John Murphy’s MEDINA REAL ESTATE REPORT

Claudia Murphy, age 64 of Shoreview, died July 26, 2007 after a battle with cancer. She was born Oct. 10, 1942 in Fargo, ND to Bill and Marie Collins. After graduating high school at Fargo Shanley she attended the College of St. Benedict in St. Joseph, MN. She married Michael J. Murphy May 2, 1964. After raising their four children, she went on to work 15 years as a senior loan processor for Wells Fargo Mortgage in Arden Hills, MN.

She is survived by husband Michael J.; sons John F. (Janet), Medina & their children Brenna, Jack, Elizabeth, Katherine, Patrick & Ned; Rob L., Minneapolis; Bill C.(Katie), Blaine & their children Allison, Brynn, Jenna & Maddie; daughter Ann Marie (Tim) Thomas, Cambridge & their children Meghan, A.J., Michael, & Stephanie; brother Bill (Mary Pat) Collins, Edina. Preceded in death by parents William & Marie Collins, sisters Jeanne Weiler & Mary Ellen O’Toole.

Claudia loved the Catholic Church and was an active member of Holy Family parish and school; she found great joy volunteering and serving others at Catholic Charities. She was a devoted wife, mother and doting grandmother who loved to attend her 14 grandchildren’s activities. She always had a smile for everyone and will be deeply missed by many.

Mass of Christian Burial 10 AM Monday at The Church of The Holy Family, 5900 W. Lake St., St. Louis Park. Int. Gethsemane. Visitation Sunday 4-7 PM with 6:30 PM rosary at Gearty-Delmore Park Chapel 3960 Wooddale Ave S. and Monday at church 1 hr before mass. Memorials preferred to Prolife Across America.

Gearty-Delmore 952-926-1615

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My dear mom passed away on July 26th after a very difficult past several months. She willingly bore her sufferings with joy and gratitude for everyday that God allowed her to live. She has impacted my life beyond my ability to fully describe. May she rest in eternal peace and joy with Jesus Christ.

I love you Mom and I will carry you with me forever.

Howie Schaber has been cutting hair for over 30 years out of this location in beautiful Uptown Hamel, MN. Recently there has been a pricing war amongst local hair cutting businesses. Fantastic Sam’s moved in to town about two years ago and they have been cutting hair for $11-12 per cut. Now, Great Clips just opened near Target and they have a $5.95 special this month.

When I arrived at Howie’s today for my biweekly hair cut I thought I was in for a deal. It looked like Howie engaged in the price war and was offering $4.00 haircuts. However, when I looked at it more closely, it said $400!

If you’re looking for a great haircut by a fantastic guy and barber, check out Howie’s in Uptown Hamel. Rumor has it former President Bill Clinton may be coming to town and might get his hair cut by Howie. Howie’s press agent is also working with the John Edwards campaign to see if he will visit Uptown Hamel during his next fundraising trip to MN. It will be interesting to see how Mr. Edwards compares Howie’s $400 cut to the one he’s used to getting.

To schedule an appointment for the $400 haircut, call Howie at 763-478-6377. Howies Uptown Barbers are located at 35 Hamel Road, Hamel, MN 55340. Howie only reserves two spots each day for the $400 cut so please call in advance!

In the past ten days, both the Star Tribune and the Pioneer Press have run stories about the continuing slide in the Twin Cities real estate market. (Note, these papers may require registration before you can see the story). The problem is both stories don’t give a full picture of the local housing market.

