pack and move!

Subprime Woes? Here comes FHA

Every cloud DOES have a silver lining! For those of use with less than perfect credit, the recent free-fall of the Sub Prime lending market has been a cause for concern.

What does this all mean to the average home buyer? Here's a breakdown:

WHAT TYPE OF BORROWER ARE YOU?

PRIME: Have perfect to near-perfect credit and can document their income and assets; get lowest mortgage ratesUsually a credit score in the mid-600s* and above.

ALT-A: Either have good credit but difficult-to-document income or assets or have some negative credit problems, but can document income and assets. Usually a credit score from the 600s* and above.

SUBPRIME: Bad or no credit. Usually a credit score below the low 600s*.

*Variables are credit, income, collateral and debt.

WHO'LL HAVE TROUBLE GETTING A MORTGAGE?

• People with no credit, bad credit and high debt.

• People with marginal credit who have trouble documenting their assets and income.

• Homeowners with marginal credit, low assets and little or no equity who are trying to refinance out of an adjustable-rate mortgage.

• Investors who have been buying properties with low or no down payments and minimal assets.

In today's Strib Kenneth Harney expalins that the FHA Loan program that used to be such a market force in the past are now poised for a come-back:

But here's some potentially helpful news: There is a mortgage source that is actually expanding its business nationwide for credit-impaired and first-time home purchasers. That source is the golden oldie of the mortgage arena -- the Federal Housing Administration (FHA), which recently has seen a doubling of customers refinancing out of private, subprime loans into its insured mortgage programs.

There's good reason: The FHA doesn't have problems with Wall Street investors who now see subprime mortgage bonds as toxic. The FHA's bonds, by contrast, are gilt-edged and backed by the federal government, so there's no shortage of mortgage money.

Equally important: FHA-insured loans are more consumer-friendly than subprime, and come with interest costs roughly 3 percentage points below directly comparable subprime mortgages.

There are drawbacks, of course. FHA mortgage maxPublishimums top out just under $363,000. In the very highest-cost markets, an FHA loan will only let you buy a modest starter home. Yet in more typical markets nationwide, the FHA's limit does not pose a problem. And the FHA's maximum loan amounts are likely to increase.

Bipartisan legislation to raise the loan ceiling to the full Fannie Mae-Freddie Mac limit -- currently $417,000 -- is expected to be introduced on Capitol Hill shortly, and appears to have support for passage this year.

You can read more about the FHA Program here: LET FHA LOANS HELP YOU. I am sure you will be hearing a lot about this come-back in the coming months.

Blue skies ahead!

Subprime Reforms to Have Slight Market Impact

The Latest from NAR:

Tighter underwriting standards on subprime loans will have a short-term impact on the housing market, says the NATIONAL ASSOCIATION OF REALTORS®.

However, that impact will be softened if Congress enacts legislation to expand the roles of Fannie Mae, Freddie Mac, and the Federal Housing Administration. The legislation would provide more housing opportunities to families that have low incomes or live in pricey metropolitan areas, NAR says.

NAR praised the House Financial Services Committee Thursday for approving a bill to reform government-sponsored enterprises (GSEs). The bill would overhaul the regulatory structure for the nation’s housing finance GSEs that include Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. The legislation now moves to the full House of Representatives for approval.

Slight Sales Drop Expected

David Lereah, NAR’s chief economist, predicts that tighter underwriting practices may cause total home sales to fall by about 100,000 to 250,000 nationally, or no more than 3 percent a year over the next two years.

“Foreclosures are increasing inventories in certain local markets,” Lereah says. “The projected flood of foreclosures are problematic and will add to the already loose housing supply in some local markets, but these local markets are exhibiting healthy economic activity, enabling them to be able to absorb increases in foreclosures."

Lereah says more households will wait to make a purchase until they have a stronger financial base and can afford a down payment, he says. These households may seek mortgage loans from a revitalized FHA, from lenders making loans that meet Fannie Mae and Freddie Mac standards, and from other lenders offering affordable mortgage options to subprime borrowers, Lereah adds.

Lereah: Don’t Overreact

Subprime problems may be manageable, as they're occurring against a backdrop of cyclically low mortgage rates and a growing, healthy economy, where jobs and liquidity are plentiful in the marketplace, Lereah says.

Therefore, Lereah warned against overreaction to the situation. “Tougher lending standards imposed by the marketplace and the regulators are necessary, but we need to be mindful of overcorrection,” he notes. “Responsible lending practices are what the doctor ordered, not practices that cause a credit crunch.”

NAR President Advocates for Reform

NAR President Pat Vredevoogd Combs has led a campaign to modernize and revitalize the FHA mortgage insurance programs, providing subprime borrowers with a safe and affordable alternative to problematic loans and aiming to bring stability to the subprime market.

“FHA mortgages can help meet the demand for subprime mortgages and help fill the gap in the mortgage market left by the decline of subprime and nontraditional products," Combs says. "A few simple changes can make a big difference."

