Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR (Minneapolis Area Association of Realtors)

As the home sales slowdown continues in the Twin Cities housing market and throughout the country, slowed inventory absorption is keeping the number of homes for sale at record levels in July. There are currently over 35,000 residential properties for sale in the 13-county metropolitan region, up 12.0 percent from this time in 2006 and 56.7 percent from this time in 2005. The rise in inventory this year has less to do with new construction projects, as builder inventory has actually declined from this time in 2006 by 600 units.

Seller activity remains flat, with new listings for the week ending July 21 falling behind the same week last year by 0.5 percent. Buyer activity is even slower, with the number of newly signed purchase agreements declining by 10.2 percent for the same time period comparison.

June Prices Rise, Existing-Home Sales Decline

Sales of existing homes fell in June with some potential buyers staying on the sidelines, but prices rose modestly as inventories eased, according to the NATIONAL ASSOCIATION OF REALTORS®.

Total existing-home sales — including single-family, townhomes, condominiums, and co-ops — declined 3.8 percent to a seasonally adjusted annual rate of 5.75 million units in June from a downwardly revised level of 5.98 million in May. Existing-home sales are 11.4 percent below the 6.49 million-unit pace in June 2006.

“Two bright spots in the June report are a decline in housing inventory and a modest gain in home prices,” says Lawrence Yun, NAR senior economist. “Although we’ve seen seasonal month-to-month price increases over the past four months, this is the first time in 11 months that the median home price is higher than the year-ago price.”

The national median existing-home price for all housing types was $230,100 in June, up 0.3 percent from June 2006 when the median was $229,300. The median is a typical market price where half of the homes sold for more and half sold for less.

Meanwhile, total housing inventory fell 4.2 percent at the end of June to 4.2 million existing homes available for sale, which represents an 8.8-month supply at the current sales pace, the same as a downwardly revised 8.8-month supply in May.

Consumer Reluctance

Yun says some consumers are uncertain about the current real estate market.

“Home buyers have been getting mixed signals about the housing market, which is causing some of them to hesitate,” he says. “Mortgage interest rates have risen recently, and tightening lending standards are continuing to hamper sales, but fewer risky loans will put the market on a healthier path. Although general buying conditions remain favorable for long-term home buyers, it appears some buyers are looking for more signs of stability before they have enough confidence to make an offer.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.66 percent in June, up from 6.26 percent in May; the rate was 6.68 percent in June 2006.

NAR President Pat V. Combs says that local market conditions vary widely. “Consumers should avoid making decisions based on what they hear about the national market because all real estate is local,” she says. “There are pockets around the country where home sales are quite strong."

They've Fallen, and they Can't Get Up (yet)

More CHEERY News from the National Association of Realtors and CNN/Money:

Sales of U.S. existing homes dropped 3.8% in June to a seasonally adjusted, annualized rate of 5.75 million units, the lowest sales pace in nearly five years, even as frustrated sellers pulled their homes off the market by the thousands.

Sales of single-family homes plunged at a 30% annual rate in the second quarter, the steepest decline in 28 years, the National Association of Realtors said Wednesday. Sales of single-family homes were down 12% in June compared with a year earlier.

Even with a significant 4.2% drop in the number of homes for sale, the supply remained at a 15-year high at 8.8 months' worth of sales.

"The numbers were not terribly surprising, but they were somewhat disturbing, " said Mike Schenk, senior economist for the Credit Union National Association. "The slump in housing will be longer and deeper than advertised."

Economists surveyed by MarketWatch had been expecting sales in June to fall to a 5.90 million annualized pace.

"While weaker than expected, the sales pace and the underlying data within the report are probably no worse than what was feared," wrote Tony Crescenzi, chief bond market strategist for Miller Tabak & Co. "If the housing market is to recover from its current woes, inventories must fall."

"This is a pretty good time to buy or sell a house," said Tom Kunz, chief executive of Century 21, the nation's largest realtor.

Kunz said people in the market to buy homes have good jobs, rising incomes, affordable interest rates and a plentiful supply of dwellings to choose from. " We're going to start telling consumers the other side of the story," he said.

