Bank Deposits- Alexandria, MN: There’s a lot of Money Here!

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Just talked with Jason Murray at the Alexandria, MN Area Economic Development Commission today.  Got a copy of the Total Deposits report that are held here in Alexandria by 10 banks.  Total for 2008 was $578,144,000.   Years past:  2007-$536,734,000,    2006-521,203,000,    2005-$490,665,000.

Deposits have grown steadily here.  Bremer Bank is the market leader, I think that may have something to do with their large philantropic contributions to this community every year.  They can’t advertise that, something to do with the regulations, but I wish that they could.  They put a lot of money into this community from their profits.  Thank the people at Bremer when you see them.  They help make Alexandria, MN a much better place to live.

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My Morning Commentary- Alexandria, MN

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In reading my report from Wachovia Economics Group today (for Feb.20, 2009), I quote the following:  “Although there is not much good news at present, there are  a number of forces that sooner or later will stabilize global economic activity and eventually lead to recovery.  First, short-term interest rates in most countries have declined significantly.  Although the ususal channels of monetary transmission may be impaired somewhat at present, lower interest rates should evenutally  help.  Most countries have also announced fiscal stimulus plans that will kick in over the course of the year.  In addition, lower energy prices will help.  If oil prices average $50/barrel this year (WTI is below $40/barrel at present), then roughly $1.5 trillion worth of  purchasing power  will be transferred from oil-producing nations, which tend to have relatively high propensities to save, to oil-consuming nations, which tend to have higher propensities to consume.   This transfer of purchasing power should help to eventually stabilize global economic activity.”

Alexandria, MN Housing:  Been a long winter, the $8,000 tax credit should be of some benefit to first-time homebuyers.  That’s a sizable credit, I don’t ever recall a Tax Credit being given to housing that didn’t have to be paid back before.  I have seen it in the Ag Industry and for equipment purchases, but not for housing.  If you are in the market for a home, and haven’t owned one in the last 3 years, you may qualify for this fantastic benefit.

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The Growth of Alexandria, MN (continued)

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Drove by the Douglas County Hospital yesterday, it’s good to see the steel structure going up.  Over $30,000,000 in improvements.  Also, the Indigo building is looking good.  I’ll snap some more photos later today and get those in.  If you go back and look at the article from January, most of those projects are completed or nearing completion.  I heard that they are going to break ground on the new VA Clinic next month.  That will be a huge addition.  What a great town…clean air, lots of fresh water, very accessible recreation, good schools and infrastructure…positive growth…why live anywhere else?

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Good Morning, Alexandria, MN!

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Just checked the U.S. Population clock, added 6,500 people to the national population overnight.  U.S. population now stands at 305,849,952.  That’s a net gain of 6,524 people since I checked it yesterday.  We will need to create over 2,800 housing units (at 2.3 people/housing unit) today to keep up with the pace, of growth since yesterday.  Have you ever checked the world population?  Those numbers are really big.  Basically, what all this means is that real estate is kind of a “no-brainer”.  Buy and Hold.  That’s the key.  There are more people coming…supply and demand.   All of our roads, schools, retail, factories, recreation…all of it comes from real estate.  We definitely have a limited supply, however, in America we are blessed with less people per square mile than say India.    Nonetheless, this is definitely the time to buy real estate.  I see more opportunity today for consumers than I have in a while. 

I checked with Alexandria, MN Area Economic Development Commission yesterday on the employment figures for Douglas County.  You can get them on-line as well, because that is where they got them…from the State website www.deed.state.mn.us/.  The Annual Unemployment Rate, not seasonally adjusted stood at 5.1% for 2008.  4.5% for 2007.  3.9% for 2006 and in the 3% range through 1999.  Pat said that with everyone working, you still have a 3% area of unemployment because the figures take into account EVERYONE.  Those that physically can’t work and of course those lazy ones that don’t want to work.  So the good news is that 94.9% of our work force was working in 2008.  We can always speculate why the .6% got let go in 2008.   Work hard, be diligent with your job…you’ll have work.  And don’t forget, to improve your life…Shut the News OFF!

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The Market Today

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We track the market here at Randy Fischer Real Estate daily.  This statistic is rather interesting and is the one I watch the most.  It kind of sums up where the market is at.  In the Residential category of the MLS we had 482 listings at Peak Time, which was September 25, 2005.  We had 657 on 6.30.06  AND 663 on 7.13.07  AND 658 on 8.28.08.  This is all listings in the Residential section of the MLS.  Sales in Douglas County were 398 in 2004, 379 in 2005, 367 in 2006, 342 in 2007 and 313 in 2008 (of the 313 sales, 245 of them were below $200,000).  Sales went down, but the listing volume went up.   As of this morning we had 467 residential listings in the MLS

Lakehomes:  At peak times in the MLS we ran the following numbers  233 Lakehomes listed at 10.6.05 in the MLS, 375 at 7.26.06, 417 at 7.30.07 and 402 at 8.13.08.  Sales in Douglas County were 152 in 2004, 120 in 2005, 107 in 2006, 121 in 2007 and 82 in 2008 (68 of those sales were below $500,000).  Again, sales were almost half and listings almost doubled.  As of this morning we had 214 listings in the lakehome section.

Sales statistics provided by the Greater Alexandria Area Association of Realtors Multiple Listing Service.

