BREAKING NEWS! Consumer Confidence Report Released

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May…54.9!  The consumer confidence is at it’s highest level in 8 months (September 2008 – 61.4)!  I can tell it on the street that the worst appears to be over.  It was predicted that the first quarter of 2009 would mark the bottom, the consumer’s appear to believe that.  Maybe the news media can spin this story to the negative?

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Population Statistics: World to Alexandria, MN. marketdate 5.27.2009

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I was in real estate class last monday.  Here are some statistics from the instructor:  Projected population for the state in 2010 is 5,452,500 people.  Projected increase for the decade is 533,000 people or 11%.

Some age group projections:  The Biggest Gainers are, a.) 60-64…..30% increase.  b.)  65-69…..22% increase.  c.) 55-59…..19% increase.           The Biggest Losers are,  a.)  40-44…..12% decrease.  b.)  35-39…..4% decrease.  c.)  10-14…..2% decrease

Projections for 2010—Households:   a.)  Projection for 2010 is 2,182,200 households, an increase of 287,100 or 15.1% for the decade.  b.)  The biggest increases will be in married couples without children, up 223% and people living alone, up 21%.  These two groups will account for 80% of the change.

Projected annual rate of growth of Minnesota hoseholds beyond 2010:  a.) 2010 to 2015…..increase of 1.2% households equals 0.9% population.  b.) 2015 to 2020…..increase of 1.0% households equals 0.7% population.  c.) 2020 to 2025…..increase of 0.9% households equals 0.6% population.  d.)  2025 to 2030…..increase of 0.8% households equals 0.5% population.

Side Notes: 

First wave of Baby Boomers turns 65 in 2011

The population is Aging

The population growth rate will slow.

Minnesota is 2nd in Home Ownership

Minnesota is 8th in Family Median Income

Minnesota is 2nd in United Health Foundation’s ranking of State Healthliness

Minnesota is 9th in percentage with a college diploma

Minnesota is 2nd in percentage with at least a high school diploma

Minnesota is 4th in percentage with Health Insurance

Minnesota is 4th in Men Labor Force Participation

Minnesota is 1st in Women Labor Force Participation

Minnesota is 2nd in Lowest Poverty Rate among the 50 States

There is a lot of growth out there in the population; worldwide, nationally and locally.   The United States is growing at the rate of around 6700 people per day (go to US Census Bureau website).  I am a little surprised that Minnesota hadn’t grown more as in 1980 there were 4 1/2 million people here.  The projection now is for 5 1/2 million people in 2010.  That’s 30 years, roughly one million people have been added to Minnesota.  I think back on the price of real estate in 1980 compared with today.  Lake lots on Lehomme Dieu were priced around $25,000, now one could expect to pay around $500,000.   You can invest in the stock market, precious metals, collectibles…(real estate?)whatever you feel most comfortable with.  But first and foremost, save 10% of your income and invest it wisely.  There are more people coming to the US , MN and Alexandria.  Increased demographics will increase your opportunities.  If you are looking for solitude…we still have it available here in Alexandria.  However,  you may want to consider buying it today.

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Condo/Townhomes: Current Inventory. Alexandria, MN

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I checked the Greater Alexandria Area Association of Realtors Multiple Listing Service this morning, there were 86 townhomes for sale with an Alexandria address.  I was told that someone had said there were over 120 for sale in the Alexandria area.

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Been Really Busy here in Alexandria, MN:)

