Calmer Waters

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Calmer Waters

Another year has passed and I have 5 years of real estate business completed with my own company and what a ride. I have often said that “I don’t mind sailing in rough waters, but I do want to get safely back to port”. It has been over 30 years ago that I started selling real estate in the Alexandria community and I have really enjoyed my work and the people that I have worked for. Starting a real estate company at the beginning of the Great Recession was probably a lot like base jumping and hoping your chute will open. Once you’ve jumped, all you have left is faith…and some good equipment. In my case, once I jumped; I needed a lot of faith and a good team to fulfill all the details that are required in a real estate transaction. The staff at my office, I believe, is the best in the business. Most of my clients will tell you that they make me look good, and they do.

As far as the Alexandria, MN markets go, there are improvements in all sectors. From new construction to commercial, we have seen improved sales volume for the year 2012. Pricing has not fully recovered to pre-recession levels though and I do not know when that will happen. We need new home construction to return first and then pricing for existing homes will follow in an upward trend. All of existing home prices are based on cost of replacement. If we are not building new homes, then there is too much inventory of existing homes for the amount of buyers that are available to the market and prices suffer (Economics 101: Supply and Demand). What we are seeing now is demand is starting to increase and the supply is starting to dwindle. The Case-Shiller price index for Minneapolis is showing that prices have increased (see December 19, 2012 blog) from the low. That is great news as every market declines to find its bottom…it appears that they may have been already, and then the cycle continues back up. According to that report, prices are still approximately 30% below the high of 5 years ago. For me, in all my years of real estate, real estate has had a positive rate of growth. The returns were never too exciting, but positive nonetheless. Losing 30% of value in a few years time was never on the radar so when it happened, it was cataclysmic.
If the market in fact has bottomed, the next few years should produce some positive growth for those that do own real estate. That’s good news that we have waited for a long time (or at least it seems like a long time).

Consumer Confidence, at its highest level in 4 ½ years (read December 19th, 2012 blog) is touted as the key truth detector of the economy. I have been faithfully tracking it monthly since September 2008 and I am very excited about this most recent report. The Index was at 140 points in 2001 with a low of 25.3 in February 2009. In an effort to give folks the best possible real estate advice during 2008/2009 in an economy that we had never seen before was very, very difficult. Emotionally, I hope that I never have to deal with that again. When you look at where we were with the Consumers Confidence…25.3 points, that’s like no confidence in the economy. The American people showed their resilience in tough times, I am proud to be a part of this country and its future.

The Alexandria Area High School is coming out of the ground. With a 56% voter approval, you cannot say it was an overwhelming majority. But in the school bond business, that is still a sizable victory for the new school. This new school will serve to shape the destiny of this community for the next century. It will show the world that this community is concerned about educating its young adults and shaping their lives for the better. This attitude will mold the building blocks that make up Alexandria and its soul as we move forward with life. You add in the positive environment of the Alexandria Technical College and all of a sudden you have a community that is training minds for future jobs and problem solving. What if Alexandria, MN was to be known as a learning center? It could happen as right now in this region, we are known for our retail, medical, good jobs (Douglas Machine & Scientific, Aagard, Brenton, Tastefully Simple, Knute Nelson, Arrowwood, 3M, Central Specialties, SunOpta, Donnelly, D. Cty. Hospital, 206, Alex Extrusion. Alex Tech, PrimeWest, ITW, ProFab, Henry’s Foods, Randy Fischer Real Estate…that’s over 5000 jobs)…what if education was our biggest export? The new high school, I believe, will move this town farther and faster in the right direction.

My personal sales volume at Randy Fischer Real Estate is at pre-recession levels. I have the utmost optimism for the future, as I always have. This is a great town with great people that all seem focused on a better life. 2012 is going into the record books as a year that was not without strife, but one that makes the future reappear with a brighter light. A quote that I like is “As we sail thru life, don’t avoid rough waters, sail on because calm waters will not make you a skillful sailor”. If you are reading this article, you can be proud to have weathered the Great Recession. It maybe could have been worse. Another quote that may summarize the past from Louisa May Alcott; “I’m not afraid of storms, for I’m learning how to sail my ship”.
So I feel that I was in the storm of the century and now the waters are calm; I think that I may stay here for a little bit and enjoy this market.

Thank you to all the folks and friends that made up my year of 2012. It was another record year for us. We’ll be here again next year, setting sail and knowing me…probably to uncharted waters.

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More Optimism about Rising Home Prices

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An article from the National Association of Realtors

More Real Estate Pros Optimistic About Home Values
Daily Real Estate News | Tuesday, December 18, 2012
More real estate professionals are optimistic about the direction of home prices, according to a fourth-quarter survey by HomeGain of more than 200 practitioners and brokers.

