1982 Recession

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I was asked about the market during the last (significant) recession of 1982 and this is what I remember most…

…that there was very little debt, a lot of the real estate was paid for, so to get it sold, we used the contract for deed instrument most of the time and with amazing results.

people didn’t have a lot of need for the things of today, therefore, household income was less and folks were quite satisfied with warm homes and plenty of good food to eat.

there was no such thing as a second mortgage

people did not shop with credit cards

home equity loans did not exist

stores were closed on Sunday, consumerism was far less elevated

there were more gravel roads, taxes and government spending were less

we had less TV, CNN did not exist

houses were smaller, easier to heat, less taxes

the welfare department had a smaller staff

you needed a down payment to buy a house

if you screwed up your credit, you had to wait till it was clear before getting a mortgage. No Exceptions

that’s what I most remember

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Straight Talk 1

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Real Estate and the Average American.

Most of the people in America are average working folks with families, jobs, houses and payments. We have tuition payments, car payments, utility bills, medical bills, mortgages and more…basically 8 days of payments on a weekly paycheck. So for most Americans, this is normal.

The one thing that Amercians do poorly is saving money. Lots of money. We are fantastic at consumerism, I know that I do my part, but spending is what we do well and saving is what we don’t do so well.

If Americans habitually saved 10% of what they earned every year, you’d always have money left after your bills…it’s the secret.

Invest your savings wisely; I, of course like real estate…be wary of leverage though. Over time, Real Estate, especially free and clear real estate is a GREAT ASSET. Don’t Wait to Buy Real Estate, Buy Real Estate and Wait.

Even 50% leverage can be risky. I seen farmers back in the early 1980’s with 50% leverage all of a sudden become 100% levered and then they were gone. If you entered this recession highly leveraged, you’re probably gone too. Levered real estate investing is very risky, make sure you have a contingency plan for when the market turns on you.

“I don’t mind sailing in rough waters, I just want to get home to a safe port alive.” Randy Fischer

Save, Invest, Enjoy.

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Alexandria MN Sales Down. Market Date 5.28.2011

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I read the Alexandria paper this week and it said that home sales were up statewide up over 5% this year from last year. So I thought that I’d better check the local data.

My findings are still very similar to earlier first quarter reports.

Closed sales in Douglas County from January 1st to May 28th for the respective years are as follows:

2010: 116 closed residential sales
2011: 86 ”

Sorry for the bad news, but this represents about a 26% decline from last year. That’s sizable, but with no government freebies…we can expect a little dip.

Source: Greater Alexandria Area Association of Realtors Multiple Listing Service

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Current Inventory

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In looking at the data this moring for inventory, I find that last year on this date, we had 318 residential listings in Douglas County.

This year now, we have 295. Maybe, just maybe, we will start to see some let up on the supply side.

In lakehomes, we had 234 listings on this date last year. This year, we have 236. Almost a mirror image. Last year, we peaked on July 23rd with 268 listings in the MLS in Douglas County. We will wait and see what the data has to say then.

Source: Greater Alexandria Area Association of Realtors Multiple Listing Service

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Minnesota’s Homeownership Rate Soars

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MinnesotasHomeownershipRateSoars
From a report in 2000, it showed that Minnesota had one of the highest in the nation for homeownership.

Source: Minnesota Association of Realtors, Minnesota Planning Offices

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Why Home Sales Will Rise This Year

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WhyHomeSalesWillRiseThisYear

I retrieved this article from the National Association of Realtors magazine. Read this story…

~More Jobs
~Rising Stock Market Wealth
~Rising Apartment Rents
~Continuing High Affordability Conditions
~Home Values at Historically Justifiable Levels
~Investors Looking to Hedge Against Inflation
~Foreigners Buying U.S. Homes on the Cheap

…there’s more in the article

Source: National Association of Realtors

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Existing Home Sales.Nationally

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ExistingHomeSales.April2011The April report showed a dip from March of about 40,000 units. The news media just pounces on this stuff. What they don’t tell you is the 2009 and 2010 sales years both had TAX CREDITS fueling the sales data. In 2011, NO TAX CREDITS and the sales are above what they were last year. I think that the real estate market overall is healthier than the news media gives it credit for. If the market is a positive over last years sales statistics without any government involvement, wouldn’t that be a good sign? This is a real market in positive sales territory…we still have too much inventory. It also appears that the foreclosures are slowing down from what I’ve been reading. That will help pricing as time goes.

Source: National Association of Realtors

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Sales to Date Since January 1st. Lakehomes. Alexandria MN

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Doing the lakehome sales closed data for the year, I find the following information to share…

Closed lakehomes for Douglas County from the 1st of each respective year to May 20th of each respective year shows the following data:

2011: 15 Closed Lakehome Sales
2010: 26 Closed Lakehome Sales
2009: 15 Closed Lakehome Sales
2008: 20 Closed Lakehome Sales

Been a rollercoaster…

Source: Greater Alexandria Area Association of Reators Multiple Listing Service

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Sales To Date Since January 1st. Residential. Alexandria MN

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According to the Multiple Listing Service this morning, sales are hangin in there. Looking at data going back a few years (recession era), this is a real market…no government induced tax credits! Here is the data for sales closed in the Greater Alexandria Area Association of Realtors Multiple Listing Service in Douglas County…

77 Closed Sales: Since 1.1.2011 to 5.20.2011
102 Closed Sales: Since 1.1.2010 to 5.20.2010
80 Closed Sales: Since 1.1.2009 to 5.20.2009
91 Closed Sales: Since 1.1.2008 to 5.20.2008

Source: Greater Alexandria Area Association of Realtors Multiple Listing Service

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Death of the McMansion?

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Death of McMansionPulled this article from Slate. Dated May 11th, 2011, this is one man’s opinion about the future of housing…you might want to consider his thoughts. I tend to run a close parallel with this thinking for the moment. We won’t know the answer to all of this for about 5 years from now.

Source: www.slate.com

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