2009 craft talk
DESCRIPTION
Presentation to Minneapolis Breakfast Club on March 18, 2009TRANSCRIPT
Twin Cities Residential Real Estate 2009
Or what happened to my equity?
The good news
• 38,730 Homes were sold in 2008• Home prices are up 30.5% since 2000• Mortgage interest rates are at a 50 year low
of 5%• Homes haven’t been this affordable since
2003• FHA loans have down payments as low as
3.5%
Not so good news
• The number of homes sold decreased 33.5% from the 2004 peak
• Average sale prices have decreased 13.1% from the 2005 peak
• Qualifying for a mortgage has gotten much tougher, especially for self employed people
• 31.7% of all 2008 sales were lender mediated versus a historical 2%
What went wrong?
• Easy Credit• Low or zero down• ARM and/or Buydown
loan programs• 2nd Mortgages of over
100% of appraised value
• Expectation that home prices only went up
Lender Mediated Sales
Short sales• Sale proceeds do not
cover existing mortgage(s) and selling expenses
• Seller must prove “hardship”
• Bank takes less and gives clear title
Foreclosures• Pre-foreclosure
– Prior to Sheriff’s sale
• Redemption period– Generally 6-12 months– May be owner
occupied– Tenants
• REO (bank owned)
All Real Estate is Local
• Minneapolis (North, Camden, Phillips) and Brooklyn Center all had 59%+ Lender Mediated sales
• Edina had 8%, Minneapolis-Southwest had 12%, St Paul Mac/Groveland had 7.8%
• Price per square foot: Mpls-North $40, Mpls-Central $246, Metro avg of $121
Market Recovery
• $8,000 Tax Credit for 1st time buyers
• Mortgage workouts to reduce foreclosures
• Cities buying blighted properties
• City Ordinances regarding vacant buildings
Homes for sale
Fun Facts
• Highest asking price– $53,500,000
• Highest Sold price in 2008– $4,500,000
• Number or $1M Sales– 360 in 2008
– 461 in 2007
– 473 in 2006
– 502 in 2005
Craig and Susan’s Results
• 261 Listings to date• 298 Sales to date• Average of 40
Transactions per year (national avg is 11)
• Sale Price to List Price of 98.1% Lifetime
What’s new in the Biz?
• Virtual Tours• YouTube Video• Social Networks
– Facebook/MySpace– Linked In/Plaxo– Twitter
• Blogging• Texting/Mobile Web