She says NAR supports increasing FHA loan limits, allowing risk-based pricing of mortgage insurance premiums, and reducing down payment requirements to reflect the current mortgage market.

Minneapolis Water Stinks!

"Experts" like Larry David's wife Laurie and Martha Stewart insist the tap water is actually safer and more regulated than bottled water. And yet...I don't like tap water. Then I read this in the Strib - that the A "swampy, musky, fishy" scent coming from the faucet is "not harmful." Musky!? Fishy?! Not harmful?! Is that the standard for potable water? I am curious who drinks water from the tap and who ruins the earth like I do with my cases of bottled water. I remain dubious of "filters" and other such devices. Water, water everywhere and not a drop (that doesn't smell musky) to drink...

Edina Realty teams up with Cyberhomes.com

Searching Locally & Nationally Just Got Easier!

Cyberhomes.com features ALL active Edina Realty listings with each agent’s contact information ….unlike Zillow.com. So we will know when someone has interest in your home!

Cyberhomes.com is one of the largest, most complete, current and detailed property databases available. It includes more than 100 million property, ownership, sales, and mortgage records, covering more than 85% of the United States population.

Plus our Home Value Tool is powered by Cyberhomes™ which provides mapping functionality and easy search options for consumers.

Search your present, future or currently listed home and check out this cool new feature today!

Weekly Market Activity Report

Here's the latest from the Minneapolis Area Association of Realtors:

Buyers continue to exercise restraint as the Twin Cities housing market moves through its post-boom correction phase. New purchase agreements (pending sales) for the week ending March 17 were 14 percent behind the same week last year with a little more 800 new sales, while new listings on the market grew by 10 percent for the same year-over-year comparison. There are currently roughly 29,000 single-family housing units for sale in the Twin Cities market; 19 percent of this total inventory is new construction.

Edina Realty Joins Minnesota March FoodShare Campaign

For the fourth year in a row, Edina Realty will be taking part in the March Minnesota FoodShare campaign. Throughout March, our offices will serve as drop sites for this annual food drive. Items in need include canned or packaged foods; baby items including diapers, formula and cereal; and sundry basics such as toilet paper, shampoo, laundry and dish soap, toothpaste and toothbrushes.

Last year, Edina Realty agents and employees donated a total of 8026.80 pounds of food and $16,828 in cash for a total of 24,854.80 pounds and dollars. Our goal this year is to top 30,000 in cash and food donations!

The March campaign is Minnesota’s largest food and cash drive to fill the state’s food shelves. Today, food shelf usage is at an all time high. Let’s do our part to help combat hunger in our communities!

Contact Me if you are interested in making a donation. Thanks!

Baby & the Bathwater

I have to say I am not a huge fan of new construction. I find a lot of it to be...well...cheap and artificial. I am a big fan of 1920's architecture - Arts & Crafts in particular.

However, since the birth of our first child my wife and I have been looking at our Craftsman in a new way. While we adore our hardwood floors and built-ins the term "kid friendly" does not really apply. Soon - before we know it- our darling Lily will be on her feet and on the move and the small bedroom nursery we carpeted for her last summer will no longer be enough to contain her (or ease our fears!).

So I found myself reading this article -From the Ground Up - from the Saturday Strib with renewed interest. I could really identify with the couple in the article (they are also not big fans of new construction) but they found an Architect (Michael Huber) and a builder (Corey Benedict) who seemed to share their aesthetic and desire to create a "green" home.

Homeowner Jason Hammond started a BLOG about his experiences which I expect I will become an avid reader of.

It's true what they say, a new baby really does change everything. Stay tuned...

Existing-Home Sales Post 'Surprising' Gains

More Good News from NAR:

Existing-home sales rose strongly in February reaching the highest level since last April, and follows a healthy gain from January, according to the NATIONAL ASSOCIATION OF REALTORS®.

Total existing-home sales — including single-family, townhomes, condominiums, and co-ops — rose 3.9 percent to a seasonally adjusted annual rate of 6.69 million units in February from a downwardly revised level of 6.44 million in January. Still, the numbers are 3.6 percent below the 6.94 million-unit pace in February 2006.

Nevertheless, last month’s increase was the biggest monthly rise in three years — sales last rose 3.9 percent in March 2004.

David Lereah, NAR’s chief economist, says the strong gain is a bit of a surprise.

“Some of the rise in home sales may be from mild weather that brought out shoppers in December, but fundamentals have improved in the housing market and buyers see a window now with historically-low mortgage interest rates and competitive pricing by sellers,” he says. “Even so, winter storms last month discouraged shopping, and buyers were chilled with the third coldest February on record. These unusual weather patterns mean home sales that close in March may decline before rebounding later this spring.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.16 percent in the last week, down from an average of 6.29 percent in February. The 30-year fixed rate was 6.22 percent in January, and 6.25 percent in February 2006.

