Minnesota Real Estate Weekly Update

For the week of July 23rd, the Twin Cities real estate market (13 county metropolitan area) saw 2720 new listings processed. 900 listings went pending, getting an accepted purchase agreement. Overall inventory levels ballooned to a whopping 44,000 active listings on the market in the Twin Cities area.

The housing supply rate is currently at 9.6 months. This number means the amount of time it would take the current supply of inventory to be become pending or sold. The market is considered a "balanced market" when there are 5 months of inventory active.

Last year at this time, the housing supply rate was 7.1 months. Today's rate is an increase of 34% compared to last year alone.

Is there hope? Yes of course. Again, 900 listings sold this past week. Our team, The Minnesota Real Estate Team, is up saleswise over 13% from last year alone. We are finding that listings that are priced to sell, and listings that are in good condition, continue to move.

This increase in inventory obviously has alot to do with the increase in foreclosure and bank owned listings here in the Twin Cities. Starting this week, the team will be adding our own bank owned/short sale/REO specialist, Mary Alice Short. Mary Alice currently has over 50 bank owned listings.

Look for another Minnesota Real Estate update next week!

Minnesota Real Estate Weekly Update

The market continues to be soft here in the Twin Cities for sellers. This past week, there were 2400 new MLS listings put on the market, and 1000 MLS listings went pending. Inventory levels continue to hover at the 43,000 active properties mark. This is up from 38,000 actives as of last year at this time.

Compared to one year ago at this time, pending sales are down almost 16%. Thankfully, new listings processed were also down this week 3% compared to last year at this same time. The rise in interest rates over the past month has also created more affordability problems for many buyers.

In spite of this "doom and gloom," our team, The Minnesota Real Estate Team continues to find many buyers who are looking to buy. Sellers however are being forced to be "realistic" on sales price.

I believe this market correction overall is good one. The appreciation in the Twin Cities from 1998-2004 simply could not continue. Homes were becoming more and more unaffordable for the average buyer.

However, looking long term for real estate prices, I think things look outstanding. When you look at the Twin Cities job market, it is one that is very strong. With the various companies in our market (Target, Medtronic, 3M, etc.), the job market still continues to hold steady. This bodes well for the demand on real estate, allowing prices to rise over time.

Look for another update next week!

Minnesota Real Estate Weekly Update

This past week, 2600 new listings went on the market here in the Twin Cities, with 990 listings going pending. Total inventory levels in the Twin Cities metro area still hovers at 43,000 active listings for sale. Currently, the housing supply rate is at 9.2 months. This means that it would take 9.2 months for the current supply of properties to become pending or sold. Last year at this exact time, the supply rate was 7 months. This is is 31.6% increase from last year alone.

Are properties selling in this market? Yes, of course. Now more than ever is a time to buy. Our team, The Minnesota Real Estate Team, is experiencing an increase in sales volume of 13.52% compared to last year at this exact time. Our team of agents is finding many good deals for buyers (with such high inventory levels), but sellers are still able to get their property sold with our marketing plan. Price and condition always are the two most important factors in determing the sales process.

With some of our clients, they are not able to sell (based on market value versus what is owed on the property). However, they still have a desire to buy. In these cases, we are able to help the sellers rent out their current property to a qualified tenant based on our rental property experience.

The rental market has really strengthened over the past few months as fewer people are buying homes, and more and more are renting. With all of the recent changes with the mortgage qualification process for buyers, clients who would have qualified as a buyer are now often times forced to rent.

Look for another Minnesota Real Estate Update next week!

In ice-cold housing market, assessment disputes heat up

With the residential real estate market slumping, questions and challenges over 2007 tax assessments have more than doubled in Ramsey County over last year, and queries have risen significantly in Hennepin County.

By Pat Doyle, Star Tribune

Last update: July 01, 2007 – 9:53 PM
With the residential real estate market slumping, questions and challenges over 2007 tax assessments have more than doubled in Ramsey County over last year, and queries have risen significantly in Hennepin County.

When the housing market was hot, homeowners reaped the benefits of rising property values -- and paid higher taxes for it. Now that the market has cooled, some homeowners are expecting a break in taxes and seeking an explanation when they don't get it.

This spring, Ramsey County fielded 998 inquiries about residential valuations, compared with 470 in 2006. In Hennepin County, queries about the suburban assessments increased 32 percent.

"One of the reasons we had ... more appeals this year is folks saw their market value stagnate or perhaps even decline a little bit, but their taxable value continued to increase," said Ramsey County Assessor Stephen Baker.

That phenomenon is the flip side of a state system that worked to homeowners' advantage during boom times by limiting the growth in the value on which they are taxed.

But the same system means taxable value can still rise in a sluggish market.

Another factor contributing to the second-guessing is that the annual property value statement sent to homeowners in March may reflect estimates from a year ago, when the market was more robust.

"When the markets are going up, most taxpayers are perfectly comfortable with the assessor lagging behind a bit," Baker said. "But when the market starts to contract, they're much less happy with that."

When Jay Theriault got his tax statement and saw what Ramsey County said his home was worth, he did a double-take at numbers that looked too high.

"I said to them, 'If you want to bring me a check for that amount, I'll be out within the end of the week,' " Theriault recalled.

Theriault and his wife, Ruth Hjelmgren, both real estate agents, thought the assessment of their St. Paul home didn't jibe with their sense of a slumping housing market in their area. They appealed to the county and it sent an assessor out to evaluate their home. The county revised its estimate.

"The number they came back with was pretty much on the nose," Theriault said.

Some win, some lose

Overall, the March 2007 statements -- for taxes payable next year -- showed residential market values flat in the state's two most populous counties. Single-family homes in Ramsey County declined less than two-tenths of one percent when improvements were not included. Hennepin County saw total residential property values increase 4 percent. Unimproved single-family homes in Minneapolis increased 1 percent in value.

Those figures contrast with the boom of the early part of this decade. Even tax statements that went out in Hennepin County last year showed an 8 percent increase in home values.

Like Theriault and his wife, other property owners who believed the official valuation of their homes was out of sync with a changing market have asked county assessors to take another look.

But not all of them win.

Ananth Pai challenged the $217,300 market value assigned to his Maplewood home. He took his concerns to Ramsey County officials at an assessment review meeting in Roseville.

Pai said he had a "perceived reality" that houses aren't selling at the pace of a year or two ago, "and that must mean that property values are going down or should go down."

Pai said he worried that improvements made in neighbors' property unduly influenced the county's assessment of his.

"I wanted to know that it wasn't based just on some averaging of a database," Pai said. "I asked them if they would consider taking a look at the place just to make absolutely sure."

He said an assessor came out to his house within a week of the Roseville meeting and inspected his property. He got a letter soon after saying the county wasn't changing its mind.

"Overall it was fair," Pai said of the appeals process. "I'm satisfied that somebody actually came out."

Delayed impact?

A survey of Minnesota counties by the state show that, overall, residential property values grew more slowly in 2006, although a few communities saw small dips.

For the most part, "we were getting smaller increases," said House legislative analyst Steve Hinze.

But Hinze said any softening in home market values this year won't be realized on tax statements until 2008, if then.

Any further diminishing of values this year that is not captured in next year's statements could become "what they may be complaining about next spring," he said.