The "other side of the story?" Hmmmm....you would think with all these reports that people's homes would be selling for half of their listed price. In reality (Realty reality, say that 5 times fast) most sales I am seeing are closing within 3% of the Listed Price.

I am seeing sales occur within 12 days of the listing hitting the market.

I am seeing competitive offer situations.

Am I seeing things? Perhaps. But the truth is that all of this is happening if the Sellers are willing to price their homes at a point where the market (i.e. the Buyers) says they are willing to pay.

Granted this is MUCH easier said than done. I have talked to some Agents over the past few months who have suggested using a dart board to set the price on their listings. And these are Agents with 20+ years in the biz. Pricing has always been more of an art than a science, now more than ever.

I guess the one bit of advice I would give every Seller would be to listen intently to the feedback they are getting from Buyers and their Agents regarding price and condition.

The unfortunate reality for some Sellers is that both options can take a chunk out of their bottom line. It seems rather ironic that more Buyer's aren't out there reaping these rewards. My guess is that by the time they start jumping back in with both feet, the pool might already be dry, and another cycle of rising prices will follow.

It always does.

Do you Trust YOUR Gut?

No Housing Recovery until 2009?!

Countrywide Mortgage Head Honcho has this to say recently:

Countrywide Financial Corp. Chief Executive Angelo Mozilo said the U.S. housing market is unlikely to recover before 2009, as lenders and homeowners work through oversupply, stagnating home prices and the excesses of recent lax lending standards in much of the mortgage industry.

"It just takes a long time to turn a battleship around," Mozilo said on a conference call discussing quarterly results for Countrywide, the largest U.S. mortgage lender. "This is a huge battleship, and we're headed in the wrong direction."

Calling it "a gut feeling," Mozilo said, "It's going to take the balance of this year to get this thing to look like it's slowing down (and) 2009 to head into the other direction."

Anyone have any Pepto?

Weekly Twin Cities Real Estate Market Activity Report

Here's the latest from MAAR:

Following the annual Independence Day break, the Twin Cities housing market rebounded the week ending July 14. Seller activity shot up almost 900 units from the previous week. There were 2,720 new listings on the market, down 4.2 percent from the same week in 2006. Buyers also returned from their holiday siesta, writing 893 new purchase agreements. While this is an increase over the previous week, it is behind last year at this time by 17.2 percent as the market remains in a relative power nap.

Buyers May Like Cool Summer Prices

Head NAR Number Cruncher Lawrence Yun recently outlined several good reasons why Buyers might be wise to take advantage of the current lull in the market:

There may be good news on the horizon. A multitude of signs suggests that third-quarter existing-home sales will be better than resales registered in the second quarter of this year. Still, an added element of uncertainty regarding tightening lending standards makes it difficult to say definitively if the third quarter can close out with an improvement. I will go out on limb, however, and say that by the fourth quarter, existing-home sales will indeed show a marked improvement. May sales figures were low at 5.99 million sales (seasonally adjusted annualized rate). Closed sales in June and July could be similarly soft as pending home sales notched down for the third straight month. But several factors point toward inevitable improvement in home sales later this year.

Accumulating Pent-Up Demand

The country has added nearly four million new jobs since national home sales began to decline in mid-2005. And those job gains have not been a shift from high to low paying jobs. Rather, the typical worker’s wages have been rising by 7 percent, leading to a rise in aggregate national income by $1.35 trillion over a two-year time span. Further, non-labor wealth has also grown significantly. The Dow is hovering at record highs and the accumulated household wealth as of the first quarter of this year was also at a record high of $56.2 trillion. (That household wealth figure is likely even higher for the second quarter, for which official data has not yet been released.) That is equivalent to four years of annual salary for all the workers in the United States. So, if you’re wondering if people have the financial wherewithal that enables them to purchase a home, they do.

