Notes on Real Estate

Weekly Market Activity Report - Minneapolis Area Association of Realtors

The Twin Cities residential real estate market shows no short-term signs of retreating from its ongoing shift in the buyer's favor. New listings for the week ending August 5 were up 20 percent over the same week in 2005, while pending sales were down 27 percent for the same time period. With inventory rising and buyers taking a pause, the average market time has increased to 71.2 days—up from the mark of 57 days posted at this time last year.

This is the way it is. Note: The Fed is no longer raising interest rates, and in large part due to the slowing in the housing industry. We are heading into autumn, the usual downturn for sales.

Here's my prediction for the next 6 months. Remember, nobody has a crystal ball. Regardless, looking back, you will find my predictions have been more than fairly accurate.

This slow down and shift to a buyer's market is a good thing. At the moment, many agents who just got licensed in the hope of making a killing in a hot marketplace may not agree, and be rethinking their career choice (which is also a good thing). It is a good thing because it signals the return to a normalized market.

It will take a while for buyers to stop thinking they have to worry about interest rates, realize that current rates are really good, and start buying again. It will take other buyers a while to realize that the shift does not mean they can bully sellers out of reasonable expectations for their home sales. It will also take some time for many sellers to wake up to the fact that they are overpricing their homes, that if they've established some decent equity they should be happy, period, and that if they really want to sell, they need to price homes accurately the first time.

Agents should endeavor to help both buyers and sellers to take these sensible positions; however, you have no idea how difficult it is to convince them if they have their mind set. And, the client is the boss.

The prediction is that by February, 2007 the first signs of a normalized market will be showing, prior to the spring market. Not everything will be coming up roses next spring, as we may have to see the above mentioned process work its way through most of that season for the realities to sink in.

Oh, and the Vikings will win the division but not get to the Superbowl, which is good news and good news, as that's a really nice first year for the "new" team, and who'd want to see them lose yet another Superbowl. (Hey, as long as I was making predictions …)

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.