E.J. "Mike" Carlier ABR CRS GRI Apple Valley MN

Small business affects housing affects small business affects...

A couple years ago, I wrote that there were a lot of homeowners whose home equity had been converted to toys and vacations, and that was correct. On further review I feel that I unfairly omitted the fact that many small business owners financed their startups with their home's accumulated equity. Entrepreneurs seldom are able to walk into a bank with an idea and get the financing they need without collateral.

This morning on CNBC's Squawk Box, a few of the guests were discussing the slow recovery. The lack of financing available for small business startups was tied to the lack of accumulated home equity. Here we are with the economic downturn running its course, but there are parts missing that are making full recovery difficult.

The effect of the housing depression on small business is hard to ignore. There are fewer startups now than in a decade, and this is due partly to lower home values and the resulting inability for many to use personal assets to finance new businesses. In the foreseeable future, it does not appear that home equity will be a common source of funding business startups. This suggests that fewer businesses will be formed, but they may be less leveraged, with more funding coming from accumulated savings and less from loans. It will be interesting to see if lack of leverage will affect the survival rate of startups. Ones own money has a higher intrinsic value, and that could affect the quality and care that goes into operating the business and the decision making in its course.

The long term effect on the housing industry remains to be experienced. It would stand to reason that, without the rapid appreciation characteristic of the past, one incentive to move up to a higher valued home will probably not return for a long time. With little other than debt paydown to increase equity, refinancing will seldom happen for anything but improved interest rates. It appears that lower unemployment and inventory reduction in themselves may not get the industry anywhere near the level of robustness that many of us are hoping to see again.

Farmington MN 2011 home sales exceed 2010 totals

Sold home totals in Farmington have passed the total units sold in 2010. According to Regional Multiple Listing Service of Minnesota data, total homes sold in Farmington in 2010 were 382, and the year to date total is 390. 2011 has been a great year for both sellers and buyers in Farmington.

Sellers who price their homes close to market value are finding that there are sufficient numbers of willing and able buyers searching for homes in Farmington. If you're thinking about a lifestyle upgrade that involves the sale of your home, all indications are that now would be a better time to go on market rather than waiting until 2012. Call or email for help with the information you need to make a decision.

If you're fed up with making your landlord's mortgage mortgage payment and want a better life for yourself and your family, why not join the smart homebuyers who have chosen to make that upgrade now? If you want help planning your home buying strategy, call or email. It costs nothing to consider your options.

Plan ahead for postage increase

Those of us who operate a business, whether real estate or otherwise, understand that sometimes things don't go well. The Amazons and Netflixes and others like them have distressed many brick and mortar businesses that attempted to compete with them. Some survived and some did not. Anyone who has been in business for more than a few days understands that competition is nothing to be ignored. Well, everyone but businesses connected with the government.

The US postal service has for decades competed with United Parcel Service in the package delivery business. For most of those decades, UPS has been profitable and the USPS has not. Now there are more players in the same area including FedEx and others. They all tend to be profitable while USPS operates at a loss.

The internet and the emergence of email and electronic bill receiving and payment have further depleted the USPS revenue. It also seems that technology improvements have not increased reliability or decreased the amount of elapsed time between mailing a letter and receiving what has been mailed. In short, the USPS has taken on competition by doing nothing or worse.

Faced with huge losses, USPS has once again demonstrated their lack of business acumen by doing what they always do. They are raising their prices. If your competition is providing better and more reliable service, and they are charging less, dive head first into the shallow end of the pool. Raise your already too high prices.

On January 22, the postal service will raise the price of mailing a first class letter by one cent. If you do a lot of mailing, this may be a good time to pay the postal service ahead by buying some of their forever stamps before the rate increase. If you are looking for some additional end of 2011 expenses, buy next year's stamps before the end of the year.

Lakeville MN Home Sales Exceed 2010 Totals

Another Minnesota city's total year to date home sales have exceeded the entire 2010 totals. According to information supplied by Regional Multiple Listing Service of Minnesota, Lakeville's number of closed residential sales has just reached 607, topping the 2010 total of 605. In a year as challenging as 2011, this suggests that there are some improvements in the Lakeville housing market.

The immobility of underwater homeowners still exists. People who could afford a higher payment are still stuck in homes they otherwise would have replaced with a move up home. Eventually the lending industry and government regulators may find a way for otherwise creditworthy home owners to port their debt to a more suitable home. It seems like a no-brainer, so somehow even those with no brains ought to be able to make the call.

In the meantime, with lower than national average unemployment numbers, there are enough young people with jobs and decent credit entering adulthood to move the sales needle into more positive territory. 2011 may not go down in history as a great year for housing, but it does look like a pretty good year.

Now is the time to begin planning a strategy to sell or buy real estate in 2012. If you are thinking about selling your home, or if you're thinking about firing your landlord and making your own mortgage payment, now is the time to do some exploratory investigation. Call now to arrange a convenient time for a free preliminary consultation.

There is no Black Friday for your landlord

Black Friday is the day that retailers are supposed to begin turning a profit for the year. Millions of shoppers voluntarily turn over their money, or their credit in exchange for stuff they recently decided that they cannot live without. The retailers are happy because they will make a profit this year.

Mr. Landlord, however, is unable to celebrate Black Friday. Why? He cannot celebrate Black Friday or any other day when his investment moves from loss to profit because he always turns a profit. He has to spread his celebrations over the entire year, but mostly on the Twelve Days of Landlord Christmas, known by tenants as the first of the month, the day rent is due.

How many more Landlord Christmases do you want to help him celebrate? Why not make the decision to allow someone else to share Landlord Christmas with him? There are plenty of folks who enjoy living in temporary housing who will gladly take your place. Perhaps, now is the time to start making your own mortgage payments on your own house, with your own yard, and with your own walls with any color you want, and your own rules. Now is the time to explore the opportunity to declare your residential independence. Call me when you want to start planning a moving strategy. You may be surprised to find that a better life doesn't always cost more.