From Alexandria, MN and Beyond. Is Housing Finding It’s Bottom?

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The reports that I read have long held that the fourth quarter of last year and the first quarter of this year would mark the darkest hours of this recession.  The data that’s coming in, may suggest that we may be near the pace of economic decline moderating this spring.

In reading my Wachovia Economics Group report for March 27, 2009 had this to say:  HOUSING IS FEELING ITS WAY TOWARD A BOTTOM

“Some of the most surprising news this past week was the better than expected data on new and existing home sales for the month of February.  Sales of existing homes rose 5.1 percent in February, pushing sales up to a 4.72 million unit annual rate.  Foreclosures and short sales continue to account for a large proportion of overall sales, with the National Association of Realtors attributing 45 percent of February’s sales to that category.  Anecdotally we are seeing strong investor demand for deeply discounted foreclosed homes in many of the hardest hit housing markets.  The surge in foreclosure sales is one reason prices are down 15 percent over the past year.

Sales of new homes also improved in February, rising 4.7 percent to a 337,000 unit annual rate.  Sales rose nearly ten percent in the South and close to seven percent in the West, but they fell in both the Northeast and Midwest.  The improvement in sales combined with dramatic cutbacks in new construction has helped pull inventories down to much more manageable levels.  At current trends, housing inventories in unit terms should be back at their pre-boom level by this summer.

One of the most surprising statistics was the Federal Housing Finance Authority’s report of a record 1.7 percent rise in home prices  during January, with gains in every region except the West.”

Only time will tell.  We have been saying to the Alexandria market that 2009 might be the time to buy.  With prices being down, inventory levels still above normal and the interest rates at all time lows…this might be the time that you don’t want to say; I SHOULD HAVE BOUGHT IN 2009.  I seen it happen in the 80’s.  If you have any comments, send them to me.

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Friday…in Alexandria, MN!

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Now if it was summer, we’d be thinking already of the weekend recreation.  Golfing (for some), the lake…for most of us.  It’s great living here, in what I refer to as “God’s Country”.  A bad traffic day in Alexandria, MN is on “Walleye Opener” when you have to wait for the signal light TWICE!  Talk about road rage, that’s about as bad as it gets.  Today we got snow.  No complaints here, I ain’t sandbagging my home.  Douglas County has 4 major watersheds that get rid of the water that falls here.  Flooding is almost unheard of here as being a problem.  We did have an Act of God here once, about 12″ of rain in 2 days.  Other than some wet basements, not too many problems.  No hurricanes, a very rare tornado, no mud slides and plenty of country.  I like my job, within 5 minutes of my office, I’m driving around the lakes or the farm fields, or standing in someone’s woods looking at real estate.  It’s a great job, just not having to put up with traffic aannnddd  getting to see all the countryside on a daily basis…I wouldn’t live anywhere else.  Been there, done that.  East Coast, West Coast, South Pacific;  seen a lot of this planet flying for the Marine Corps.  This is the best place I’ve ever found.  If you don’t live here…try visiting Alexandria sometime.

dctyzoningofcannreprt2008 Douglas County Land and Resource Management Annual Report.  Lots of info in here:  Feedlot info, Permits Issued, Structures Built.  All in a township by township breakdown.

douglas-county-assessor-report2008 Douglas County Assessor Report 2008.  This is a Seasonal & Residential Sales Report for 2000 through 2008.  Pretty interesting, look at the lower left corner.   Sales prices for Alexandria and it’s neighbors have consistently risen.  Average Sale price in 1995 was $74,923.  Average sale price in 2008 was $211,113.  This stuff is so cool if you get a kick out of real estate.  You know what they say…”Don’t wait to Buy Real Estate, Buy Real Estate and Wait!”

One other thing, been meaning to blog this.  National Association of Realtors press release of 2.25.09 (sorry, it’s a little old):  “NAR estimates the impact of the stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package.  Inventory is expected to fall below an 8-month supply by the year end, which would be consistent with home price stabilization.  Total housing inventory at the end of january fell 2.7 percent to 3.60 million existing homes available for sale, which represents a 9.60 month supply at the current sales pace.  Because sales were down, the January supply is up from a 9.4 month supply in December.  The drop in total inventory is an encouraging sign because the number of homes on the market has declined steadily since peaking in July 2008, and inventory is at the lowest level in two years, Lawrence Yun said.   In January 2007 there were 3.54 million homes for sale.”

This report is consistent with our current inventory statistics in Alexandria, MN.  Our inventory has finally started to subside.  It sure has been a wild and crazy 27 years here for me…fun though:)

Have a great weekend Alexandria, MN!

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Good Morning, Alexandria, MN! U.S. Economic Outlook…

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narus-economic-forecast2009

Enclosed is the U.S. Economic Outlook: March 2009 from the National Association of Realors Economic Research Division.

Nothing really new that we don’t already know…

Consumer confidence is down…but steadily picking back up from this point forward.

Fed Funds Rate…down, and staying down.

Prime Rate Down…and staying down.

30 year fixed-rate mortgage rates…down, and staying down.