NAR President: Median Home Price Distorted

The national median existing-home price for all housing types was $212,800 in February, down 1.3 percent from February 2006 when the median was $215,700. The median is a typical market price where half of the homes sold for more and half sold for less.

NAR President Pat Vredevoogd Combs says the median home price currently is distorted. “Over the last year, we’ve seen declining sales in many high-cost areas but rising activity in lower cost markets,” she says. “This change in the geographic composition of sales means we aren’t getting apples-to-apples comparisons in median home prices from a year ago.”

Other indices examining sales of the same properties over time, such as the OFHEO House Price Index, have been showing price gains; however, the OFHEO index is limited to conventional financing.

“What’s really happening is probably somewhere in between the different measures, but home prices are soft — a year ago we were still seeing bidding pressures and double-digit price growth,” Combs says. “Overall, home prices should rise slowly this year, and many buyers have an opportunity now that was only a dream during the five-year boom.”

A Closer Peek at Sales

Some other key findings from NAR's latest housing report:

• Total housing inventory levels rose 5.9 percent at the end of February to 3.75 million existing homes available for sale. That represents a 6.7-month supply at the current sales pace compared with a 6.6-month supply in January. Raw inventories peaked last July at 3.86 million, and supplies topped at 7.4 months in October.

• Single-family home sales increased 3.7 percent to a seasonally adjusted annual rate of 5.88 million in February, from 5.67 million in January. But those sales numbers are 3.4 percent below the 6.09 million-unit pace in February 2006. The median existing single-family home price was $211,100 in February, down 1.5 percent from a year ago.

• Existing condominium and co-op sales jumped 5.3 percent to a seasonally adjusted annual rate of 810,000 units in February, from a level of 769,000 in January. February sales are 5.2 percent below the 854,000-unit pace in February 2006. The median existing condo price was $225,400 in February, up 0.5 percent from a year earlier.

Regional Snapshot

Here's a closer look by region of existing-home sales in February:

Northeast: existing-home sales surged 14.2 percent to a level of 1.21 million in February, and are 3.4 percent higher than February 2006. The median existing-home price in the Northeast was $265,900, down 1.4 percent from a year earlier.

Midwest: existing-home sales rose 3.9 percent in February to a level of 1.58 million, but are 1.9 percent below a year ago. The median price in the Midwest was $157,000, down 1.3 percent from February 2006.

South: existing-home sales increased 1.6 percent to an annual sales rate of 2.58 million in February, but are 4.4 percent below February 2006. The median price in the South was $175,900, down 2.9 percent from a year ago.

West: existing-home sales went unchanged in February, holding at an annual pace of 1.32 million. Sales are 9.6 percent lower than a year ago. The median price in the West was $337,100, up 2.2 percent from February 2006.

The Twin Cities are Growing!

Today the Strib had a cover story that was noteworthy for several reasons.

1.) It was about Real Estate

-and-

2.) It was positive!

In this era of Gloom & Doom Bubble Bursting Oblivion I will take good pub whenever we can get it!

The story is about how recent census data seems to back up what most of us who have been watching already know: people are moving into the urban core at a faster rate than they are "fleeing" to the suburbs.

This is good news as any civic planner will tell you - cities are only as strong as their cores.

There were a number of reasons cited as to why this is the case an principal among them has been the recent condo boom downtown. There is no question that this has had a major impact. However, I remain dubious of "trendy" Real Estate deals and we have already seen kind of a backlash in that market. For my money, single family homes are still the horse to ride in terms of a long term investment.

A lot of the clients I serve are choosing to live in the Twin Cities because of the close proximity to arts, culture, non-chain restaurants, locally owned shops, parks, lakes, and other features some of which are just not a part of the Suburban experience--especially the "non-chain" part. Also the light rail continues to have a positive impact. People really hate the ever worsening traffic that they face in a daily commute.

So, it's different strokes for different folks and at this point it seem that more and more folks are opting for the urban experience.

And that is good news for all of us!

Free Tree Workshops and $15 Trees

The City of Minneapolis and the Tree Trust are making 1,500 trees available to all Minneapolis residents to help replace trees damaged by storms and disease in recent years.

Residents can order one tree per address and can choose from six varieties: Cathedral Elm, Autumn Brilliance Serviceberry, Bur Oak, Cockspur Hawthorn, River Birch and Austrian Pine. See examples of the the trees at www.treetrust.org.

The cost of the tree is $15 and must be ordered by April 15. You may order your tree online at www.treetrust.org or stop by the NENA office for a tree order form. You may also call 651-644-5800 for the form and other information.

NENA encourages residents to also attend one of the Tree Trust's free workshops on tree planting, care and info on the latest tree pests. The closest workshop is Thursday, March 29 from 6:00 p.m. to 8:30 p.m. at the Nokomis Recreation Center, 2401 E. Minnehaha Parkway.