Household formation, meanwhile, mysteriously slowed in the first quarter of 2007. Household formation typically grows by 1.3 million to 1.5 million per year. In fact, a recent study by the Harvard Joint Center for Housing Studies projected such a rate of household formation for the upcoming years. However, the pace of household formation has slowed to less than 500,000 in the first quarter of 2007 – down 70 percent from its pace in 2006. That is absolutely mind-boggling in a job-creating economy. People are doubling up - finding roommates or moving back in with their parents. Why? As mentioned, finances are not the problem for most people. Could it be that people are waiting to see how long the housing market will slump? A turn in psychology and confidence is hard to predict. But one thing is clear: pent-up demand has been accumulating.

Rents are Rising

People are hesitating buying a home. In a job-cutting region like the Detroit area, it is understandable that there is a lack of demand (though bargain prices make a tempting opportunity for those with long-term views). However, for the rest of the country, people are not buying. That means, aside from doubling-up, they are renting. Not surprisingly then, rental rents have been rising. According to the CPI measure on rents, average rents rose 8 percent in the past 24 months (May 2005 to May 2007) while home prices have been largely flat. Renters, feeling the squeeze of these higher rents, may begin to look seriously at ownership rather than put money into their landlord’s bank accounts.

Condos Making Modest gains

The condo market led the recent housing cycle. The condo market was the first to lead the housing boom and first to lead the slump. The condo market also experienced much wider up-and-down swings in relation to the single-family market. Since the beginning of this year, the condo market has been consistently outperforming the single-family market in both sales and price changes. Could that imply an early signal of an overall housing market turnaround?

Better quality mortgage products

Mortgage applications for home purchases (not refinancing) have been rising nearly 10 percent on a year-over-year basis since early May. This data from the Mortgage Bankers Association is not a perfect predictor of home sales due to sampling issues; the MBA’s Purchase Applications Index oversamples prime and FHA loan lenders and undersamples sub-prime lenders and measures applications and not approvals. In a tightening lending environment, more applications will get rejected, so there is likely an increased incidence of re-applications. Nonetheless, a rising applications figure implies consumers are seeking out better quality loan products rather than blindly accepting hidden and exorbitant costs of subprime loans. And better credit quality is certainly better for the housing market over the longer term.

Weakness in the dollar

A weaker national currency typically moves in tandem with rising interest rates. As investors pull out of dollar-denominated assets, including U.S. government bonds, long-term rates have to rise to prevent further exit out of dollar-denominated investments.
Recent months’ movements in the dollar and in long-term interest rates are testament to that logic. Despite that trend, however, mortgage rates are still attractive at around 6.7 percent. All the while the fall in the dollar has essentially dangled a huge For-Sale sign in front of foreign buyers. Europeans can now buy a vacation home in Florida at essentially a 15 percent discount.
How many foreign buyers will now be tempted by what is essentially a deep double-digit price reduction?

The Fed will cut rates in 2008. Inflation is still running at the high end of the Fed’s comfort zone. Nonetheless, inflation looks to slide as the year proceeds. Once consumer prices are well contained, that will provide the Fed with the opportunity to lower interest rates. Early 2008 is the likely time frame for a rate cut. Short-term rates will immediately fall as result. The long-term rates could modestly decline as well. Any help on rates is a positive development for the housing sector. So keep your eyes on the horizon. There are forces at play that will soon turn the U.S. housing market around. Buyers who make the commitment now are likely to be smiling this time next year.

Lenders No Longer Funding 2/28 Loans

It is getting harder and harder for people with less than stellar credit to get loans. The Fed is lurking and has pushed many Lenders to tighten their lending restrictions.

But now Investors, the driving force in the Mortgage Marketplace are seemingly unwilling to invest in these kind of loans.

Recently the Strib reported that:

Countrywide Financial Corp., Option One Mortgage Corp. and Merrill Lynch's First Franklin Financial unit told employees and mortgage brokers this week that they would no longer offer so-called 2/28 subprime loans, ones that carry a relatively low fixed rate for the first two years and then jump to a much higher, floating rate, often more than 10 percent.