Home Sales-Housing Starts…no big shiny stars here for the year.

Home Prices…in the tank, great time to buy.

Housing Affordability Index…off the charts!  Never been more affordable!

Again, this is a forecast.  I read these various reports frequently and they (forecasts) seem to be fairly consistent from report to report.  If you run across some other pertinent information, send it along to me.

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Making Homes Affordable.gov

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My friends in Alexandria…if you or someone you know may need help refinancing their home or is struggling to make the payment on their existing home because the rate went up; then you may want to check out this website:

www.makinghomesaffordable.gov

According to their site, between 7 and 9 million homeowners may need the benefits of this program.  Check it out.

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The Day After

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Live from Alexandria…in reading the comments today about the report from yesterday, there appears to be more data to share.  I read a report from Chicago Tribune columnist Mary Ellen Podmolik today.    In there it said, “Almost all of the gain in the national numbers came from the multifamily sector, which includes apartments and condominiums.  Compared with January,  starts rose almost 80 percent on buildings of five units or more, but only 1.1 percent on single-family homes.”

Bottom line…people are working at building housing units and materials are being delivered to job sites.

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Hi,Alexandria!…Surprise jump in housing starts ignites Wall St. Rally

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SURPRISE  JUMP  IN  HOUSING  STARTS  IGNITES WALL STREET RALLY.    

That’s the headlines from Yahoo News I was just handed 15 minutes ago.  Stocks surged today as an unexpected leap in housing starts pushed Home Depot and other retailers higher. 

“Investors are starting to get a sense that things are stabilizing.  They’re not getting any worse,” said Terry Morris, a portfolio manager with National Penn Investors Trust Company in Reading, Pennsylvania.

DOW  UP  ALMOST  5  PERCENT  FOR  MARCH

The blue-chip dow average is now up 4.7 percent for the month but remains down 15.7 percent for the year to date.

The Dow Jones home construction index (.DJUSHB) rose 6.3 percent after data showed housing starts jumped 22.2 percent in February, the biggest percentage rise since January 1990, also the first increase since last April.

 

This will give the evening news media somthing GOOD to talk about.

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Alexandria, MN Housing Inventory is Down

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Residential Listings in the MLS today:  464

March 17, 2008:       534

March 16, 2005:       551

Inventory is down over 15% from the highs of the past statistics.

(Statistics provided by the Greater Alexandria Area Association of Realtors Multiple Listing Service)

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Is this the End of the Beginning?

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In reading my Wachovia report this morning, it said:

“This week’s report that retail sales fell much less than the consensus estimate in February and the upward revision to the January sales figures raises  the prospect that the worst of this recession may  actually be behind us.  While such a statement might seem surprising, it is generally consistent with our forecast, which has long noted that late 2008 and early 2009 would mark the darkest hours of this recession.  Even if the worst is behind us, the economy still faces a long and arduous road to recovery.  To paraphrase Winston Churchill, this week’s improved retail sales figures, sharp decline in inventories, and positive bounce to the stock market do not likely mark the end of the recession, nor do they mark the beginning of the end.  Perhaps, however, the apparent bottoming in retail sales combined with the sharp reduction in business inventories will mark the end of the beginning of this downturn.  January’s sharp upward revision to retail sales lifted the overall increase to 1.8 percent.  THIS MARKS THE FIRST INCREASE IN OVERALL RETAIL SALES IN SEVEN MONTHS AND THE LARGEST INCREASE SINCE JANUARY 2006.”

Info from the Wachovia Economics Group commentary dated 3.13.09.

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Douglas County Building Permits- Alexandria, MN: marketdate 3.12.2009

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I got a report this morning showing the permits issued for the County.  In a nutshell, permits were down for 2008.  I attached the full form for your perusal.

2004 Dwelling Permits Issued: 288   $29,152,238

2005 Dwelling Permits Issued: 225   $27,660,483

2006 Dwelling Permits Issued: 197   $30,988,433

2007 Dwelling Permits Issued: 134   $24,594,966

2008 Dwelling Permits Issued:   99    $18,576,648

It’s gotta be close to the bottom, that means it will only go up from here.  The future looks amazingly bright.Douglas County Permits-5 Year Summary

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Adversity breeds Opportunity

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Reading my CCIM magazine this morning, I came across these comments:  “Cautious behavior keeps downward pressure on markets, creates no value for investors, and most importantly gates your ability to catalyze wealth creation.  History clearly tells us…the more severe the downturn, the greater the opportunities…and more lasting and substantial wealth is created.”

My wife and I started in real estate in 1982.  We bought our first piece of investment real estate in 1984.  A little old house, which we still own today.  We bought as much real estate as we could afford back in the 80’s when we really didn’t have much money.  We worked hard at trying to pay them off.  When the market took off, man did it take off.

Remember the S&L bailout?  There were  deals then, lots of them.  After the 1982 recession, lots of great buys.  The realities of a contracting economy are a big risk factor.    It takes a great deal of courage to buy in markets like these, but truly, these are the markets that you wait for to buy in.  You might take a harder look at properties that the herd is shying away from.

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