Weekly Market Activity Report

Here's the latest from MAAR:

After a brief halt in the Twin Cities housing market caused by the snowfall deluge of early March, buyer and seller activity returned to levels that closely mirrored pre-storm market activity. For the week ending March 10, new listings were behind the same time last year by 5 percent and new purchase agreements (pending sales) were behind by 20 percent for the same year-over-year comparison. The total inventory of homes for sale continues to grow as we enter the active spring market, but its growth remains slower than seen in the frenzied spring ramp-ups of 2004 and 2005.

Story of the Year so far...

Not a shock to anyone watching but the story of the year so far in real estate is not the "soft landing" or "bubble pop" (depending on who you ask) of the Real Estate Market but rather the stunning collapse of the Sub Prime Lending Market.

This will have huge implications for years to come and will definitely come home to roost with fewer sales. It's simple, if people with less than stellar credit are unable to qualify for loans than there will be fewer buyers in the mix.

Not good. Not good at all.

My Hope is that the FHA program will re-emerge as a real player for First Time Buyers and others who don't qualify for A+ programs.

A few years ago FHA were very popular and now I seldom see them. Here's some info on the program:

Let FHA Loans Help You

FHA loans have been helping people become homeowners since 1934. How do we do it? The Federal Housing Administration (FHA) – which is part of HUD – insures the loan, so your lender can offer you a better deal.

• Low down payments
• Low closing costs
• Easy credit qualifying

What does FHA have for you?

Buying your first home?
FHA might be just what you need. Your down payment can be as low as 3% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.

Want a fixer-upper?
FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs - all in one loan.

Financial help for seniors
Are you 62 or older? Do you live in your home? Do you own it outright or have a low loan balance? If you can answer "yes" to all of these questions, then the FHA Reverse Mortgage might be right for you. It lets you convert a portion of your equity into cash.

Want to make your home more energy efficient?
You can include the costs of energy improvements into an FHA Energy-Efficient Mortgage.

How about manufactured housing and mobile homes?
Yes, FHA has financing for mobile homes and factory-built housing. We have two loan products – one for those who own the land that the home is on and another for mobile homes that are - or will be - located in mobile home parks.

Ask an FHA lender to tell you more about FHA loan products.
Find an FHA lender

Need advice? Contact a HUD-approved housing counselor or call
(800) 569-4287.

Need help with your down payment? State and local governments offer programs that can help. Find a program near you.

Weekly Market Activity Report

Here's the latest from MAAR:

Unsurprisingly, the Twin Cities housing market found it difficult to battle through the monumental snowfalls seen during the week ending March 3. With schools and offices closed throughout the metropolitan area due to the inclement conditions, buyers and sellers followed suit. Compared to one year ago when weather conditions were relatively normal, new listings fell by 23 percent and pending sales fell by 28 percent. Time will tell just how much of this decline can be attributed to meteorology rather than general market conditions. This week's edition of the MAAR Weekly Market Activity report includes updated March 2007 figures for the Housing Affordability Index (HAI) and the Housing Supply Outlook (HSO). The HAI grew to 141 due to another dip in interest rates and a slight decline in home prices. As our market continues to work through its post-boom correction period, housing affordability is making important improvements. Home prices, interest rates and consumer income will affect the HAI. The HSO grew to 7.0 months, which means it will take approximately 7.0 months for the current supply of available properties to sell. The market is considered balanced when there is roughly a 5-month supply of homes available for purchase. Previously owned homes have 6.4 months of supply, while newly constructed homes have 10.5 months of supply.

HGTV's House Hunters is Coming to Our Town

One of the offshoots of the recent Housing Boom has been the proliferation of T.V. shows. From simple home improvement to "flipping that house!" it is amazing how fascinating we all seem to be with our homes. Moreover, as a Nation of Voyeurs, shows that feature people doing exotic things like playing poker, eating bugs for cash, and...buying homes have been all the rage. So, if you've ever had the urge to be a Reality (or in this case "Realty") T. V. Star... now is your chance! Here's the scoop from the info I received:

HGTV's "House Hunters" is coming to town! They are seeking Realtors® and their clients to participate in the show. Currently in its seventh year, "House Hunters" is a half-hour documentary style television program that tracks the emotional journey of home buyers as a real estate agent helps them search for a home and make a purchase. They also feature the homeowners after they move in, enjoying their new place.

Feel free to Contact Me for more info or check out the House Hunters FAQ. If anyone is interested let me know, it might be fun -plus the Buyers are paid $500.

Oak Street Cinema for Sale

I Lost it At the Movies...

Peter Scholtes has a rather depressing article over in City Pages about the Oak Street Cinema being put up for sale by the Minnesota Film Arts.

I would love to be in a position to buy this place. I would install Al Milgrom as El Presidente for Life and give him carte blanche to program the place as he saw fit. The man is a genius when it comes to finding obscure gems from the world's cinema.

I have many fond memories of this place. I saw some of my friend's films premiere here. I saw Elliot Gould give a Q & A about working with Robert Altman on "The Long Goodbye" one of my all time faves.

I certainly hope that whatever happens Al lands on his feet...like he always does!

