Real Estate. Economics. Business
I don’t remember the last time we saw listing prices in the low $500,000′s but this has become a REAL bargain for anyone considering moving in to Foxberry.
The home was built in 2000 and has 5BR/4BA/3GAR on a huge 1.18 acre lot located in a cul-de-sac. Come and take a look. It’s not likely to last long at this price.
Contact me if you’d like to see the home.
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This has not been confirmed, but it doesn’t surprise me if it is true, but the Minnesota Legislature is considering as part of its giant tax increase bill, a provision that would either eliminate or reduce the amount of mortgage interest you may deduct on your taxes. The are also looking at eliminating or reducing the deductibility of property taxes as well.
Everyone’s going to take a hit from the Minnesota Legislature. It’s just a tough one to think they are going to continue to hit sellers while they are being badly bruised already by a difficult market.
I’ll publish more information as I hear what’s going on.
RE/MAX Results just released its new real estate web site at www.Results.net.  The search functionality is terrific and I find it particularly interesting to look at the map view where every property that is for sale has a blue dot.  They have worked very hard at building the best site in the Twin Cities in an effort to produce a better site than Edina Realty which many in the industry say is the best site locally. It will be interesting to get the market feedback on the new site.
Fannie Mae and Freddie Mac – government owned entities that drive the mortgage market – have issued more new guidelines for appraisals according to this LA Times story. While the paper takes the point of view that this will be more trouble for buyers, and it most certainly will be, at the end of the day, it’s going to bring more challenges to sellers.  The more hurdles there are for buyers, the bigger the challenges will be for sellers to sell their homes.
Bottom line…think of the appraisal business like an HMO or insurance company for the medical business. Everything will now go through a third party administrator who will act as an “objective” judge of value.  Of course just like in health care, when you force everything through a third party administrator, the costs go up. Appraisals now must cost $455 mandated by the government. If you were able to find an appraiser who would do it for $325-$350 too bad. It’s now going to cost the buyer $455 if you want to have the possibility that the mortgage might eventually be able to be purchased by the taxpayers through Fannie Mae and Freddie Mac.
It’s unclear where the additional $100-$125 is going for each appraisal.
A fight broke out at 2am this morning at White Castle in Hopkins located at Blake Road and Hwy 7 in Hopkins near St. Louis Park. It looks like it might have been a gang related crime. Here’s the StarTribune story.
2 murders in 24 hours at fast food joints in the western suburbs of the Twin Cities. I hope this isn’t a trend!
The StarTribune is reporting this afternoon that a woman was killed today at a McDonald’s in Maple Grove and that the suspected killer was soon found dead due to self inflicted wounds according to police reports. This is a real shocker for this suburban community in Maple Grove. The StarTribune says it’s the first homocide in 8 years in Maple Grove. It seems like this might be a domestic crime issue rather than a random shooting.
Calculated Risk has an excellent synopsis of where we are on a macro level in the housing market in the U.S. Note the chart and analysis he has at the end of his article concerning the delta between new home sales and existing sales.  Existing sales have stayed afloat because of all the foreclosures and short sales.  New home sales are back to a 1960 level but existing home sales are only back to about 1998 sales levels.
Given some of the sales stats recently published by the Minneapolis Area Association of Realtors, it is not a pretty sight when we are seeing overall sales transactions for some cities down 15-25% compared to last year…see Plymouth, MN for Q12009 stats.  While inventory is falling in many areas, closed sales are falling faster. Until those two inverse, home prices will continue to slide.
This is one of those stories that most people won’t understand, but one of the things that makes the mortgage business work is being able to access warehouse lines of credit to fund mortgages. Warehouse lines had all but become extinct in the past year or so.
According to this Housing Wire story, GMAC’s ResCap is going to start to expand their warehouse lending practice. This is the kind of oil that lubes to financing business. This is encouraging news and while it won’t have an immediate impact, this is moving things in the right direction.
ResCap is a Twin Cities based mortgage company and they will be expanding their workforce by 1,000 people to handle the reviving mortgage business.  Unfortunately for Minnesotans, none of the jobs will be here in Minnesota. (I’m sure it would have nothing to do with this). They are looking to hire in North Carolina and Pennsylvania. For more details see this Bloomberg story.
Minnesota has historically significantly outperformed most of the U.S. with good employment numbers. Now in this recession, it looks like we played catch-up with the unemployment numbers in a hurry the past 6-7 months. Check out the steepness of the graph below.
Minnesota has some serious headwinds even once this recovery begins. My guess is Minnesota will lag the U.S. in recovery. The State budget is a train wreck although you just don’t know it yet. The problems are building and we will feel the drag in the Minnesota economy for the foreseeable future. On top of that, it’s too costly to do business here compare to other states.
To see how any state is doing compared to the national average, check out this site from the Indiana Business Bulletin for an interactive map.
The Twin Cities MLS announced today to Realtors that they will soon be implementing 3 new search fields in the MLS.  They expect it to go live within the MLS by next week Tuesday. There is a 3 week period where it remains in development so the staff can fix any bugs in the new search criteria. But after that, it will be made available to the public to search.
The list should be good, but not fully comprehensive. As agents, we will be required to get the okay from the property seller to be able to disclose if they are in a short sale situation or foreclosure.  We have 3 choices with each criteria and they are: yes, no and not disclosed.  If a property is upside down, the seller doesn’t have to disclose that they are in a short sale situation, but most do. It’s a courtesy to the buyers as well as the other agents.
For purposes of the MLS search, NorthStarMLS is defining foreclosure and short sales as follows:
“In foreclosure” defined as the homeowner being served official notice of foreclosure by a governing entity.
“Short Sale” defined as a transaction where title transfers where the sales price is insufficient to pay the total of all liens and costs of the sale; and where the seller does not bring sufficient liquid assets to the closing to cure all deficiencies.
This will be very helpful and help us all to get much greater visibility going forward as the the state of financially distressed homeowners in the Twin Cities.