A spokesman for Countrywide, the nation's largest home-mortgage lender in terms of lending volume, said investors' demand for such loans is "very, very limited." A spokesman for Wells Fargo & Co., the No. 2 mortgage lender, declined to comment on whether it was still offering 2/28 loans. Some industry executives believe such loans will become rarities.

Lenders sell most subprime loans to packagers of mortgage-backed securities and thus typically offer only loans that investors are eager to buy. Investors have soured on 2/28 loans over the past few months because of a surge in defaults. At the same time, regulators and rating agencies are pushing lenders to be more conservative in granting loans.

While I think people are probably doing themselves a disservice with these kind of loans, what isn't being reported that for some buyers this is the only option. After 2 years they often find themselves in a much better position whether through increased income or just improved credit, which allows them to refinance out of the 2/28 loan and into something better.

The 2/28 has given many people a much needed foot in the door. With this on the outs, more and more people will likely be left out in the cold...

Bean Hole Days & Upper Cullen Resort

Last week we went up north to the Upper Cullen Resort and stayed in a cabin just 14 feet from the lake. It was a great time up there. It is located just outside of Nisswa, Minnesota. It was the quintessential Minnesota Vacation -cribbage, BBQ, beach and beer.

One day we found ourselves in Pequot Lakes and there seemed to be some kind of Festival happening. Our suspicions were confirmed when one of the vendors explained that we were attending Bean Hole Days.

Yep. Bean. Hole. Days.

The put a pot of beans, in a whole, overnight, and then people apparently line up for blocks to eat them.

Needless to say we weren't able to come back the next day and sample those beans. There's always next year...I will have to get a Bean Hole Days t-shirt at the very least!

Weekly Market Activity Report

Here's the latest from MAAR:

Fireworks, fried food and family fun have once again conspired to drag down the Twin Cities housing market during the first week of July. With Twin Cities residents taking their annual break to celebrate Independence Day, new listings in the region took a swan dive for the week ending July 7—dropping 600 units from last week and 14.2 percent behind this week last year. Buyer activity also declined from the week before, but not as severely. Newly signed purchase agreements (pending sales) fell by only 200 units from the previous week and were actually ahead of last year at this time by 1.2 percent.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for the Housing Affordability Index (HAI) and the Housing Supply Outlook (HSO) for July 2007. The HAI took another steep and significant fall this month to 127, down 12 points in the last two months due to seasonal increases in mortgage rates and home prices. Affordability is essential to the long-term health and accessibility of our housing market, so it will be important to keep our eyes on the HAI in the months ahead. The HSO increased to 9.6 months, which means it will take the current supply of homes on the market roughly 9.6 months to completely sell through.

More STATS from MAAR

June 2005 to June 2007 year to date comparison:

	2005	2007	% Change
New Listings	52,414	59,717	+ 13.9%
Pending Sales	34,146	24,713	- 27.6%
Closed Sales	26,399	20,044	- 24.1%
Active Listings	21,613	34,630	+ 60.2%
Median Price	231,000	232,500	+ .6%
Sales to List Price	98.5%	95.7%	- 2.8%
Supply-Demand Ratio	3.67	9.36	+ 155%
Affordability Index	138	127	- 7.7%

Wow! The Inventory has increased 60% since 2005. That is amazing. But notice how the prices are holding steady - there is some ray of hope for Sellers. But right now there is 9 months worth of inventory! That means the competition for the available buyers is ferocious and will not likely fade very soon. Time will tell what this all means...

A Buyers' Market to Behold

Back from Vacation...Did you miss me?!?

A couple of interesting bits today...

Here's what the National Association of Realtor's new number cruncher Lawrence Yun has to say about the current market:

Buyers now have an overwhelming advantage given the wide selection of homes available in many markets, according to NAR's latest forecast. "But with profit margins coming under pressure, homebuilders will limit new construction well into 2008. This should help the overall inventory level to move steadily into a more balanced state," said NAR's Senior Forecast Economist Lawrence Yun. Existing-home sales are expected to total 6.11 million this year and 6.37 million in 2008, down from 6.48 million last year. Prices are likely to rise 1.8 percent next year after a 1.4 percent drop this year

Meanwhile today's STrib ran an editorial about just how bad (for Sellers) and great (for Buyers) the current market is:

These aren't the best of times for selling a home. Sales in the metropolitan area were down nearly 16 percent during the first half of this year, and the median sale price dipped 2.2 percent as sellers began to absorb the reality that their biggest investments may actually be losing value.

