Area housing still stands tall

Market slower but still steady, industry sources indicate
By JENNIFER STOCKINGER
Staff Writer

The Brainerd lakes area's housing bubble has not burst.

The market has slowed down, but is still going at a steady pace, housing industry sources indicated in interviews Monday.

"We haven't seen a decline in home ownership," said Janie Weston, chief executive officer of the Greater Lakes Association of Realtors. "There are more people moving here and they are not just buying a second home. The market is still strong and the Realtors are real busy."

Weston said the prices of homes have either stayed the same or have increased.

"The prices on homes are not declining," said Weston.

David Ellingson, outgoing president on the Multiple Listing Service and the associate broker at RE/MAX Lakes Realty in Nisswa and Crosslake, said the real estate business was on fire for so long that the housing market may seem like it is declining, but it's not.

Ellingson said instead of seeing a 5 to 10 percent increase a year on the number of homes sold, they are seeing a 3 to 5 percent increase. He said the number of lakeshore properties that have sold has dropped about 5 percent.

Ellingson said the market value of homes is increasing and the homes are selling for a higher price. Ellingson said last week there were two homes for sale and one sold in three days. He said the second house, which was overpriced, will most likely be on the market for a year before it sells.

"If sellers really want to sell their house they need to price it right," said Ellingson.

Homes are not selling as fast as they used to, said Ellingson. He said the Minneapolis market went from selling a home in two days to selling in two months. The Brainerd lakes area went from selling a home in 30 days to 60 to 90 days.

"The buyers are more educated than they were five years ago," said Ellingson. "We are slowing down, but we are not decreasing."

Loran Knack of Century 21 Brainerd Realty said the market is not dropping, but it has softened. He said buyers are more cautious with their money today than they were before when buying a home.

Knack said the prices on homes have been increasing, but not at as fast of a pace as it has in previous years. He said people selling their home have an expectation that they can get more money for their home than the home's market value. Knack said homes that are sold at a higher price sit on the market longer than if the home is set at its market value.

However, Knack said property that is in demand, such as prime lakeshore property and commercial property along Highway 371, can be sold for a premium price.

Knack said the housing market also is strong because of the commercial businesses and the tourists coming to the Brainerd lakes area.

Becky Eckelman, branch manager of Wells Fargo Home Mortgage for the northern lakes market, said the market before was unbelievable and now the market is normal, stable and still strong.

Eckelman said the interest rates for financing a home on a 30-year fixed loan is still good. Monday's rate was 5.375 percent.

Jim Johnson of Positive GMAC Real Estate said the housing market has gone from a seller's market to a buyer's market in the past 10 months. He said the number of homes is abundant compared to the number of buyers and the homes are not selling as fast.

Johnson said the number of homes that have sold has dropped this year. He said they are selling 10 percent of the homes that are on the market a month.

Dale Johnson, also of Positive, said he is seeing more price reductions on homes for sale today than in the past.

Jim Eisler of Edina Realty in Baxter and Crosslake said his sales are up 100 percent. He agreed with Johnson that today it is a buyer's market. He said buyers are more knowledgeable today and if a home is in a good location and is reasonably priced it will sell quickly.

"Before there were two buyers for every house and today it is three to four houses for every buyer," said Eisler.

Eisler said there is a lot of construction in the Brainerd lakes area and many developers are building homes to put on the market.

"The number of homes built (by developers) is not out of whack (In today's market)," said Eisler.

Bill Rickmeyer, current president of the MLS, said the market is steady and that there is an inventory on homes in the $150,000 to $170,000 price range.

Twin Cities home sales strong in June

Home sales in the Twin Cities were strong in June, albeit not as strong as a year ago, according to statistics released Tuesday by the local realtors associations.

In June, 6,735 closed home sales were reported in the Twin Cities. That is down 4.4 percent from 7,047 in the same period last year, but still the second most in a month in the past six years.

The median sales price for a home in the metro area was $231,000 in June, up 5 percent from $220,000 a year earlier.

There were 6,721 pending home sales in the Twin Cities in June, up 3.2 percent from 6,510 the year before.

There were 10,003 new listings in June, down 2.6 percent from 10,267 the previous year.

"Overall, the picture looks great for the first six months of the year and sales are holding up to last year's pace," said Jim Reiter, president of the St. Paul Area Association of Realtors, in a statement. "Activity was strong in June and the pending sales reflect that."

The housing statistics, which include single-family homes, condominiums and townhouses, are based on the closed existing home sales as reported by the Regional Multiple Listing Service.

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What's Behind The Real Estate Back-Up

(WCCO) Minneapolis If you have a home on the market or are thinking about putting yours up for sale, you know times are tough.

As of today, 41,000 homes are for sale in the 13-county Metro area and, on average, they will sit on the market 50 days before selling.

One home in the Windham Park neighborhood of Northeast Minneapolis has a newly-finished basement, an added master bedroom in the attic and tiled countertops in the kitchen.

But even with all that and a location next to a school, Beth Werner and her husband can't sell their home.

And, they need to. They closed on their new home today.

"We'll be okay," Werner said. "Things will be a little tighter, but we'll be okay. Obviously, it's something we hope won't go on for very long."

It's a reality check for many homeowners.

"In 2002 and 2001 it was one to seven days and it was flying," said Colleen Ratzlaff LeBeau, President of Southern Twin Cities Association of Realtors.

Some realtors are telling sellers to drop their prices.

Refinancing is one reason sellers may be overpricing their homes. But just because the appraisal number on the paper says a house is worth something, doesn't mean that's what you can get someone to pay for it.

Werner and her husband have already come down $20,000 dollars and said they don't want to go any lower.

"We don't want to give this house away," Werner said.

Realtors said a house will usually be on the market for about 30 days, but 75 to 90 isn't unreasonable.