Ray Klotz

I just saw the latest figures on home searching on the internet. 93% of consumers start their Minneapolis home searches on the internet. For anyone one that has been around before the internet era, this is an amazing statistic and explains why the print media (StarTribune, etc.) are in a world of hurt. In this age of cyberspace, old dogs have to learn new tricks. It would appears an internet presence is part of a package of a successful marketing program for real estate agents today.

Ray Klotz
Edina Realty

It sure appears that the Minneapolis real estate market is heating up a bit in the under $200,000 market. Multiple offers are happening on well priced and good conditioned homes that have been foreclosed on or in a short sale situation. With the Federal tax credit now in place for 2009, buyers are taking advantage of low interest rates to make their move to buy. One wonders if this pent up demand will clear enough out a large number of lender mediated homes to get this residential market back to normal. Only time will tell.

Ray Klotz - Edina Realty

For those interested in Minneapolis real estate Lender Mediated ( foreclosed and short sales ) stats by city, you can click here to go a report put out by the Minnesota Area Association of Realtors and use this interactive report to click on the city of interest to see what is happening in Lender Mediated listings and traditional listings ( non-lender mediated ). The statistics vary depending on locality. If you compare the city of Edina with the city of Brooklyn Center, you will see quite a disparity. The cities with housing stock at or below the Twin Cities median price for housing, seem to be hit the hardest with foreclosures. This report is a great tool to analyze where a buyer may make a purchase. If a buyer is a believer in the axiom "buy low-sell high", he or she might look at the hardest hit areas for value. If a buyer wants a more stable purchase, the buyer may want to look at a locality that has taken a less severe decrease in pricing. This report will available for only a short period since the data will be outdated in the near future. Enjoy.

When is this real estate doldrums going to end? Here is an educated guess and we have to look to the recent mortgage programs' past to see what the future holds for the real estate market. Through the month August of 2007, slowly but surely, the easy qualifying mortgages started to drop off the radar screen. As many mortgage brokers realized that these programs where going be put to pasture, there was a rush to get there clients into these programs before they ended. By September 2007, most of these easy mortgage vehicles were gone. Many of these easy qualifying mortgages where either interest only, one year to three ARMs or Stated Income products. As the real estate market progressed in 2007-2008, the realization became apparent that the hens were coming to roost with ever increasing foreclosures and short sales. Mortgage companies were forced to go to the tried and true traditional mortgages that have been with us for decades.

Now it is apparent that until these, in reality, unqualified mortgages (future foreclosures or short sales), that were taken out in 2007 are dealt with and flushed through the market, the Minneapolis real estate market cannot turn around. Being that 2007 was the last year that these mortgages were available, it appears to me, when you factor in the 3 year ARM products, that earliest this market could really see significant upward movement in home pricing is 2010. I believe we are going to see upward spurts of increase activity in home sales, however, the downward pressure caused by foreclosures could counteract pricing.

This still make the market extremely attractive to buyers, especially when you factor in the current low interest rates still available. As a real estate professional, I really hope I am dead wrong. But, I cannot ignore the sins of the past and how they will affect the future.

The year of 2008 is starting to look like the "The Year of Foreclosure" in the sense that the mortgage companies who have gotten property back are getting extremely aggressive in pricing their homes. In some cases, taking an assessed value of around $210,000 single family residence and listing it at the $150,000 range, thereby, devastating the market values of all the homes in the same neighborhood. A mortgage broker recently told me that 80 percent of the loans he did in January of 2008 were on foreclosed properties. In one sense this is good because it is flushing out the excess inventory of homes. In another sense, it is making extremely difficult for some people, even with great credit, to refinance out of an ARM because their home just won't appraise.

THIS IS THE TIME TO BUY!!!! Interest rates are 5.5 % or lower. Prices are excellent. Choice of homes are many. It almost seems like the perfect environment for the long term investor. Only time will tell on how the rest of the year will unfold. But it would appear to me that the previous 30 days more than likely foretells "The Year of the Foreclosure".

To search for homes in the Minneapolis area go to www.MinnesotaSearchHomes.com