Unencumbered buyers, on the other hand, are having a field day with lots of houses to look at. Inventories stand at nearly twice the usual level, and interest rates remain favorable.

Given all of that, real estate experts have not dodged the obvious conclusion: that from a sales and production perspective, the local market has slipped into recession.

That's not as gloomy as it sounds. The public should factor in the unprecedented runup in home values that preceded the slump. Homes are still selling at prices higher than two summers ago. What's happening is a needed correction to irrational prices, excessive speculation and a sea of foreclosures against thousands of people tricked into buying homes they couldn't afford.

More HERE.

How does the Twin Cities stack up against other cities? Well, not so good at the moment...

WHERE HOMES ARE RETAINING VALUE

Percent change in median sales price of existing single-family homes from the first quarter of 2006 to the first quarter of 2007:

Seattle $380,000 +12.3

Portland $290,000 +8.9

San Jose $788,000 +4.4

Des Moines $146,000 +3.5

Chicago $267,000 +1.4

Omaha $134,000 +0.5

Atlanta $171,000 +1.2

Dallas $146,000 -0.6

Boston $387,000 -1.0

San Diego $595,000 -2.0

Denver $239,000 -2.0

Phoenix $263,000 -2.2

Kansas City $146,000 -2.9

Twin Cities $223,000 -5.2

Milwaukee $202,000 -5.8

Source: National Assoc. of Realtors

These things are cyclical. I have no doubt market will rebound and provide better footing for the Sellers but in the meantime, Buyers are WISE to take advantage of this lull to pounce on a great deal!

Now I better get unpacked...

ON VACATION...

SEE YOU NEXT WEEK!

More Good News for Buyers...

From today's Strib:

30-year mortgage rates drop

Rates on 30-year mortgages sank this week to a one-month low, while rates on most other mortgages also fell, good news to prospective home buyers.

Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 6.63 percent. That was down from last week's 6.67 percent rate and was the lowest since early June, when rates stood at 6.53 percent.

The moderation is welcome for people in the market to buy a home. In mid-June, rates on 30-year mortgages climbed to 6.74 percent, an 11-month high.

Renting Vs. Home Ownership (Chapter 1,000,000,000)

This guy was a "Renter." I'm just sayin'...

For the BILLIONTH time an article was published, this time in the Strib, detailing the pros and cons of Home Ownership versus Renting.

They summarized the Pros & Cons of renting as:

RENTING

Pros

More flexibility in moving.

Less maintenance required.

Opportunity to build credit and save money before buying.

Cons

Little or no flexibility in decorating.

No equity is built up.

No tax benefits.

Some additional parking fees might be involved.

They broke down the Pros & Home Ownership as:

BUYING

Pros

Ability to build equity.

Tax benefits.

Free to decorate and change landscape.

Cons

Less flexibility to move.

Responsible for property taxes.

Responsible for maintenance and work on the house.

Potential long-term commitment involved.

It's all well and good I suppose but as someone who at one time rented 7 places in 10 years, here's a few more pros & cons of renting.

1. DOG & CAT LOVERS
As a pet lover I found it EXTREMELY DIFFICULT to get DECENT RENTAL HOUSING that would allow me to have my dog(s). At present I have 2 Labs and a Basenji and a Cat. Two BIG Labs. I shudder to think how hard it would be to find a rental...oh and did I mention I have a 8 month old baby? Not that Landlords would ever discriminate against kids....oh no...NEVER!