Sixty-five percent of real estate professionals say they expect home values to rise in the next six months, up from 51 percent in the previous quarter. In the fourth quarter of 2011, only 15 percent of practitioners said they expected home prices to rise.

“We are seeing a continued increase in optimism about the direction of home prices,” says Louis Cammarosano, general manager of HomeGain. “Real estate agents expect the recent pick up in the real estate market to continue in the coming two years.”

Indeed, the optimism in home values increases even more the further the outlook: Seventy-nine percent of real estate professionals and 62 percent of home owners say home values will likely increase in the next two years, according to the survey. Eleven percent of real estate practitioners say they expect home values to fall in the next six months.

Here are the 10 states where real estate professionals are most confident about rising home prices over the next six months:

Idaho
Michigan
Arizona
Texas
Indiana
California
Florida
Virginia
North Carolina
Colorado
The following are the top states where homeowner confidence about home values over the next six months is highest:

Arizona
Nevada
Texas
Colorado
Wisconsin
Washington
Michigan
Virginia
Massachusetts
Tennessee
Source: HomeGain

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StoneManor of Alexandria, MN: PROGRESS REPORT – 2012.12.21

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Floor trusses for the 2nd floor go up next week…pretty cool, literally.

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StoneManor of Alexandria, MN: PROGRESS REPORT – 2012.12.20

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This last photo was December 3rd…not much happened till yesterday…walls are going up now. Will upload more photos tomorrow.

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Home Prices

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Lots of folks are talking about the home price increases in Minneapolis. I am uploading the Case-Shiller price index for Minneapolis, Minnesota. What the spin-doctors don’t tell you is where they were. The fact is that once a price hits bottom, or zero, any increase is positive; and that is the case in Minnesota. The price point is still off near 30% from where it once was, but heading the right direction for once.

Read the accompanying reports showing the high and the low pricing for Minneapolis, MN:
Case-Shiller Minneapolis, MN

As you can see, Minneapolis had a high of 169.91 in March of 2007. The low was 110.97 in March 31, 2011. The price index for September 2012 was 120.98. The home price index is still 28.8% off the high of 5 years ago.

Source: Case-Shiller

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Consumer Confidence at HIGHEST LEVEL IN 4 1/2 YEARS

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Check this out…best ever. I hope that we never go back to that recessionary period again. That was tough!!!

Consumer Confidence Survey®
Please visit the Consumer Measures page to learn more about detailed consumer confidence data and CEO confidence data.
Purchase Historical Data
The Conference Board Consumer Confidence Index® Increases Again
27 Nov. 2012
The Conference Board Consumer Confidence Index®, which had increased in October, posted a moderate increase in November. The Index now stands at 73.7 (1985=100), up from 73.1 in October. The Present Situation Index was virtually unchanged at 56.6 versus 56.7 last month. The Expectations Index rose to 85.1 from 84.0 last month.

The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was November 13.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: “The Consumer Confidence Index increased in November and is now at its highest level in more than four and a half years (76.4 Feb. 2008). This month’s moderate improvement was the result of an uptick in expectations, while consumers’ assessment of present-day conditions continues to hold steady. Over the past few months, consumers have grown increasingly more upbeat about the current and expected state of the job market, and this turnaround in sentiment is helping to boost confidence.”

Consumers’ appraisal of current conditions was relatively unchanged in November. Those saying business conditions are “good” declined to 14.4 percent from 16.5 percent, while those saying business conditions are “bad” deceased to 31.5 percent from 33.0 percent. Consumers’ assessment of the labor market improved. Those claiming jobs are “plentiful” increased to 11.2 percent from 10.4 percent, while those claiming jobs are “hard to get” held steady at 38.8 percent.

Consumers remained optimistic about the short-term outlook in November. Those expecting business conditions to improve over the next six months edged up to 22.2 percent from 21.5 percent, while those expecting business conditions to worsen edged down to 14.3 percent from 15.0 percent. Consumers’ outlook for the labor market was about the same as in October. Those anticipating more jobs in the months ahead marginally improved to 20.3 percent from 19.7 percent, while those expecting fewer jobs remained virtually unchanged at 19.7 percent. The proportion of consumers expecting an increase in their incomes decreased to 15.9 percent from 16.7 percent.

The next release is scheduled for Thursday, December 27, at 10:00 AM ET.

For further information contact:

Carol Courter at +1 212 339 0232 carol.courter@conference-board.org

Source: Conference Board

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Alexandria, MN Chamber of Commerce

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Alexandria Chamber

I received this from the Alexandria, MN Chamber of Commerce. My company is a member, has been since I started. Thanks Chamber for all that you do.

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