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Sorry that I haven’t blogged for awhile.  Been Really Busy.  I have sold 9 of my home listings and 1 lake lot in a 3 week period.  Plus, I listed a bunch.  I hope my staff isn’t too worn out yet, we just getting going.  Been a long winter.  Although, I can’t complain, we have had consistent and steady sales right through the 4th quarter and the 1st quarter… they were tough months though.  Good thing I saved some powder from the beginning of 2008 to help carry us through.  I hope that the rest of the industry is fairing okay, because sales were down.  Based on where the past few weeks has been, I gotta believe that the worst is definitely over from that recession.  It won’t be easy here for awhile, my prediction is that the rest of 2009 will remain relatively flat for pricing with sales posting a modest increase over 2008.    The inventory continues to trend downward, which is a good sign.  If we ever get back to the 2004 inventory levels, (however, I don’t know if that is possible) we would have a sellers market again.    I do see a seller’s market again, it might be a few years, but that will happen.  The business of real estate is fairly predictable, and Alexandria is fairly predictable.   If I seen a 10-15% drop in pricing from it’s high on some of the inventory, I would say that was on the extreme side of the sales.  Now in Arizona, Florida…they had product that was down 70% from it’s high.  That didn’t happen here, if it did…well, I gotta believe that you could get it for free then in Phoenix(I’m a little partial to Alexandria).  Check with the assessors, their data shows consistent upward momentum in pricing.   Better yet, I’ll go and get the report and load it up on my blog. 

What has been confusing for a lot of folks that I see, is that they had an appraisal from 2005, 2006, or say 2004 that said X.  When it’s realized that the X number is unattainable, they lost money.  But from what was paid in 2002, 1998 or prior and eventually sold for today, they made money.  Maybe not as much as the high of the market, but nonetheless, there was a profit.  If you had never been in a recession before, you probably never believed that real estate could go down?

Historically, real estate will earn 3% or more on average.   With leveraged funds, tax benefits and appreciation, the returns can sometimes be in the double digit arena.  This has been the nature of real estate for most of my career.  When the market went ballistic, I never felt that it was real.  I personally did 117 closings in 2004 with over $30,000,000 in closed sales volume.  No assistants, just an incredible amount of hard work and long hours.  The tax man loved me, I think I paid for a nuke that year.  But the returns were not real, that’s when you know it’s going to change.  I told my old partners in May 2005 that the market needs to trend downwards now and maybe at a modest pace, because it needs to correct itself.   My sales volume went between $15,000,000 to $20,000,000 in unit sales volume/year from 2005 through 2008.  I think that we would have made the correction work had it not been for $4.00 gas.  I believe that finally took American’s consumer confidence down in October to the 1982 levels and the final death blow to world-wide markets.  If I had more power, I could have maybe done something about that, but I think that I will stick to real estate in Alexandria.

On another note, I was reading the spring 2009 Snow Goer magazine and found this report: POLARIS REPORTS RECORD EARNINGS  For the full year ended December 31, 2008, Polaris reported net income from continuing operations of $117.4 million for the year eneded December 31, 2007, reresentinga 13 percent increase.  Sales for 2008 totaled $1,948.3 million, an increase of nine percent compared to sales $1,780.0 million for 2007.  “In 2008, we delivered record sales and earnings per share and gained market share in every one of our businesses, despite a weakening operating environment and uprecedented volatility in the world’s financial markets,” said Scott Wine, Polaris Chief Executive Officer.

“During the fourth quarter the retail sales trends for the powersports industry and Polaris weakened significantly as the overall economic environment continued to deteriorate,” Wine said.  “These retail sales trends for each of the industries and geographic markets in which Polaris competes are expected to remain soft for much, if not all, of 2009.  As a result, we will be more conservative with our production and shipment expectations for 2009.”

Snowmobile sales increased 19 percent during the 2008 fourth quarter compared to the prior year’s fourth quarter.  the increase reflects the benefit of product mix changes related to the timing of shipments of new models within the year, according to Polaris’ press release.  For the full year 2008, snowmobile sales increased 15 percent compared to the prior year reflecting lower dealer inventory levels and good snowfall.  CONGRATULATIONS, POLARIS!  (I thought that was a great article)

Right next to that one, was one about Arctic Cat.  Same story…SALES AND PROFITS WERE UP IN THEIR SNOWMOBILE BUSINESS, COMPARED WITH THE YEAR PRIOR!

Like I said before, turn off the news…they want you to believe that all is BAD.  That way they (the news media) make money.  It’s  a crazy world, but protect your brain and what you feed it.  You’ll be a lot happier:)

I gotta go and sell some more real estate, it’s hard work to keep up.  Thank the Lord my Team is so good.

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