Housing market appears to be shifting

Is the Twin Cities now in a "buyers' market" for homes?

The facts are that homes, on the average, are sitting on the local market longer now than in recent years. Minneapolis Association of Realtors CEO Mark Allen puts it this way, "For home sellers when you were seeing houses sell in two weeks to four weeks time and now it's taking a couple months, it's a little bit of a change in expectations."

The director of the University of St Thomas Shenehon Center for Real Estate is cautious about calling the current market a "buyers market", "I think there's certainly an argument for that, just simply because the inventory of homes has increased," said Dr. Thomas Musil.

But, as in all things economic, it is not that simple.

Edina Realty's CEO, Ronald Peltier, says such talk may be premature, "might be nudging towards a "buyers' market" but it's premature to anoint this fall as the season of big real estate change."

The experts do agree on one thing, "It had been a seller's market for most of the past five or six years," noted Realtor Allen, "and it has gradually evolved over the past 18 months into more of a balanced market."

Dr. Musil added, "Compared to these feeding frenzy markets that we've been used to or that we've seen over the last five years," this market is balanced.

That "frenzy" has been propelled by low mortgage rates, which worries Fed Chair Alan Greenspan. On Tuesday he warned investors that, "History cautions that extended periods of low concern about credit risk have invariably been followed by reversal, with an attendant fall in the prices of risky assets."

But even if rates rise, Mark Allen doubts home sales will fall off much.

"There's every reason to believe that rates could increase 1 to 1 1/2 percent with little impact in the marketplace."

The real determination of a buyers market is the buyer's ability to demand lower prices from sellers. So far, rather than dropping, prices continue to rise, albeit at a slower 4 to 6 percent. That's down three to four percent from the recent record years in Twin Cities real estate. Moreover, there is a still only a 3 to 4 month inventory of homes under $300,000 on the market and that still benefits sellers.

Location’ is everything, and Camden has it

By John Helgeland

Plan ahead! Not only is it good advice but it sums up the summer efforts of neighborhood leaders across North Minneapolis. Over the past few months, two separate groups have been meeting on the topic of planning; one concentrating on Camden-area neighborhoods and the other covering the broader North Minneapolis region.
The first group is comprised of neighborhoods that lie within the City of Minneapolis’ Fourth Ward. Representatives from Cleveland, Folwell, Jordan, Lind Bohanan, Shingle Creek, Webber-Camden and Victory Neighborhoods were called together in March by Councilmember Barbara Johnson to “address capital projects, design issues and transportation concerns.”
Ann Forsythe and Katherine Thering are from the Metropolitan Design Center, an endowed center within the University of Minnesota’s College of Architecture and Landscape Architecture, with assistance from the City’s Community Planning and Economic Development (CPED). Forsythe and Thering are creating two maps for the Camden area from the northern most city-limit to West Broadway Avenue.
One map will depict the area’s assets, such as recreational, commercial, educational and other positive amenities that exist within the study area, while the other will show the locations of planned or current development projects. These snapshots will provide the group with a starting point to assist in determining next steps in the planning process.
Ann Forsythe, Director of the Metropolitan Design Center, commented that the level of cooperation she has seen in North Minneapolis, higher than she has seen in South Minneapolis, can slow the planning process down. Erik Hansen, a CPED Senior Developer echoed Ann’s observation on the level of cooperation in North Minneapolis and added that even though the process can take longer, it comes with a “greater pay-off.”
One of the planned developments in Camden is the southeast corner of Penn and Lowry Avenues. Hansen is optimistic that the response to the City’s Request for Proposals will result in multiple proposals to be considered for recommendation by the Jordan, Folwell and Cleveland communities. Hansen feels that, while it is an aggressive goal, a 2006 groundbreaking is possible following completion of the approval process and the developer financing is finalized.
From the developer’s standpoint, he indicated there are many reasons why this corner has attracted so much attention. Foremost, it is a prominent commercial node on two community corridors. Second, the gap in value between Northside and Southside property, for a similarly cleared and clean parcel of land, makes this site attractive. Third, developers have gained experience in completing this type of in-fill development, making a project like redeveloping Penn/Lowry less risky than it was a few years ago.
Another benefit is the strong community base present in North Minneapolis. Not only do we possess some of the best housing stock in the City, but we are home to a broad generational base. North Minneapolis is host to a large number of people who are long term residents, many of whom were born in the neighborhood and have stayed or have returned to the area. These individuals have strong connections to the neighborhood, and neighbors create a strong voice and demonstrate stability that is conducive to development.
Hansen illustrated this point by pointing to the second group that is discussing development in across all neighborhoods of North Minneapolis. The meetings, hosted by the NorthWay Community Trust, are bringing neighborhood and business leaders from the area to create a road map that can define development priorities and direction.
Hansen said he didn’t recall this level of discussion occurring in the recent past and felt that just having the opportunity to share with the other groups their current plans, upcoming projects and priorities assists in strengthening the collective voice for appropriate development in North Minneapolis. He sees the opportunity that neighborhood groups, in three separate City Wards, working together on their collective interests can consolidate the number of projects to prioritize from 13 (one for each neighborhood) to three (one for each ward).
The ability of the neighborhoods to act together is extremely important for the development process, and Hansen used the North Minneapolis Bike Task Force as an example of what can be accomplished when neighborhoods work toward collective goals. Through this task force, not only was the location of the four bike paths decided, but it opened the opportunity for an acceleration of the placement of the bike lanes to this fall, approximately three years ahead of schedule.
In reference to public safety issues and development, Hansen didn’t want to minimize concerns related to crime. Hansen agrees, “Perception drives development…” but so does the adage “Location, location, location.” When developers and architects tour the area, they see that the negative image they had of North Minneapolis doesn’t hold up. Continued efforts of neighborhood and business leaders help peel away misperceptions and are a great step at making North Minneapolis a “Location” for development.