John Murphy’s MEDINA REAL ESTATE REPORT

Despite the 45% increase in listings so far this year compared to the same period in ‘05, many cities in the metro continue to experience price appreciation. Homes that are priced well and in excellent condition are continuing to sell. Those that are selling are keeping appreciation rates positive.

If you would like to see the complete report including # of home sales, high price, average taxes, square footage, cost per square foot and average days on market, please e-mail me and I will send it to you.

Below is a comparison of the average sales price for all single family homes, townhomes, and condos sold in the first half of ‘05 versus the first half for ‘06. The source for this is the 13 county RMLS system.

The updates for several cities throughout the metro will be posted tonight 8-1-06.

BusinessWeek recently ran a story on the concept of super garages.  For local Twin Citians who may be fans of Joe Soucheray’s Garage Logic show on KSTP am 1500, you’ve heard about fantastic garages over the years.

Well, now the trend looks like it’s spreading across the country.  Check out the BusinessWeek story to get ideas on what you might be able to do with your garage.

People have more and more toys (motorcycles, snowmobiles, ATVs, cars) and they need the storage space.  As the demographic shift continues with the baby boomers we’re continuing to see the need for 3-car garages.  Many of the upper bracket homes are being built with 4-car garages.

How to take title or ownership of one’s property usually doesn’t come up until you’re sitting at the closing table signing the final documents to take possession of your new home. There are two main forms of taking title in Minnesota - Joint Tenancy and Tenants in Common. If you need an opinion on which is the best way for you to take title for your home, please consult with an attorney.

For more information on the differences betwen Joint Tenancy and Tenants in Common see here.

The Star Tribune ran a story recently called The property tax gap that seemed to highlight something I’ve seen lately in housing transactions.  Because there is a lot of data available on various county web sites, often times buyers and sellers go there to do some research to justify a particular price for a home.  And while this is certainly a good source, it by no means is the definitive source or authority in what the price of a home should be.

For example, I conducted some analysis on homes sold in the Foxberry Farms development in Medina, MN.  To my surprise, I found that some homes had tax assessed values within 2% of market value (recent sold price) and some homes were assessed nearly 30% below market value.  So if you were to use tax assessed value to come up with market value, you would have a huge 30% price swing.

32,900 new jobs were added in the State of Minnesota during the second quarter (April - June, 2006) this year.  This was the strongest growth in jobs in the state in 22 years and it accounted for 10% of the new jobs created in the U.S. during the quarter!  In fact, there are now 73,110 more jobs in MN in June ‘06 versus June ‘05 (2.7% growth in jobs).

This is good news for the housing market.  While increasing mortgage rates mean people can’t afford as much, the underlying job strength will help support the marketplace.

Job creation has been a real disappointment for the State of Minnesota and the Pawlenty administration.  While home builders rapidly increased the number of units built the past 3-4 years, job creation lagged behind.  Now that the builders are pulling back on the number of units they are building, the jobs are increasing.  Provided interest rates remain roughly where they are today +/- .5%, this market should be in better shape in 2007.

With all the doom and gloom about the slowdown in real estate, it’s refreshing to see where there is still some growth across the country.  The Street.com published this article which ran on Yahoo! this weekend.

The Pacific Northwest and parts of Texas are expected to see the best gains in appreciation this year.

For a list of the 10 fastest growing markets, click here…for the 10 slowest, see here.

The Wall Street Journal published this story about the challenges builders are facing with the high cost of land that they have on their books.  Some national builders have walked away from their deposits they had on land they had option contracts on for future housing projects.  (WSJ may require a subscription.  Please e-mail me if you need a copy of this article).

It’s interesting to note that this softness in land prices and housing comes just as the City of Plymouth is getting ready to make way for another 1200 acres to be developed to varying densities in the Northwest part of the City.  Many of those land owners hoping to cash out for top dollar are going to find a very different marketplace today that what the news media was report 6-12 months ago.

The Journal continues to be an excellent resource reporting on the conditions of the real estate market in various cities throughout the country.  On July 5th, they published an interview with G. Kenneth Heebner, who manages the $1.2 billion CGM Realty Fund (this may require a subscription to read the article.  If you can’t access it, e-mail me and I will get it to you). Mr. Heebner discusses the challenges many markets will face in the near future, however, he says “most people won’t have problems and much of the country will be fine.  I don’t think anything will go wrong in places like Texas, Iowa City, or Minneapolis.”

The slowdown in real estate will have the biggest impact on the markets that have seen the biggest rises in appreciation during the past 5 years.  While housing in the Twin Cities has seen good appreciation, it does not compare to that of the East Coast, Florida, Arizona or parts of the West Coast.  For a historical look at Twin Cities housing apprecation see here.

The City of Plymouth is trying to deal with the excalation in land prices by charging developers $5,000 for each new residential unit that gets built in the City to go towards paying for new parks.

Of course, this gets buried in the price of the homes sold, but the home buyer ultimately ends up paying for this.  Surveys have shown that Minnesotans, and particularly the residents of Plymouth, love their parks.  It’s not expected that this 20% increase in this fee will see much push back from developers or residents.

I just happened across this new e-service provided by the City of Plymouth, MN.  It appears that have photographed and catalogued every structure in the city.  They also have the originally survey scanned in.  If you live in Plymouth, plug in your own address and see what comes up.