My comment:  I have to believe that the market is at or near it’s bottom.  Only time will tell.  If someone is interested in buying real estate, these are good times to buy in.  Prices are down, interest rates are phenomenal, inventory has been running at all time highs.  I guess we’ll have to wait a couple of years to see if this was the bottom.  Check in with me then and we can go over the statistics.  But if you wait 2 years to buy and prices should go back up, don’t be mad at me if this was the bottom:)  Quite frankly, I always think that it is a good time to buy real estate if you can afford it.  Real Estate is always just out of reach, I’ve never known it to be easy.  When I bought my office that I am currently in, some of my peers thought that it was not the right time to buy.  We paid $75,000 for it.  Not sure what it is worth today, that was 23 years ago.  US Population stands at 305,843,428 at this moment.  We have a net gain in population of one person every 13 seconds.  That’s almost 2.5 million per year.  Do you have any idea what this will do to real estate over the next 10 years?  I’m going to stick around (Lord willing) and see.

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Good Morning Alexandria, MN

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It’s a great day here in Alexandria!  I’ve travelled extensively with my wife and the Marine Corps (I was on a C-130 flight crew in three different squadrons)…This IS a fantastic place to live.  Low crime, superb schools, recreational opportunities out your doorstep, lots of retail, plenty of well-built housing stock, jobs…need I say more.  Sales for real estate have been sluggish through the winter, usually normal.  The consumers don’t know that this may be the best time, may be the bottom for the market.  Time will tell.  Wachovia U.S. Economic Forecast dated Feb. 11, 2009 predicts that crude oil prices to be at $41.98/barrel for 1st quarter average in 2009.  Compared with $123.98 for 2nd quarter 2008.    Their forecast shows that Crude Oil costs to stay at or below $45.00 through 4Q 2010.  The Federal Funds Target Rate is at 0.25% ending 4Q 2008 and forecasted through 3Q 2010.  House prices are in check.  Low interest rates, tax credit of $7,500 for first time buyers, fair prices for housing, good supply of available product… forecast data from the National Association of Realtors are for sales to improve from the low of 2008.  That means that supply will start to diminish and housing will start it’s way back up somewhere in 2009/2010.

Some statistics from the National Association of Realtors website.  Economists commentary dated February 4, 2009:  *Real estate value in the aggregate held by households has fallen by nearly $3 trillion in the past two years.  *The most recent data is as of the third quarter 2008 and the aggregate real estate value was $19.1 trillion, down from $21.9 tillion at the end of 2006.  *  The net equity in housing, which is determined by asset value minus mortgage liability, stood at $8.5 trillion in the third quarter of 2008, down from $12.5 tillion at the end of 2005.  *  Despite the recent decline, from a long-term perspective the net equity is considerably higher now than in 1990 when it was $4 tillion and in 1980 when it stood at $2 trillion.

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Alexandria, MN: The Market Today, foreclosures & more!

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Lots to report on:  Foreclosures…Last year we had 134 in Douglas County.  If you read back a little ways, we had 89 in 2007.  In talking with Sara at the Douglas County Sherrif’s Department, she said that we could expect more foreclosures in 2009 than we had in 2008.  Time will tell, but nonetheless, a significant increase over 2007.

Sales:  Residential home sales recorded in the MLS were 313 closed sales for 2008 in Douglas County.  Compared with 342 in 2007,  the sales were down.  Unfortunately, we had a significant number of foreclosed sales in this data.   Lakehome sales were hard hit with 82 closed sales in 2008 versus 121 closed sales in 2007 in Douglas County.  Lakeshore lot sales recorded 28 closings in 2008 vs. 64 closed sales in 2007 for Douglas County.  This data is provided by the Greater Alexandria Area Association of Realtors Multiple Listing Service.

The Housing Affordability Index stands at 158.8 for December.  Unprecedented affordability index, in 2006 it was 106.1 and in 2007 it was 111.8.  What the index stands for is the cost of a mortgage (average in the U.S.), the average income in the U.S. and the average cost of a home in the United States.  In doing the qualifying for the average home, 158.8 out of 100 Americans can afford to buy the average home in America.  In other words, housing is very, very affordable today.  In 1982, it was 69.5.

Farmland prices did well here in Douglas County last year, as well as the rest of the nation.  “Farmland prices increased almost 9 percent in the past year according to the National Agricultural Statistics Services 2008 summary.  The average cost of an acre stands at $2,350, a record high, and $190 higher than 2007.  The average acre prices has almost doubled since 2002.”  In Douglas County, for 30 recorded ag land sales averaged $2,523 per acre.

Commentary:  There is a lot happening in the world, always has been.  Alexandria had sales last year, less than in the past.  In a declining market like we just had, we have been looking for the bottom.  Did we find it? Maybe, time will tell.  If we did, there are a boat load of positive things about to happen.  If we didn’t, then we have to wait a little longer.  In the meantime, quit watching the news…inflation is in check, interest rates are at historic lows, house prices are down, consumer goods are down, gas prices tanked (I paid $1.29 in South Padre Island last month), savings rates are up, we are almost done with the terrorists for the havoc they wreaked on American soil on 9.11.01, alternative energy is being discussed more than ever before, we have a new President-we’ll see what he can do, everyone has plenty of food and money for entertainment (did you see the crowd at the Super Bowl?).  Not much has changed in the world, always problems, always searching for solutions to the problems.   Later.

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