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Twin Cities Residential  Real Estate 2009 Or what happened to my equity?
The good news <ul><li>38,730 Homes were sold in 2008 </li></ul><ul><li>Home prices are up 30.5% since 2000 </li></ul><ul><...
Not so good news <ul><li>The number of homes sold  decreased  33.5% from the 2004 peak </li></ul><ul><li>Average sale pric...
What went wrong? <ul><li>Easy Credit </li></ul><ul><li>Low or zero down </li></ul><ul><li>ARM and/or Buydown loan programs...
Lender Mediated Sales <ul><li>Short sales </li></ul><ul><li>Sale proceeds do not cover existing mortgage(s) and selling ex...
All Real Estate is Local <ul><li>Minneapolis (North, Camden, Phillips) and Brooklyn Center all had 59%+  Lender Mediated  ...
Market Recovery <ul><li>$8,000 Tax Credit for 1 st  time buyers </li></ul><ul><li>Mortgage workouts to reduce foreclosures...
Homes for sale
Fun Facts <ul><li>Highest asking price </li></ul><ul><ul><li>$53,500,000 </li></ul></ul><ul><li>Highest Sold price in 2008...
Craig and Susan’s Results <ul><li>261 Listings to date </li></ul><ul><li>298 Sales to date </li></ul><ul><li>Average of 40...
What’s new in the Biz? <ul><li>Virtual Tours </li></ul><ul><li>YouTube Video </li></ul><ul><li>Social Networks </li></ul><...
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2009 Craft Talk

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Presentation to Minneapolis Breakfast Club on March 18, 2009

Published in: Economy & Finance, Business
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Transcript of "2009 Craft Talk"

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