LakeHome Statistics- Alexandria, MN: Quarter 2, 2009

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Finally…Sorry it took so long in July to get out 2nd quarter stats.  I would like to have had this done a little sooner…  In Douglas County for 2008 we had 15 sales in the 2nd Quarter totalling$6,834,775 with an average sale price of $455, 651.   In 2009 we had 15 sales in the 2nd Quarter totalling  $4,603,633 with an average sale price of $306,908. 

In 2008 2nd Quarter:   we posted 1 sale under $200,000…4 sales between $200,000 and $300,000…1 sale from $300,000 to $400,000…4 sales between $400,000 and $500,000…2 sales between $500,000 and $600,000…1 sale between $600,000 and $700,000…3 sales between $800,000 and $900,000.

In 2009 2nd Quarter:  we posted 1 sale under $100,000…3 sales between $100,000 and $200,000…6 sales between $200,000 and $300,000…2 sales between $300,000 and $400,000…1 sale between $400,000 and $500,000…1 sale between $600,000 and $700,000…1 sale between $700,000 and $800,000.

Total for 2008 1st Half:  27 sales at $11,124,775 for an average sale price of $412,028

Total for 2009 1st Half:  25 sales at$8,045,733 for an average sale price of $321,829.  Our average sale price has dropped, and primarily from the lack of sales activity over $400,000.   Last year there were 14 sales over $400k in the first half of the year, in 2009 we had 6 sales over $400k.  The sales activity is primarily concentrated under $400k in 2009 representing 76%, whereas last year it was significantly less at 48% of the sales under $400k.

Statistical Information provided by the Greater Alexandria Association of Realtors Multiple Listing Service

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Residential Sales. Alexandria, MN: Quarter 2, 2009

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It has been a very interesting year so far.  As predicted, it appears that this market may “trough” out in 09.  At the present rate of reduction in sales activity, we could end the year with sales numbers comparable to 1997/1998.  Overall, sales activity for the 1st half of the year is down 21% in the residential market from last year.  Ironically, the sales numbers from 2008 were down 21% from 2004.  What took 4 years, may happen now in 1 year.  It has been said that this market would find it’s bottom after the 1st quarter and then slowly progress from there (real slowly is more often quoted).  We’ll see, 4th quarter could finish with a bang, there are some great deals out there for buyers.  If there ever was a time to buy real estate, now is as good a time as we have seen in a long while with low interest rates, plenty of inventory and good pricing.

Anyway, here’s what I have:  In 2nd Quarter 2008, there were 94 sold properties in the residential sector in Douglas County.  26 of them were in April, 29 in May and 39 in June.   I marked 7 of them as REO or Bank Owned representing less than 8% of the sales activity.   By price:  $0-$100,000 there were 16 sales;  $100,001 to $150,000 there were 30 sales;  $150,001 to $200,000 there were 23 sales;  $200,001 to $300,000 there were 19 sales;  over $300,000 there were 6 sales.

In the residential section for 2009, there were 77 sales in the 2nd Quarter, 11 of these were REO/SS representing 14% of the sales.  We are having more “good” sales in the 2nd quarter than we did in the 1st quarter (foreclosed and short sales are not considered “good sales”).  There were 20 closed sales in April, 36  in May and 21  in June.  By price:  $0 to $100,000 there were 13 sales.  $100,001 to $150,000 there were 33 sales.  $151,001 to $200,000 there were 21 sales.  $200,001 to $300,000 there were 10 sales.  Over $300,000 there were 0 (zero) sales.

In 2009, there are 116 closed sales to end of 2nd quarter.

In 2008, there were 147 closed sales to end of 2nd quarter.

This represents a 21% reduction in sales activity year-to-year, same percentage as 04 through 08, only a lot less of the time.   Again, we won’t know the finale of this market till the end of 2009, let’s wait and see. 

First quarter 09 sales were down 26% over 2008.  Second quarter down 21%.  The silver lining…”once we are at the bottom, it will get better every day thereafter”.

One last note, my sales here stand at 42 closed sales since the first of the year.  If sales continue at the present rate, we will surpass last years volume.

Statistical information provided by the Greater Alexandria Area Association of Realtor Multiple Listing Service.

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Existing Home Sales…Nationally (from Alexandria, MN.)

