Current Real Estate Market Update for Minneapolis, St. Paul MN October 2011
The Twin Cities real estate market is experiencing a very similar transition phase in the housing market as recently reported by Ben Bernanke, Chairman of the Board of Governors for the Federal Reserve System. Ben spoke at the 2012 National Association of Home Builders International Builders' show in Orlando Florida.
He says that the economic recovery began more than two years ago, however most Americans would say that they didn't feel or experience the recovery. Particularly those Americans who's livelihood depends on the housing sector of living.
Twin Cities housing market has revealed parallel trends and conditions associated with the balance of supply and demand. For the past few years, the actual supply of single family homes greatly exceeded the effective demand of home buyers. The supply and demand ratios are reversing at a relatively blinding pace here in the Twin Cities. Numerous factors have impacted these transitions and they include: Record Housing Affordability Indexes, Record Low Interest Rates, increased amount of investors and investor activity (over 40% Cash Buyers), reduced number of pending foreclosures associated with the most recent re-finance programs for homes in a short equity position. The Federal Reserve and other bank regulators have utilized tools and programs to ensure that the banks have enough capital to cover mortgage losses while continuing to lend at such great r
The biggest mistake just about everybody makes on any financial decision usually involves doing their homework. The absolute same thing will likely happen to those considering investing in anything without investing the real estate market. Financial experts are beginning to see the reverse trends associated with both supply and demand and affordability indexes. A recent article titled, 'Buy a House, but don't overlook the details written by Kevin Storr opens with the following statement: Head buried in the sand? Money buried in your yard? Only one of those options is financially fatal today. The report is backed by financial experts at the Unversity of Alabama make statements like buying a $1,000 two month CD will make about 83 cents more than burying $1,000 in the sand.
The article goes on to say that most people don't take enough time to do their homework and typically default to holding off on real estate decisions. I strongly recommend reading the rest of this story and making alliances with people who actually help with long term investment goals associated with real estate.
There was some hesitation in choosing to write about this topic until our most recent presentation we made for a local Condo Association in the Twin Cities. We're often invited by Condo and Townhome Associations to present a 'State of the Real Estate Market' presentation specifically associated to the Condo or Townhome association residents. We're also invited in to discuss their position to foreclose or not foreclose on their seemingly destined assets.
More often than not, the Association leadership is usually more concerned about appeasing their homeowners (particularly in a down market), than actually preserving or improving the residents ownership interests. Validating or justifying fees and potential fee increases also seems to be a very high priority. Yet, when it comes to any delinquent homeowners heading to foreclosure; many condo and townhome associations seem to leave a ton of opportunity on the table in both equity and reserves. We're helping more associations realize that foreclosures are not only a reality of the over-inflated market in the roaring 2000's; foreclosures can also be an opportunity for the entire common interest community. Part of the problem associations are experiencing with the somewhat over-correction on prices is that many Condo and Townhome Associations only focus on obtaining their rightful dues, penalties and potential assessments from the foreclosing firm when the asset is sold a
In the US, housing starts increased 1.1 percent to a 10- month high of 635000 at an annual rate in November, with CNBC's Rick Santelli. Hints of Improvement report from Minnesota here...
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Median Sale Prices Up during a Down Market in Ecco Neighborhood of Uptown Minneapolis 55408 (edit/delete)Fact or Fiction? No Fiction here. The data below clearly shows that there are actual improved median sales prices in certain neighborhoods and at certain price points. The info sparks chart below clearly show higher median sale prices on home sold in January of 2005 increased by approximately 14% since then. Yes increased median sales on homes price above $599,900. Homes priced between $449,990 and $599,900 basically held there own in the Ecco Neighborhood in Uptown Minneapoils and median sale priced homes between $290,000 and $449,900 also held their own during the last seven years. Only homes priced under $200,000 dropped in median sales price (mostly condos in this bracket).
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Did you know that according to the National Association of Realtors®, 40 percent of all investors in 2010 made less than $75,000 in annual income? With the right tools and information, we can help put real estate investing within reach of individuals who thought they couldn’t afford it. With prices and lending rates at historical lows, you can’t afford not to invest in real estate with our Nexus!
“In addition to strong returns on rental property, investors can anticipate solid home appreciation over the long haul ... the metrics on home prices in relation to consumer prices imply a 14% undervaluation. The metrics on home prices in relation to rental rates imply a 20% undervaluation.”
Also, "Rents rose at a better than 3 percent annualized rate in the third quarter of 2011, according to government data.”
—Lawrence Yun, NAR Chief Economist
The Real Estate Market has struggled over the last five to six years depending on where you live. However, the current under performing markets across the nation are particularly related to the 'tighter credit and mortgage' conditions which have held back recent buyer and consumer confidence in the marketplace.
The National Association of Realtors, "The Voice of Real Estate" and Lawrence Yun, Chief Economist have noted a sizeable pent-up demand based on important economic factors such as: population growth, employment levels and a doubling-up phenomenon that can't continue indefinitely. This demand could stimulate the market quicker than expected as these conditions improve in 2012 and beyond. More on the Housing & Economic Recovery here...
As the voice of real estate for housing stakeholders, the National Association of Realtors have been actively participating in the housing summit, advocating for practical solutions to bring housing back into a balanced state. So, yes, our economy is under-performing and yes every indication is that we're back to a new normal and aside from the 'ski-jump' that took place in the early 2000's, we have over 80 years of history showing consistent and predicatable appreciation in real estate across the natio
Congratulations, you've finally aligned yourself with an investor resource who does more than send you properties for you to figure out on your own if it's a good deal or not. There are so many opportunities out there they appear impossible to decipher whether it's a good investment opportunity or not.
Get started today with the website education or simply call to arrange your own personal Investment Strategy.
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