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

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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

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

Buyers remain firmly in the driver's seat in the Twin Cities housing market, but sellers have begun to do a little backseat driving. Over the past three months, sellers have put 6.0 percent less homes on the market than they did for the same period last year. And for the week ending October 13—our most recent reporting period—they put 7.9 percent less homes on the market. While inventory is still at record highs and sellers are still competing for a smaller pool of buyers, signs of slowing seller activity are welcome news for an oversupplied housing market.

Newly signed purchase agreements (pending sales) for the last three months have declined by 20.5 percent relative to the same period in 2006, with the most recent reporting week seeing an 18.3 percent decline. The total number of active listings on the market has begun its annual autumn drop, with incremental dips each week for the last 5 weeks.

To get a simple and easy-to-understand look at overall conditions in the Twin Cities housing market, take a gander at our Monthly Indicators tool.

The Long View

Lawrence Yun, Chief Economist of the NAR has this to say about the current Real Estate Market:

“How much have real estate investors lost due to the housing market bust?”

That was the (highly loaded) question posed to me recently by a producer of one of the major evening news programs. The show wanted to run a story about the "pains" being felt in the market.

Hmm. Well, exactly how much real pain are we talking about? Let's look at a couple of examples. An investor who bought a property in Las Vegas five years ago would be ahead by $150,000; up $200,000 in Miami. The average investor nationwide – up $54,000. Only the recent buyers (flippers) who bought last year in few specific markets would have encountered a loss.

Not All Losses Are Created Equal
I’m not discounting the discomfort of those who lost big, especially lenders and hedge funds who had large exposures to subprime loans. Investors in homebuilder stocks have certainly experienced pains. But nearly all real estate investors who have a reasonable holding period are doing quite fine. Some of these fortunate buyers who got into the market several years ago will still consider a modest give back as a loss without considering the large gains reaped during the housing boom. That’s the nature of the human mind. A gain of $190,000 in Miami feels like a $10,000 loss considering that the gain had been $200,000.

A Home is Not a Stock Certificate -- Thank God!
Foreclosures are rising and construction workers are being laid off. REALTORS® are feeling the pinch as well. The median income of a typical REALTOR® has been falling due to the correction in sales transactions. However, consumers and homeowners who are in it for the long-term are once again coming out well ahead.

Because of the power of leveraging, $10,000 used for a down payment on a typically priced home in the United States at a typical appreciation rate of 5 percent will return $110,000 after 10 years. The same $10,000 invested in the stock market appreciating 10 percent annually will result in $23,600. No wonder the data from the Federal Reserve show consistent results year-after-year of the staggering difference in net worth between homeowners and renters. A typical homeowner had $184,400 in net worth versus only $4,000 for a typical renter.

The Spooky Thing
The lack of buyer confidence to enter the market has been the one principal reason in holding back home sales. Many would-be buyers are spooked of a possible home price decline. And the media is fueling that fear. Some of the most popular market gurus who offer their advice on television and other media say so. Caution is in order, however. As a recent Barron’s article pointed out, stock picks made by one such expert actually underperformed the market.

Opportunities to Seize
It’s also important to point out that times of crisis often turn out to have been times of opportunity in hindsight. With over four million net new job additions in the past two years– the time frame during which home sales have steadily fallen – a significant pent-up demand has developed. Home sales and home prices will be higher in 2008 compared to 2007. And, as with any investment, look longer term. Those investing in a home and keeping it for a typical holding period of six to ten years will likely see their investment pay off; those homes will have been a good investment.

As for stocks, they are not the enemy of real estate. Many REALTORS® own stocks. (So do many economists!) The latest NAR research on vacation-home buyers reveals that many of them rely on stock market wealth to fund that second-home purchase. Stocks and real estate both promote the importance of private ownership.

Where to Throw the Darts
Of course, with housing figures down, all eyes at looking to the stock market. Indeed, the stock market is at an all-time high. That's terrific in and of itself and reflects confidence in the U.S. economic outlook. Just be careful about taking specific advice from any hyper-emotional TV personality. Darts should not be thrown at publicity posters of any "mad money" host. You’ll likely have just as good of luck by reining in your emotions (and money) and throwing them randomly on the financial pages of your newspaper for your next stock pickings.

The Airport Noise Settlement has been APPROVED!