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Reading the National Association of Realtors Existing Home Sales data,  I see potential and a great future.  The pricing was headed for a correction:  in 1994 the median price of an existing home was $107,200.  In 2006 it was $221,900,  in May 2009 it was $173,000.    It is a little early to tell what 2009 sales will be but in a nutshell…2006: 6.478 million sales;  2007: 5.652 million sales;  2008: 4.913 million sales.  Forecasted for 2009 is presently at 4.77 million sales, this is has been upwardly revised since January’s 4.49 million sales data.  Real Estate Insights in February 2009 has 5 million in sales predicted.  In reading the Wells Fargo Securities report of 7.17.09, I quote: “Sales of existing homes rose 2.4 percent in May, pushing sales up to a 4.77 million unit annual rate.  Existing home sales have been holding in a relatively tight range since late 2008 but likely bottomed in January, putting the peak-trough decline at about 38 percent.  While existing sales have increased for two consecutive months, distressed sales accounted for 33 percent of activity in May.  With distressed sales still representing about a third of existing home sales, we are not expecting a near-term rebound.  We expect sales will continue to hold within the same narrow range increasing a modest 0.2 percent to a 4.78 million unit annual rate.  Since existing home sales represent closings (as opposed to contract signings in the new home sales) these data represent sales contracts around March and April when the 30-year fixed mortgage rate broke below five percent.” 

In Alexandria, 1st quarter stats concurred that about one-third of our sales locally were distressed sales.  However, I do see that 2009 may outperform 2008.  My sales here are at 42 closings so far for this year.  Last year, it (closed sales)was 68 total; in 2004, it was 116.   I do very little foreclosure work, last year it was less than 6% of my sales activity.

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Housing Starts Rose in June

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June’s modest increase in single-family housing starts is a pleasant surprise and reflects some slight improvement in the housing market.  Starts likely bottomed out earlier this year when the extreme lack of credit drove single-family starts to modern era lows.  That earlier drop in home building brought new construction below demand, creating an opportunity for builders to begin a few new projects.  Housing starts for June 2009 @582,000

Information provided by Wells Fargo Economics Group.

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Recovery…When? Or Better Yet…Why?

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I’m reading this report where economist Robert Reich was asked that question.  He said, “Recovery isn’t going to happen, period.  The economy can’t “recover” because it can’t go back to where it was before the crash, Reich said.  So, instead of asking when the recovery will start, we should be asking when and how the new economy will begin, he said.  What will the new economy look like?  Nobody knows”, Reich said.

I love this, people keep talking about recovery…this makes more sense to me.   Why “recover” and go back to where we were, let’s move into a better future.  Do your own envisioning about where this will go.  Think positive!  It is going to be an exciting time that we are about to enter.  Negative thinking will only destroy your potential.   You should be able to see all kinds of things on the horizon, from where we are today.  Make moves now to “POSITION” yourself for the future, because it is changing.

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Real Estate Trends in the City of Alexandria, MN: Spring 2009

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In reading the report from the Alexandria, MN City Assessor, it is clearly evident that the volume of sales has retreated from it’s record highs.  What is most interesting about all of the data is that the median sale price is up from 2002 about 35%.  Another interesting comparison to that is the U.S. Census Bureau’s Report released on new homes built in 2008 showed that the average sales price of new single-family homes sold was $292,600.  In 1998, the average sales price was $181,900.  This is a price increase of over 60%.

I expect that the Alexandria, MN City Assessor is correct in saying that we are probably at historical levels for sales.  The highs from 2002 to 2005 were excessive, it was a crazy time.  The inventory levels climbed 50 – 60% in 2005 here and stayed.  The market today, I think is fine.  At my office, we have had 39 closings this year with over $7,000,000 in real estate.  The problem I see with the market is still too much inventory.  Sellers are still wanting too much for their property to what the market will bear…it would be best to wait to list till the market recovers.  This is a very hard thought to transmit, it appears that they can always get their property listed at any price.  This tends to glutton the marketplace, and slow the sales activity as buyers become confused and frustrated.  Imagine our market if we reduced the available properties for sale to 50% of the current inventory?

(If you want the housing report from the Alexandria, MN City Assessor, email me and I will send it to you.)

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