Notes on Real Estate

As of a report from the Minneapolis Area Association of Realtors, Twin Cities Pending Sales continue to top last year's record numbers. However, new listings in the 13-county area are running behind the same time period in 2004 for the 11th consecutive week. The number of Active Listings in the 13-county metro area has been relatively stable all summer; an indication the three year growth in listing supply may have run its course.
My take on this: The seller’s market is done. I think it has been for most of the summer. Other news indicates that the apartment rental universe is improving, both for sales of buildings and for a rise in occupancy and / or rental rate increase. Market Recovery. This means fewer people out there are buying instead of renting, and those who want to sell to starter home buyers have to wait longer to sell their home and move up.
This week's report includes an updated Supply-Demand Ratio (SDR) for August. A projected [note: “projected”] SDR of 3.68 means that there are roughly 3.68 homes for sale for every buyer expected to enter a purchase agreement in August. Or, for every home that gets bought, 2.68 stay on the market. I would think so. For agents listing homes, as the leaves begin to change, promises of quick sales would be optimistic, at best. This, you must note, is with the new listings running behind, as mentioned earlier.
This doesn’t mean people can’t sell their homes for a good return. It just means that things are slowing down. They always do this time of year, and now we have a slow-down on top of another.

Because we specialize in Southwest Minneapolis, especially when it comes to working with relocation people, we like to keep an eye on that territory. We like what we see.
For properties listed in South and Southwest Minneapolis since the beginning of 2005 here are the MLS statistics.

Number sold 397
Average list price $344,432
Average sales price $337,879
Average days on market 28.9

The housing market is still quite active with total number of sales at record levels. The supply of homes for sale is up 21.62% in July. We're seeing average market times in the range of 60 days.

Every week, it seems, the newspapers or TV news do something on "the bubble", or a related doom-in–real-estate story. If you notice, when they get most of the way into these, they end up having to quote really great statistics to prove that things are going to get bad. The implication: What goes up must come down (or burst upwards, or whatever). In the wake of the dot-com stock disasters, which almost nobody except value investment people had the brains to see coming, it’s easy to predict doom. Besides, on its own, doom is easier to forecast.
If I tell you the sky is falling, and it doesn’t, aren’t you glad? If I tell you the sun is going to shine, you pack your picnic basket and it rains, you’re out with the rest of the villagers with a stake, rope and kindling. It’s so much easier to say, “Boy, was I wrong! Well, here’s why, and aren’t you glad?” If you don’t believe this, you don’t watch the TV weather prognosticators.
I’m taking a chance here. I predict no doom for the metro real estate market. (No, I’m not saying that because I want you in the game. If I thought there was going to be doom, I’d show you how to buy properties to hedge against that. I believe you can win either way, and history shows this to be true. Never mind…) No doom! Less money without harder work for Realtors, yes. More early drop outs in our ranks, I think. (I like that.)

After 90 hours of class, passing the licensing exam, spouse Shelley is now a licensed real estate agent with Coldwell Banker Burnet, Minneapolis Lakes Office. All that remains for her to get her REALTOR® designation is a few more hours of orientation class at the Minneapolis Area Association of Realtors in September. As it now stands, she can legally do all the things a REALTOR® can, so long as she finishes her orientation within a prescribed time, which she will.
This adds to our effectiveness exponentially. All the more reason for you to recommend us to your friends and acquaintances. By the way, on that same note, if you know of someone who could use our assistance, aside from telling them to call us, let us know who they are. You can even say to them, “I know a couple Realtors I believe could be of help to you. Tom and Shelley Crone. Would it be okay if I mentioned you to them?”
You know where the pavement made of good intentions leads. You probably won’t get our name to them, and even if you gave them our cards (which you don’t have handy), they might not get around to calling. Do those things if you want, and then also get their names to us. I’d do the same for you. Just ask me to and see.

If you have an interest in finding out about the logic of using income properties as great investments, Bruce Colton and I will be resuming our seminars offerings in September. Two will be dinner hour sessions (with some sort of food included), registration at 5:45 and the session from 6:00 until 7:30 – September 14th and 28th. Two will be lunch sessions, 11:30 registration and 12:00 to 1:30 presentations – September 21st and October 5th. We will alternate locations between my Calhoun Professional Building and Olde Time Mortgage’s new building near Anderson Lakes Parkway and 169. Which place at which time is to be determined. E-mail me back if you’d like an invitation for yourself and others.

PLUS, let me know if you want to receive Investor’s Express, my emotionally stimulating and primary needs satisfying e-newsletter. My web site has all the back issues for both newsletters.

That’s it for now. Except this:

1. If you have interests or questions, please e-mail me or give me a call.
2. Check out my website HERE

The opinions expressed in this newsletter are solely those of Tom Crone and others being quoted and do not necessarily reflect the opinions of Coldwell Banker Burnet or its affiliates.