Edina Realty voted "favorite women-friendly realty service"

In its annual survey of the “best of the best” for women in the Twin Cities, Edina Realty was voted “favorite women-friendly realty service” by the readers of the Minnesota Women’s Press.

Edina, Minn.—March 7, 2007 – In its annual survey of the “best of the best” for women in the Twin Cities, Edina Realty was voted “favorite women-friendly realty service” by the readers of the Minnesota Women’s Press.

In the publication’s 10th annual readers’ poll, readers chose their favorite people, places and things for women, from realty companies to restaurants, car dealerships to computer games. Included in the section called “On the Home Front,” Edina Realty is listed among the readers’ favorite garden centers, women-friendly realtors, hardware stores, insurance agencies, home remodelers, and handywomen.

“As far as [our readers] are concerned, the state’s dominant realty company is one of the best,” the editors wrote. “Edina’s website is tops – it includes all properties on the Multiple Listing Service (MLS), and you can search by neighborhood, zip code, price, type of home and more. This Minnesota-based company has 32 metro offices and a total of 3,400 realtors.”

Why Drive when you can Walk or Bike?

This article in today's Strib caught my eye. It's about the push from community leaders to get us out of our cars and onto our feet - or on our bikes. Perhaps it's Spring Fever but as someone who spends a lot of time driving people around in my car - I have to say this sounds like a great idea.

I have to admit that sometimes as I am driving along the River Road I get annoyed that a "pack of cyclists" -looking like they just missed the cut at the Tour de France- are drifting into traffic when there are paved paths just feet away.

Then I take a deep breath and remember that when I am pedaling around on my Schwinn Cruiser (white sidewalls baby!) I am frequently frustrated by the tight confines these paths provide, especially when you are sharing the lane with walkers, joggers, dogs, strollers and the like.

Truth be told there is really plenty of space for all of us. And if we just take a moment and slow down we will likely found we really can enjoy the ride.

Here's a link to information on the Midtown Greenway Coalition. I think it's vitally important for all of us to realize that it is because of the efforts of groups like these that the Twin Cities is one of the most pleasant places to live the country...as long as we all learn to give a wide berth and a smile!

Weekly Market Activity Report

Here's the weekly twin cities real estate update from MAAR:
Buyers and sellers in the Twin Cities residential real estate market aren't immune to historic snowfalls and blizzard conditions. For the week ending February 24 when the region saw the first of two monumental winter storms, new purchase agreements (pending sales) held relatively steady with the previous week rather than taking part in the annual uptick we typically see in late February. Compared to the same time in 2006, pending sales were 16 percent behind and new listings were 4 percent ahead. MAAR expects a similar stagnation to persist in next week's numbers due to the second stronger storm system seen in the first few days of March. This week's edition of the MAAR Weekly Market Activity Report features an updated Supply-Demand Ratio (SDR) for March 2007 of 5.77. This means that there are approximately 5.77 homes on the market for every projected buyer in the month of March. The SDR typically reaches its lowest point in March of every year before rising alongside seller activity in the spring market. Compared to one year ago, the SDR for March 2007 is 29 percent higher.

Condo Bust Hits the Suburbs

"In the 'burbs, you buy a cornfield, put up some houses or a Home Depot, run a piece of asphalt to it, and you're set," he said. "But we're just now figuring this new stuff out."

It seems the Condo Bust has hit the suburbs.

I have to say I am not surprised. I have often scratched my head at the shear volume of condos being built is some rather remote areas (Champlin and Farmington jump quickly to mind,) It's like watching someone play Sim City in sandbox mode...but once you start the reality clock, things quickly go sour. It's not that these are "bad areas" it's just that they don't lend themselves very well to the typical condo buyer's lifestyle. People who would rather walk than drive to a late dinner. People who enjoy the hustle and bustle of the street.

It seems builders have put the cart significantly ahead of the horse in this case. Of course, the costs of building condos where the resources already are (i.e. shops, theaters, etc...like downtown Minneapolis) is significantly higher. So they find cheap land in the suburbs or more frequently exurbs and they must just figure that once the people are there, the resources they want and need will follow suit.

Maybe so. But it may take a lot longer than new buyers are willing to wait...

METROPOLITAN LIVING GUIDE 2007

Not to toot my own horn(TA-DA!) but I recently had the good fortune to be interviewed by Molly Priesmeyer of the City Pages -Metro Living Guide. I think it is one of the best articles written locally about the current real estate market in the Twin Cities. Here's an excerpt on Selling Your Home:

Life is a Stage

Speaking of showing buyers, sellers need to remember that homes are a reflection of our lifestyle. It's not about where we live, as much as it's about how we live. Like our fashion choices, or homes are a reflection of who we are. As a seller, it's your job to figure out who your buyer will be, and work hard to show that buyer how your home can reflect their lifestyle.

According to T.J. Larsen, an independent realtor and blogger who writes at tcrealtor.blogspot.com about real estate trends and tips, the largest population of local homebuyers is between ages 24 and 40. "Buyers are getting younger," Larsen says. "And so are Twin Cities neighborhoods."