2. SPONTANEOUS EVICTION
If you don't pay your Rent you get evicted. If you don't pay your Mortgage you face foreclosure. Neither one is a picnic. However, if you are month-to-month and your Landlord's sister suddenly wants to move into your place you could be homeless in 60 days. (This happened to me - in January - right after I had gotten out of the hospital for a gall bladder operation.) So if you do rent, make sure you have a SIGNED lease that affords you some protection.

3. TRAPPED!
The flip side to having a signed lease is the fact that you may want to move for a new job, a new love, a fresh start but you can't because some Moronic Real Estate Blogger told you to sign a lease...

4. I LIKE LOUD MUSIC
When I bought my first house I hooked up my stereo and turned it up. LOUD. After years of renting -duplexes mostly, it was LIBERATING to PUMP UP THE JAM without fear of someone banging on my floor or ceiling. Of course I try not to shake my neighbors windows when I get the urge to crank up Jay Z....not too much anyway!

5. PRIDE
I was surprised they didn't mention this as a Pro but in my experience the main thing First Time Buyers get when they buy their first place is an overwhelming sense of Pride. Buying a home is not easy. You have to jump through some hoops and you may be asked to make some financial sacrifices. But they don't call it the AMERICAN DREAM for nothin'. Owning your own home is something to be proud of and if you play your cards right you will create a tremendous nest egg for yourself.

6. A GOOD INVESTMENT
You have to look at owning your home long term to realize its full value. I was just talking to my neighbor yesterday and they were saying how this year their home that they have lived in for 20+ years will be paid off. Imagine that - FREE & CLEAR. If they were to sell they would get all of the $$....and that is a lot of $$! It doesn't happen too much these days and it NEVER happens when you rent. Sure you may get back a rent credit but you essentially lose all of your money to the Landlord. When you own it's like you are your own landlord - you are paying yourself.

Okay you got me...I am biased. I sell Real Estate. Obviously I think they Buying is better than Renting. But I am also honest when I say that not everyone is in a position, or has the desire, to buy a home, and that's cool. I respect that. I just wish I would have gotten on the ball when I was younger, as opposed to buying my first home when I was 31. If I knew then what I know now...and remember all work and no play makes Jack a dull renter!

"Honey! I'm Home!"

Airport Noise Lawsuit Open House Recap

A Standing Room Only Crowd Listens to Mayor Ryback and Class Action Lawyers

Your intrepid reporter was there! The setting: a rather charming and rather steamy church, filled to the rafters with a collection of concerned/agitated neighbors, all curious to learn what new information was available about the current lawsuits filed against the Metropolitan Airports Commission (the Strib has an excellent article recapping the story thus far - click HERE)

I think you really have to live in Nokomis to understand why this situation is such a sore subject. Back when the original agreement was made in 1996 and the decision was made NOT to relocate the Airport, the MAC agreed to provide noise insulation/mitigation for homes that were in the 65+ decibel range (Phase 1) as well as those in the 60-64 decibel range (Phase 2). These are all based on confusing and ever changing Noise Contour Maps (click HERE).

But a funny thing happened on the way to fulfilling there promise. Rather than insulate the homes in Phase 2, and sighting concerns for Northwest Airlines and the rising costs of "homeland Security" the MAC decided to renege on their contract/promise.

What they offered instead was to provide Central Air to a portion of the home affected who did not already have it as long as the homeowners would agree to pay for anywhere from 50-90%!

According Minneapolis City Councilperson Scott Benson the current gap between what the City is essentially asking for is HUGE. The City Estimates that the cost to insulate the homes in the areas that the MAC originally promised to be around $350 Million...and as I mentioned they are willing to pay half-sies on the Central Air which would cost them about $25 Million.

Enter the Class Action Lawsuit.

A small group of citizens started who were a bit dubious at the City's prospects for a successful and timely resolution to their lawsuit started a Class Action Lawsuit with a private law firm.

The good news is that at a pre-trial hearing the presiding authority, Judge Stephen Aldridge, emphatically ruled that the MAC violated it's promise and urged all parties: MAC, Northwest (who jumped in to protect their interests and help MAC fight off the public/city suits), The Cities, and the Class Action to enter into Mediation and settle the suit before it would go to trial.

