2009 Craft Talk

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Presentation to Minneapolis Breakfast Club on March 18, 2009

Presentation to Minneapolis Breakfast Club on March 18, 2009

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  • 1. Twin Cities Residential Real Estate 2009 Or what happened to my equity?
  • 2. 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%
  • 3. 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%
  • 4. What went wrong?
    • Easy Credit
    • Low or zero down
    • ARM and/or Buydown loan programs
    • 2 nd Mortgages of over 100% of appraised value
    • Expectation that home prices only went up
  • 5. 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)
  • 6. 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
  • 7. Market Recovery
    • $8,000 Tax Credit for 1 st time buyers
    • Mortgage workouts to reduce foreclosures
    • Cities buying blighted properties
    • City Ordinances regarding vacant buildings
  • 8. Homes for sale
  • 9. 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
  • 10. 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
  • 11. What’s new in the Biz?
    • Virtual Tours
    • YouTube Video
    • Social Networks
      • Facebook/MySpace
      • Linked In/Plaxo
      • Twitter
    • Blogging
    • Texting/Mobile Web