Here's a segment on how Buyers can really capitalize on the Current Market:

SAY HELLO TO GOOD BUYS
It's a buyers' market. But how can you ensure you don't get trapped in a bad deal?

Twin Cities neighborhoods are changing as quickly as spring turns to summer. The Light Rail line is connecting neighborhoods and new and old neighbors. Downtown and the airport are more accessible than ever before. Transportation has become easier and less time-consuming. And improved parks and the Greenway are making biking from downtown to the suburbs a beautiful and breezy ride.

Outside of the immediate metro area, suburbs are becoming miniature cities. Urban planners and designers are paying more attention to streetscapes, turning main streets into thriving destination spots. And new locally owned restaurants and shops are popping up all over the Twin Cities and the suburbs like tulips poking their heads out in May. This diversity of living experiences is exactly what buyers need and want, says independent realtor T.J. Larson. So if you're looking to buy smart and gain equity, buy in a neighborhood that has something to offer not only you, but future buyers, he notes. Most buyers these days are between the ages of 24 and 40. You want to think about young, hip urbanites them even when you're thinking about yourself, Larson says.

Location, Location, Location

You've heard it a million times. Location matters! Before you make an offer, you need to ask yourself, is it a good location? Will it hold up over time? To get an idea of the price you'll offer, make sure you do a sales analysis of homes in the area. Don't be afraid to ask the agent to give you evidence of what similar properties have recently sold for, Larson says. If you're buying in Minneapolis or surrounding suburbs, be sure to investigate through the Hennepin County site (see sidebar, "Sell Smart, Buy Wise") what the seller paid for the home. This will give you more negotiating space. "You also need to trust your instincts," Larson says. "Go back and visit the neighborhood and the home without your agent. Check it out again on your own; trust yourself." What are the kinds of locations that will hold up in the future? Larson says the neighborhoods with the brightest futures are the ones that offer trendy establishments, but still have the traditional icons that make Minnesota unique. Neighborhoods that have, say, a VFW hall or an old-school Norwegian bakery near a hip, minimalist new wine bar are exactly the quirky Minnesotan qualities that make will make neighborhood desirable over time. "Things are really changing in the Twin Cities," Larson says. "And it's a really great thing. People are creating their own communities now. They're becoming urban planners, in a way." Not only will this trend change the face of Twin Cities neighborhoods, but the younger buyers and their needs will start affecting a change in public education and public policy as well. And small-service businesses that cater to urbanites will continue to excel and thrive in community-focused neighborhoods. Pet stores, convenience shops with organic goods, coffee shops, for example, will only benefit from the shift in demographics and lifestyles. Larson calls the shift a continual spread of the Uptown phenomenon of 15 years ago. Neighborhoods East of Hennepin are continuing to grow, adjust, and become revitalized with each new project and shop. St. Paul neighborhoods are benefiting from the shift, too.

And...

Don't Be Afraid to Make Demands

No matter how pushy they might be, never let the realtor take the reins. "Realtors used to be the gatekeepers of information," he says. "Now, with the internet, all the cards are turned over on the table. It's as transparent now. Everyone benefits if you have that." In other words, do your research. Before you chose to spend hours driving all over town with a real estate agent you're unsure of, ask the agent for references. Interview them like you would any prospective employee. And make sure you're clear about your needs and that the agent understands them. "You want to make sure your realtor is someone you like and trust," Larson says. "You're going to be spending a lot of time with them. Make sure they do the work for you," he says. As a buyer, you can also demand that the seller do the work, he says. Ask them to pay your closing costs. Ask them to make all the necessary repairs. And don't be afraid to negotiate on the price. Meaghan Miller recently purchased a home in South Minneapolis. The 28-year-old graphic artist stumbled upon the home while traipsing through open houses one Sunday before the holidays. The sellers had already moved out, leaving the home bare. It was an immediate sign, Miller says, that she would have the upper hand when it came to negotiating. "The family had already moved away and had to sell fast," Miller says. "I knew it immediately walking in. So I was able to buy it for $6,000 less than the asking price, and get them to pay my closing costs." And though Miller liked other homes better, the stage had been set: She knew she had a sweet deal.

Crash and Burn?

While 2006 saw the biggest drop in home sales in nearly 20 years, Larson says there's no evidence to suggest that the Twin Cities is suffering from a major crash. Instead, he says, the bubble is merely releasing some of that hot air. And home prices are becoming more realistic, and luckily more affordable. "Affordable housing is a key to sustaining a city," Larson says. "And already we are short on affordable housing. It's necessary to the survival of the Twin Cities." More choices for buyers is a good thing, he says. While the market bottomed out last year, evidence suggests it will remain steady - but realistically steady. That means if you're purchasing a new home, don't expect to see 11 percent increases in value in a single year. Instead, Larson says, a conservative estimate is that home prices will continue to increase over the next 10 years at about five percent per year. "Five percent isn't horrible," Larson says. "If you buy a $200,000 home, in five years you've made more than $60,000. And that's being conservative," he adds. In other words, Larson says, there's no better time to buy. And there's no better time to be living in the thriving Twin Cities.