Minneapolis Approves

Airport Settlement

$127 million Agreement Provides Airport Noise Protection for 9,560 Metro Homes

Oct. 16, 2007 (MINNEAPOLIS) –Minneapolis Mayor R.T. Rybak today signed the unanimous City Council action to approve a proposed settlement that will provide significant and meaningful relief from airport noise pollution for residents in the cities of Minneapolis, Richfield and Eagan.

“More than 9,000 residents, most who live in Minneapolis, will now get significant protection from airport noise pollution,” Mayor Rybak said. “That was part of the original deal for expanding the airport more than a decade ago. When that promise was broken, we stood up for our citizens and today we delivered for those people who have waited too long for justice.”

“This forever changes the relationship between an airport and its surrounding neighborhoods that were ignored for too long,” Rybak added. “The airport is critically important to this city and state and we want it to succeed, but that success needs to be accomplished in partnership with the people and neighborhoods most affected.”

The settlement stems from an airport noise lawsuit brought in 2005 against the Metropolitan Airports Commission (MAC) by the three cities and the Minneapolis Public Housing Authority. The $127 million settlement provides $100 million more in noise relief than the MAC originally offered and is nearly double the amount in a proposed settlement of a separate class action lawsuit.

“This settlement has been a long time in the making and provides significant noise relief for the residents of South Minneapolis,” said City Council Member Scott Benson (Ward 11). “As with any compromise, it is acceptable but not fully satisfactory to either side. While not everyone who was promised full relief will receive it, this settlement provides more homes with more benefits sooner than any other alternative.”

“This isn’t about putting money into people’s pockets,” said City Council Member Sandy Colvin Roy (Ward 12). “This money will be invested into Minneapolis’ housing stock, which is an essential part of the city’s infrastructure. Sheltering the most affected residents from airport noise will stabilize parts of the community, and in the process will benefit the city as whole.”

Richfield and Eagan will consider the settlement at their respective city council meetings tonight. Mayor Rybak said that he looks forward to working with leaders in all three cities to communicate the impact of this settlement for the affected residents.

If approved by all three cities, the settlement also requires that three conditions be met:

Judge Stephen Aldrich must approve the proposed consent decree.
The Federal Aviation Authority (FAA) must sign off on the settlement no later than November 30, 2007.
Plaintiffs in the separate airport noise class action suit must structure the terms of their settlement in a manner consistent with the cities’ lawsuit, and this must occur within 90 days of the issuance of the judge’s consent decree.


The proposed settlement agreement between the cities and the MAC offers significant noise relief to airport neighbors. Specifically, the settlement calls for the MAC to:

Provide noise protection to homes in the 63-65+ DNL (day/night noise level) in the 2007 noise contour. There are around 450 homes in this DNL eligible to receive a 5 decibel noise reduction package. To reduce jet noise by 5 decibels inside a home, noise mitigation may involve air conditioning, wall insulation, new windows and doors, roof baffles, furnace, ductwork, etc. This work would occur between November 1, 2008 and December 31, 2009.

Install central air conditioning in one, two and three-family homes in the 60-62 DNL noise contour created in 2007 if they do not have air conditioning. These homes would also receive insulation and other noise mitigation improvements up to a value of $4,000 from a pre-established menu of possible improvements. Households in this noise contour that already have air conditioning would be allowed to select from a pre-established menu of improvements up to a value of $14,000. The noise protection menu to be established in the future would likely include items such as insulation, sealing and caulking, acoustical windows, etc. This work would be done between December 1, 2008 and December 1, 2012. This noise contour encompasses more than 5,340 eligible homes.

Install permanent, through-the-wall air conditioning units and acoustical air conditioning covers in apartment and condominium buildings in the 60-64 DNL noise contour. Roughly 1,930 units are located within this 2007 noise contour. This work would be done between December 1, 2008 and December 1, 2010.

Provide an estimated $6 million to cover the costs of noise mitigation work for homes located between the 2007 and 2005 60 DNL noise contours. This could include up to 1,835 homes. Reimbursement would only be provided for work done after the date of the settlement, not for past noise abatement improvements.

The noise mitigation work outlined in the settlement includes an inflation factor to cover rising costs for future work over the next five years. Additional terms of the settlement agreement call for MAC to pay $2.25 million to the plaintiffs for reimbursement of attorney’s costs.