People were jumping for joy - the people had won!

Only we didn't.

Because it now appears the Lawyers for MAC & Northwest were able to devise a rather sly "Divide and Conquer" strategy. They have reached a Preliminary Settlement with the Class Action Lawsuit wherein approximately HALF of the eligible homes would be given Central Air and $1,750 for additional noise insulation IF they did not already have it. (If they already have it and have had it installed in the past 5 years AND they have receipts they might get reimbursed for a portion of the installation costs.)

Needless to say the Class Action Attorney who was allowed to speak at last night's meeting was not necessarily greeted as a Liberator. There were no flowers and candy. In fact, you got the sense that Mayor R. T. was not only having a hard time controlling his own frustration but he seemed keenly aware that the meeting could easily devolve into a shouting match if he weren't there to keep things moving in a civil direction. I have to say I was impressed with how he handled things.

To her credit the Class Action Attorney knew that she was not the most popular kid on the block and she made her case - that the proposed class action settlement would at least guarantee some relief fir some people without having to risk getting nothing if the case were to go to trial.

Rybak clearly bristled at this and seemed to really believe that the City had a great case. But because he and the City are apart of this ongoing lawsuit his hands were kind of tied. He could provide information but he could not offer advice on how the residents should proceed.

Should the City agree to a settlement, similar to what the Class Action people have in place, even if it means many people will be excluded?

Should the City continue with its suit, which will likely be appealed and held up in litigation for several more years, at risk of ultimately losing and getting nothing?

As residents, we are going to be offered a choice in the coming weeks. The way the Reps from City Hall put it last night, if we agree to accept the Class Action Settlement we are excluded from any remedy that the City's lawsuit might bring.

It's like Deal or No Deal, only with Mayor Rybak serving as a much less annoying version of Howie Mandel.

The sad thing about all of this to that everyone can plainly see that the MAC has not lived up to its promise and now neighbors are going to be pitted against each other so that they can escape their obligation.

The entire thing just seems so unfair. I realize that people in other parts of the city might think that we who chose to live near the Airport knew what we were getting into when we moved here. "Duh! You live near the Airport. There will be noise!" and I understand that sentiment...to a point. But I know when I moved into Nokomis that there had been this promised made, that in the future my home would be eligible for the noise insulation that my neighbors - ACROSS THE STREET - have. It was one of (but certainly not the only) reasons why I purchased the house.

I am sure I am not alone in that predicament. It will be interesting to see where all of this will ultimately end up. At this point the City is actively seeking comments from residents so that they can decide what course to take The Class Action is continuing to work out the details on their settlement. And the residents are all left scratching our heads (and plugging our ears) wondering what will happen next.

Stay tuned. I will keep you updated on this story.

Weekly Market Activity Report

Here's the latest from MAAR:

Home sellers in the Twin Cities housing market continue to face a harsh reality: There are too few buyers for the number of homes on the market. Buyer activity remains at levels consistent with the start of this decade, with 871 units sold pending for the week ending June 16—19.6 percent behind the same week in 2006. Builders and home sellers appear to be getting the message that now is a difficult time to sell as they have scaled back new listings relative to a year ago, but year-over-year declines in listings are not keeping pace with larger declines on the buying side. Weekly new listings are down 7.0 percent compared to this time last year.

The message not being heard by buyers is that now may be the time to buy. With plentiful inventory, reasonable interest rates and slightly depressed home prices, consumers may look back and see 2007 as the bottom of the market—the year they should have purchased a home.

PRIDE Weekend & Some Good Link Updates!

Had a great time at the PRIDE Block Party this Sunday. It was a bit HOT but we danced a bit (daughter Lily and I) nonetheless! What a HUGE event that has grown into...pretty amazing. Its this kind of thing that makes me really proud to be a resident of Minneapolis!

In other news...

Here's the Latest on the Airport Noise Lawsuit.

I will be at the Public Meeting this Wednesday and I will report back here what I learn.