Read the entire article here Thanks Molly for the excellent article!

Reasons to Buy in a "Flat" Market

I'm not a huge fan of Bob Bruss but his recent column does a fine job of explaining some of the tax benefits that come with investing in Real Estate:

Don't worry; invest in real estate

Although market-value appreciation rates have shifted to a ''plateau'' in most cities, long-term realty investing still provides tax benefits.

''Why buy real estate in a flat market?'' That is the essence of a question my airline seatmate asked me after he learned I invest in and write about real estate. But rather than answer his question directly, I asked him, ``Do you own your home?''

''Of course,'' he replied. Then I followed up by asking him the benefits of owning his home. As I recall, he listed security, pride of ownership, tax savings, market-value appreciation, building equity, investment safety, no rent increases, and perhaps a few I forgot.

My seatmate then asked me if I thought he and his wife should sell a rental house they own in Arizona. They seem to be having problems keeping it occupied by reliable renters since it is about 1,000 miles from their primary residence. But then he quickly added, ``Our problem, if we sell, is we would owe tax on at least $75,000 of profit.''

Although I pointed out the current low federal long-term capital gain tax is a maximum of only 15 percent, my new friend seemed highly averse to paying taxes. So I suggested he make a tax-deferred exchange for a rental house close to his residence so he can better manage it.

• Major tax savings from realty investment property. Although the high, runaway-market-value appreciation rates of the last few years for residential properties has shifted to a ''plateau'' in most cities, long-term realty investing still provides major tax benefits for owners who ''materially participate'' in operating their properties.

Although federal tax law requires ''material participation'' by investors who want maximum tax savings from their realty investments, they can still delegate day-to-day operating details to a property manager. Owners who make the major decisions, such as setting rents, establishing rental rules and authorizing major expenditures, easily qualify.

However, an investor who owns less than 10 percent of a property partnership does not qualify, nor do owners of REIT (real estate investment trust) stock and owners of vacation homes who have their properties in ''rental pools'' managed by others.

Investors who meet the ownership and material participation tests can deduct up to $25,000 of their ''passive activity'' investment property tax losses from their ordinary taxable income up to $100,000 annual adjusted gross income (AGI). For realty investors with AGI between 100,000 and $150,000 the tax loss deductions, the deduction gradually phases out to zero above $150,000 AGI.

Fortunately, most of these so-called tax losses are not actual cash losses. Instead, they are ''paper losses,'' usually from the depreciation tax deduction for estimated ''wear, tear and obsolescence'' of the building.

Residential real estate is currently depreciated over 27.5 years, and other realty is depreciated over 39 years. Personal property used by tenants, such as appliances and furniture, has a much shorter depreciable useful life. But land value is not depreciable.

Investors who find they can't offset their rental property tax losses against their AGI must ''suspend'' those unused losses. IRS Notice 88-94 says these unused suspended losses can be used in future tax years on an aggregate basis, rather than property-by-property, when selling.

• How to claim unlimited investment property losses.

There is a little-known, perfectly legal way to claim unlimited investment property losses against your AGI regardless how much you or your spouse earns. The solution is to become a ``real estate professional.''

Real estate brokers, realty sales agents, property managers, builders, contractors and leasing agents clearly qualify if they work at least 750 hours per year (about 14 hours a week) on their real estate activities.

However, realty investors also can qualify as ''professionals'' entitled to the unlimited investment property deductions against their ordinary income if they spend at least 750 hours per year on their investment activities. Either spouse can qualify. A real estate sales license is not required.

For example, suppose a married physician's AGI is $500,000. Normally, he would not be entitled to any property loss deductions because his AGI exceeds $150,000. However, if his wife manages their real estate properties from their home and she spends more than 750 hours annually supervising the properties, making management decisions, inspecting properties for possible purchase, and supervising property sales and exchanges, they qualify. The result is the physician and his wife can claim unlimited property loss deductions from their properties because the wife qualifies as a ``real estate professional.''

• How to avoid tax when selling investment property.

Although most investment real estate offers many benefits already listed, when the property is sold, Uncle Sam (and most states) are waiting to collect capital gains tax. In addition, Uncle Sam imposes a special 25 percent ''depreciation recapture'' tax for the portion of capital gain attributable to depreciation deductions enjoyed by the owner.

However, there are several ways to avoid these taxes. The ''ultimate tax shelter'' is to die while still owning a depreciable property. Uncle Sam will be so distraught upon learning of your death he will waive any capital gains and depreciation recapture tax that would have been due if you sold the property before you died.

But a more acceptable way to avoid capital gains and depreciation recapture tax is to make a tax-deferred Internal Revenue Code 1031 exchange for another investment or business property of equal or greater cost and equity. Personal residences are not eligible. But cash or ''boot'' such as net mortgage relief taken out of such an exchange is taxable.