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

Despite an environment of improving affordability, motivated sellers, low interest rates and a large amount of homes to choose from, buyer hesitancy in the Twin Cities and national housing markets continues. While enjoying a nice rebound from the previous tepid weeks, Twin Cities pending sales were behind this time last year by 20.9 percent for the week ending October 6. New listings on the market were even with last year for the same time comparison.

This week's edition of the MAAR Weekly Market Activity Report features an updated October 2007 Months Supply of Inventory figure of 9.9 months. This means that it will take the current inventory of homes on the market roughly 9.9 months to sell through completely. The largest growth in supply in the last year has been in the lower price ranges.

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New Monthly Market Update

Edina Realty now offers a concise, easy to digest Monthly Market Update. You can see the highlights above or click here for this months report.

One of Every 16 Americans is Buying a Home This Year

One of Every 16 Americans is Buying a Home This Year!

That really floor me when I read that stat! I had to repeat it! Also, according to the NAR's head number cruncher Lawrence Yun, 2007 will end up being the 5th highest year on record.

OK can you tell I am searching for a silver lining? Well, while I am at it here's a few more gems from Yun:

Mortgage Rates Will Stablize Favorably
Despite the headline news coverage of turmoil in the mortgage market, mortgage rates have actually been falling for borrowers who take out prime conforming loans. Because these borrowers account for the majority of home buyers, affordability conditions for most buyers have improved. FHA loans – the traditional financing vehicle for low-and-moderate income households – have also begun to build market interest and momentum. FHA loans offer very attractive rates nearly comparable to those of conforming loan rates and save homeowners a bundle – about $180,000 in lower interest payments over a 30-year loan cycle compared to high-interest rate subprime loans. A near-certain legislative change that will allow higher FHA loan limits in high cost areas will further free up the mortgage market to offer safer alternative products (i.e., FHA loans) and away from subprime loans. It is important to note, though, that subprime loans may make sense for some home buyers such as young couples with large income potential but little downpayment. But the subprime market share at most should be no more than 5% rather than the 20% market share of recent years.

While mortgage rates look good for conforming and FHA loan clients, the same is not true for jumbo loan borrowers. Without the backing of a guarantee by Fannie Mae and Freddie Mac, bond investors are shying away from jumbo loans. As a result, interest rates on these large loans have increased and will significantly hold back home sales in the high cost housing areas like California. The whiplash will be short-term, however. After sorting through the numbers, bond investors will likely conclude that jumbos are quite safe – even without the government guarantees. A million dollar borrower generally has solid credit and pays bills on time. Any temporary legislative change in raising the loan limit well above the current $417,000 or in permitting the GSEs to purchase jumbos loans to include in their portfolios will mitigate the crisis. (The median prices will artificially trend lower during the period of jumbo loan crisis just due to fewer higher priced home sale transactions).


Pent-Up Demand Will be Unleashed
Consider this – four million net job additions in the past two years during the housing market slump. Yet, home sales have fallen. As home sales fell, people doubled and tripled up because apartment rents increased at their highest pace in five years. These people are waiting to buy a home. Then there are the approximately two million marriages that occur each year. Those newlyweds are waiting to buy a home. About four million babies are born each year – forcing some families to consider trading up from a smaller house or condo to a larger one.

Homebuilders Take Heed
The inventory of both new and existing homes is at high levels. Builders have already cut back production and are encouraged to cut back even further. The market needs less inventory additions in a time of transition. Wall Street should and will punish any builders who add to inventory in the current market. Why build only to lose money on the home? With builders cutting back, inventory will fall. Some home owners of vacant homes will also consider the juicier rent growth and take their “empty” home off the market. In addition, many owners are in a no hurry to sell their home that they actually occupy (except perhaps for those in the few areas of the country that are losing jobs), and they may also choose to delay listing their home for sale or de-list it. Unleashing of that pent-up demand for home buying will also eat into inventory.

Drawing Down the Inventory
The law of (lower) supply and (higher) demand will then firm up home prices. The media will be forced to report on the price gains. Many potential buyers, with solid financial wherewithal, will regain confidence. The wheels of housing turn faster and faster. The full unleashing of the pent-up demand could mean about two million additional homeowners. Such absorption into the marketplace will bring down the current existing-home inventory of four million units and the new home inventory of one million units to a total of three million homes (new and existing) available for sale. That level of inventory equates to a 5-6 months’ supply – generally considered a balanced market condition.

