2010 Craft Talk

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Twin Cities Residential Real Estate 2010 Oh where or where has my wealth gone?

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Current state of Mpls St.Paul Residential Real Estate Market

Transcript of 2010 Craft Talk

Page 1: 2010 Craft Talk

Twin Cities Residential Real Estate 2010

Oh where or where has my wealth gone?

Page 2: 2010 Craft Talk

The good news

• 45,185 Homes were sold in 2009 (up16%)• Home prices are up 9.8% (since 2000)• Mortgage interest rates are at a 50 year low

of 5%• Homes haven’t been this affordable since

2001• FHA loans have down payments as low as

3.5%, Conventional are 10%

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Not so good news

• The number of homes sold decreased 22.4% from the 2004 peak

• Average sale prices have decreased 28.4% from the 2006 peak

• Qualifying for a mortgage has gotten much tougher, especially for self employed people

• 43% of all 2009 sales were lender mediated versus a historical 2%

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Current State?

• 25,000 agents to 15,000 agents

• 5% 30 year rates• $8,000 Credit for 1st

time buyers til 4/30/10• $6,500 Credit for 2nd

time buyers til 4/30/10• FHA is dominant form

of financing.

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Lender Mediated Sales

Short sales

• Sale proceeds do not cover existing mortgage(s) and selling expenses

• Seller must prove “hardship”

• Bank takes less (sometimes $0) and gives clear title to buyer

• 1099 “loss” to seller

Foreclosures

• Pre-foreclosure– Prior to Sheriff’s sale

• Redemption period– Generally 6-12 months

– May be owner occupied

– Tenants perhaps

• REO (bank owned)

• HUD (Fed owned)

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Lender Mediated Sales

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New Construction

• Industry consolidation: Lennar, Pulte/Centex, Toll, Ryland

• Smaller homes, Cheaper!

• Build to order vs Specs

• Town homes have slowed considerably

• Condo market is saturated, financing is an issue

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Other RE issues

• TH/Condo Assoc’s have financial problems

• Mortgage workouts to reduce foreclosures may slow process

• Cities buying blighted properties.

• City Ordinances regarding vacant buildings

• Tax values decreasing, mil rates increasing

• Cities offering their own incentives to buyers

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Market time

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Fun Facts

• Highest asking price– $14.9m (Garfield, MN)

• Highest Sold price in 2009– $8.85M (Lk Mtka)

• Number or $1M Sales– 238 in 2009

– 360 in 2008

– 461 in 2007

– 473 in 2006

– 502 in 2005

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Craig and Susan’s Results

• 284 Listings to date• 314 Sales to date• Average of 40

Transactions per year (national avg is 11)

• Sale Price to List Price of 98.1% Lifetime

• $200 Million+ Lifetime

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Craig and Susan’s Certifications

• GRI – Graduate Realtor Institute

• CRS – Certified Residential Specialist

• ABR- Accredited Buyer Representative

• CDPE- Certified Distressed Property Specialist

• Certified 1031 Tax Exchange Agent

• Relocation Certified with SIRVA, CARTUS, and others

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What’s new in RE?

• Virtual/Video Tours• YouTube Video• craigslist• Social Networks

– Facebook/Twitter– Linked In/Plaxo

• Blogging• Texting/Mobile Web• GPS tools