An interesting article here in the Strib -Pushing Homes Out of Reach? - highlights the dilemma we are facing as it becomes more and more difficult to find financing if you are a sub-prime borrower.

And just to clarify sub-prime doesn't mean you necessarily have bad credit or are some sort of high risk - it simply means you don't fit into the cookie cutter molds that many lenders are looking for - and that quite frankly seems rather unfair to me!

IT JUST DOESN'T MATTER - Summer is Here!

I got a sixty-nine Chevy with a 396
Fuelie heads and a Hurst on the floor
She's waiting tonight down in the parking lot
Outside the Seven-Eleven store
Me and my partner Sonny built her straight out of scratch
And he rides with me from town to town
We only run for the money got no strings attached
We shut `em up and then we shut `em down

Tonight, tonight the strip's just right
I wanna blow `em off in my first heat
Summer's here and the time is right
For goin' racin' in the street

For some reason, the first day of summer always reminds me of this song, Bruce Springsteen's classic "Racing in the Streets".

Such a passionate, honest song.

Actually there are Three Things from My Youth that I equate with summer:

1. "Racing in the Streets" - Bruce Springsteen
2. "Schools Out for Summer" - Alice Cooper
3. "Meatballs" starring Bill Murray

Bruce for the passion, Alice for the ANGST and Bill for the love of the ABSURD.

That flick convinced me to get a job as a Camp Counselor at the YMCA Camp Pepin near my parents adopted hometown of Stockholm, Wisconsin.

It was a great decision and I really loved my time there. I remember my feet got so tan (well cherry red more likely!) that the flip flops I wore left left stripes on my feet. It was such a badge of honor.

And the biggest lesson I learned from "Meatballs"? "It Just Doesn't Matter!"

CLICK ON THAT LINK!

Hope you like the clips...and I hope you find your passion this summer!

Weekly Market Activity Report

Here's the latest from MAAR:

June is traditionally a busy time for the real estate community and the most recent reporting week is no exception, as Total Active Listings for the 13 County Metro area continues at a record level. While buyer and seller activity accelerated as compared to recent weeks, the Twin Cities market continues at a lackluster pace in comparison to previous years. Weekly Single Family New Listings are down 1.2% and Pending Sales are 17.8% below the same week in 2006.

The Impact of Rising Rates on Our Recovering Market

Recently rates have started to creep up again and the Strib interviewed Edina Realty Head Honcho Ron Peltier about the recovering local real estate market:

Edina Realty President Bob Peltier said that although the spring market was something of a disappointment, he's optimistic that the market is on the rebound.

"I was hoping it would have been better, but it was definitely a bump in the road," he said. "You could see it and you could feel it."

Open house traffic is up, buyers are making offers on houses that are priced right and there have even been reports of multiple offers on houses that "exude pride of ownership," he said.

He cited several recent examples of sellers who sold quickly or received multiple offers on their houses, including a $599,000 house in Eagan that got six offers within three days of being listed and a $1.1 million house in St. Paul that sold, within six days of being listed, for full price.

"Good homes, fairly priced and well taken care of, are selling," Peltier said. "But we have a lot of stale inventory that's had no price reductions."

Mr. Peltier was also asked his take on the impact the recent uptick in mortgage rates might have on the market:

Peltier said that rising rates could actually be a nudge for prospective buyers to act soon, particularly if the bond market continues to put upward pressure on mortgage rates, which haven't crossed the 7 percent threshold in several years. If that happens, though, the market will notice.

"A 7 [percent rate] will be a little scarier," he said, "But as long as there's a 6 in front of [the fraction] it's going to be okay."

I know one thing, Ron Peltier is one of the most respected minds in the Real Estate Biz and I certainly would not bet against anything he has to say. His vision and willingness to change with the times are one reason Edina Realty continues to lead the marketplace despite intense competition from other major brokerages, discount brokers, the Internet and a challenging market.

I rarely ever sing the praises of Edina Realty on this site but make no mistake, they are the best in the business and I am happy and privileged to plant my flag with them!