However, savvy investors can make a tax-deferred IRC 1031 trade of their rental property for another qualifying rental property, perhaps an ultimate ''dream home,'' and later convert it into their personal residence. Most tax advisors recommend renting the acquired property at least 12 months to show rental intent.

After owning the acquired rental property at least 60 months, 24 months of which it is occupied as the owner's principal residence, then the owner can sell it and claim up to $250,000 tax-free profits (up to $500,000 for a qualified married couple filing a joint tax return in the year of home sale), thanks to Internal Revenue Code 121.

Owning real estate investment property provides many tax benefits, both during ownership and at the time of sale or tax-deferred exchange. Most rental properties appreciate in market value over the long term and offer many additional tax benefits. Ask your tax advisor for details.

Weekly Market Activity Report

As the Twin Cities housing market inches closer to the active spring season, seller activity is not matching the white-hot records of 2006 but still remains ahead of previous years in this decade. New listings for the week ending February 10 were 7 percent behind the same time in 2006. New construction comprises 14 percent of this new inventory and will account for a lower market share in the coming months as existing homes are placed on the market more heavily in the peak spring and summer buying seasons. Buyer activity remains relatively quiet but anecdotal comments from brokers and agents indicate that buyers are out looking earlier this year. That said, pending sales for the week ending February 10 were 11 percent behind the same time in 2006 and 22 percent behind the same time in 2005. Temperatures in the Twin Cities were unreasonably frigid for that week—an average of 10 degrees below historical norms—and may have helped to depress buyer activity further than market conditions alone would have. Historically low interest rates are still combining with flat home prices to improve affordability and draw buyers back into the fold.

Wall Street Journal on Zillow

Recently I blogged about Zillow. (I'm for it...something that is rare in my profession.)

Here's the Wall Street Journal's take:

In the year since its launch, Zillow Inc. has made millions of Americans familiar with computer-generated estimates of home values, created a new online addiction and become a staple of dinner-party chatter.

But just how accurate is it? A Wall Street Journal analysis of 1,000 recent home sales shows that Zillow's "Zestimates" often are very good, frequently within a few percentage points of the actual price paid. But when Zillow is bad, it can be terrible -- off the mark by more than 25% on one in 10 homes. In one case it was off by $2 million.

Zillow, based in Seattle, operates a Web site that offers free estimates and other online tools for real-estate buyers and sellers. It draws revenue from online advertising.

More HERE.

Real Estate Market Shows More Signs of Recovery

Home sales slump slows; buyers still in charge

Home sale prices dipped slightly last month, while the decline in pending sales was less severe than in previous months. Interest rates remain low.

Although the spring market housing market isn't going to break any records, it is showing some signs of recovering from the deep doldrums of late 2006, according to data released Monday by four Twin Cities-area Realtor associations.

The most telling indicator of what to expect in the coming months is pending sales for January, which were down 6 percent from January 2006, compared with double-digit declines during much of 2006. That's about 600 fewer transactions than were posted when the market peaked in 2003 and still within historical averages.

Pending sales are signed purchase agreements for transactions that have not yet closed.

Deb Greene, president of the Minneapolis Area Association of Realtors, said she expects that sales pace to continue into the year. She's seeing increasing open-house traffic and more buyers who dropped out of the market last fall getting back into the market this spring.

"I think we're in a rebound year now," said Greene, who confesses to being an optimist. "We're getting into a more accessible marketplace, which is much ... healthier."

What's bringing the buyers back?

In part, fear of missing near-record low mortgage interest rates, which rose slightly last week. At the beginning of January, the average rate on a 30-year fixed-rate mortgage was 6.18 percent, according to mortgage funder Freddie Mac. That number rose to 6.28 percent on Thursday.

The increase caused the housing affordability index to fall slightly to 137. That means that the median family income is 137 percent of the necessary income to qualify for the median-priced home with a 20 percent down payment and a 30-year fixed-rate mortgage.

"Buyers are finally realizing rates aren't going to stay where they are forever," Greene said.

Buyers have more choices than ever, too. Inventory remains at record highs, but the increases have been much more moderate than during most of 2006, when monthly listings jumped as much as 40 percent.

Last month, the number of new listings was up 5 percent. That, too, is relief from the double-digit increases during 2006, but it was still the highest number of new listings added during January since the boom began six years ago.

Prices, too, have been relatively favorable to buyers. During 2006 the median sale price of houses sold through the Regional Multiple Listing Service rose only 0.5 percent. January's median price, $225,000, was down 1 percent from January 2006.

Steve Hyland, president of the St. Paul Area Association of Realtors, said in a prepared statement that while the overall median price of active listings remains consistent with the past 12 months, the median price of pending sales is the lowest in two years.

"Sellers appear to be much more motivated than we've seen in previous months," said Hyland, broker-general manager of Split Rock Realty in Edina.