Balanced Gains Ahead
As the housing market recovers, potential home buyers (both first-timers and repeat purchasers) will gain more confidence in the housing sector. This, in turn, will drive more demand for homeownership, helping to keep inventory at or slightly below market balance and spur additional increases in home price appreciation. In sum, a closing of the subprime market does not directly mean equally lower home sales. FHA/VA and conforming government-backed loans will pick up a large chunk of the former subprime market. The jumbo loan concerns will be mitigated over time with better market knowledge, and will be assisted by changes in legislation permitting higher loan limits. Pent-up demand is strong. Inventory will move in the right direction. Builders are assisting by holding back production. A market recovery in 2008. Back-to-the-historical norm in 2009.

Good News/Bad News -Less Buyers/Better Buys

This latest Press Release from MAAR addresses the most recent Market Statistics

Tighter Credit Standards, Typical Fall Slowdown Shrink Buyer Pool

Housing Affordability Improves

Minneapolis, Minnesota (October 10, 2007) – Tighter credit standards are a factor in the recent decline in home sales in September, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc. Buyer activity fell in an environment of abundant choice, improved interest rates and motivated sellers. Newly signed purchase agreements (pending sales) in September fell relative to the same month last year by 24.4 percent, posting 2,839 unit sales. Similarly, closed sales are down 22.6 percent for the same time comparison.

“The consumer’s interest in real estate is always strong, as evidenced by the popularity of real estate shows on television,” said Deb Greene, president of MAAR. “We see motivated buyers and sellers in our market, but at the same time we’re now experiencing a return to more traditional, stricter lending practices that were in effect before the boom.” Greene also stated that lenders are placing more scrutiny on appraisals, income, employment history, and other factors, which is resulting in reduced home purchasing power for some buyers.

Builders and sellers continued to pull back in response to the market. New listings in September were down 9.4 percent from September 2006, the eighth consecutive month of year-over-year declines in listings. Year-to-date, there has been 3.2 percent fewer homes placed on the market than this time in 2006. This is good news for thinning out inventory and returning to a more balanced market.

The median sales price in September was $225,000, down 2.1 percent from last year. The Percent of Original List Price Received at Sale also declined slightly to 94.2 percent. Nationally, home prices have increased for the first time in 13 months, according to the National Association of REALTORS®. “In this buyer’s market, sellers should listen to buyer feedback and the honest and frank pricing advice of a professional REALTOR®,” said Greene.

Interest rates are near 45-year lows and declined further in September, and the MAAR Housing Affordability Index improved to 131 in October—both encouraging signs. Improvements in affordability will help lay a healthier foundation for the eventual market turnaround.

Kevin Knudsen, president-elect of MAAR said, “We need to remember that there are still positive changes 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. A time of ‘crisis’ often turns out to have been a time of opportunity in hindsight.”

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

With consumer confidence in residential real estate in the doldrums, the Twin Cities housing market is seeing a new downward surge in home sales in recent weeks. For the week ending September 29, new purchase agreements (pending sales) fell from the same week last year by 33.1 percent. This is on the heels of a 26.3 percent drop last week vs. the same week in 2006.

The downward velocity in buyer activity appeared to have bottomed out in the first half of 2007, but August and September have shown further decreases as uncertainties in the mortgage industry have intensified. Keeping a close eye on real estate activity in the weeks ahead will give us an indication of where this road will lead. Thankfully, the decline in seller activity has also accelerated, with new listings down by 15.7 percent for the same time period.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for our Housing Affordability Index (HAI) and the Percent of Original List Price Received at Sale. The HAI increased 4 points to 131 due to a slight drop in interest rates and home prices. Affordability is essential to the future health of our market, so this improvement is greeted with optimism. The Percent of Original List Price Received at Sale dropped slightly to 94.2 percent, and should continue to decline as the annual winter slowdown creates additional short-term downward pressure on home prices.

Want to see how localized submarkets are being affected by the changing market? Take a look at "The 100," our free monthly market update tool for over 100 Twin Cities communities, including the interior neighborhoods of Minneapolis and Saint Paul. It has just been updated with new data through September.



Click here to access "The 100."