Both papers published stories based upon the latest new construction activity in the Twin Cities. Permits are down about 30% from 2006 and about 50% from 2005 according to the June press release from the Builders Association of the Twin Cities (BATC). The sharp drop in permits will help the market burn off the excess new home inventory. Certainly, new construction has been hurt worse in this downturn than the resale market. New construction has typically represented about 15% of the market for home sales. During the last few years of the boom it ran up to nearly 19%. Now it’s back on its way toward 15% of the market again. Capital is responding to demand. (For a list of building permits tracked by the Metropolitan Council, here’s the latest data for 2006 for the entire metro. 2007 data is not yet available).
The other challenge the marketplace faces is that the various Realtor boards publish weekly, monthly and quarterly statistics on home sales and the supply of homes. For example, the Minneapolis Area Association of Realtors publishes an excellent report like this each week. The supply of houses in the 13 county area has generally been running near 8-9 months supply. This figure is calculated by taken the number of homes for sale divided by the number of homes pending…i.e. those with a contract on the the home but they have not yet closed the transaction. A market is considered balanced between buyers and sellers at a 5 months supply.
As I see it, the market is becoming stratified…and it’s not the luxury homes versus middle class homes. There is an issue with homes priced at the upper end of the market. However, what I’m seeing is that there are two markets in the Twin Cities…those in the first or second ring suburbs and those homes in third ring or exurban cities. It’s almost the closer you are to Minneapolis and St. Paul, the stronger the market is for real estate. But all the real estate statistics we see roll up all the cities in the 13 county metro area. Cities in the outlying areas are skewing the statistics to show more softness than there really is. For example, St. Michael has nearly the same amount of houses for sale as Plymouth, but it’s population is 15,000 and Plymouth’s is 70,000.
Here’s a sample of the supply of houses in a few cities. The data source is the Regional Multiple Listing Service (RMLS). I ran these searches on July 23-24th. This is for single family homes only.

City:             Homes for sale        Pendings        # of Months Supply of Homes

Edina:                262                        83                    3.16

Maple Grove:      387                        105                   3.69

St. Louis Park:    233                        78                    2.99

Minnetonka:        270                        64                    4.22

Plymouth:           286                        62                    4.61

Eden Prairie:        308                        78                    3.95

Delano:               116                        16                    7.25

Zimmerman:        234                        15                    15.60

Elk River:            308                        38                     8.11

Shakopee:           285                        36                    7.92

Monticello:            160                        14                   11.43

St. Michael:           241                        12                   20.08

The supply numbers will likely increase for all cities as we move toward fall when buyer activity tends to slow. But the point is, the market here in the Twin Cities is not as bad as the reports you read in the newspapers.

Yesterday the City of Chanhassen, MN issued a total watering ban for the city. City officials claim that because we have only received about 60% of normal rain fall for the year that the aquifiers have not been replenished. Apparently two wells have malfunctioned and two more are down for unscheduled maintenance. Here’s the press release. City officials will be driving through neighborhoods contributing to more Global Warming while they look for those breaking the watering ban.
This seems to me to be poor city management of resources. How can a city as successful as Chanhassen have to issue a TOTAL WATERING BAN! (CAPs are found on the city’s web site). I would not be happy if I were a property owner in Chanhassen.

It’s difficult to believe that the city planners have not accounted for a situation in which you would have hot weather, little rain, and a couple of wells go out.

Jason Lewis was mentioning this topic on his radio show tonight at KTLK 100.3 FM. I guess it’s too much to expect that for the fees each homeowner pays for hook up to city sewer and water that the city would actually be able to deliver the water. But this is what you get when you have a monopoly. As Jason Lewis rightly put it, this is what we’ll have when we have nationalized health care. I can’t wait to see that…”NO MORE HEART ATTACKS, PLEASE!” Sorry, but we don’t have capacity to serve anyone else who has a heart attack until further notice.

I’m sure Chanhassen has lots of money for public schools, but good luck getting a glass of tap water the next time you dine at a restaurant in Chanhassen.

This performance by the City of Chanhassen should cause all property owners to think twice before buying in this city.

BTW, does anyone know how much water is currently being consumed by the farmers growing corn for the crazed ethanol movement?

CNN Money has an estate real estate site.   Earlier this month they published an update to their Top 100 Metro Areas Housing Forecast.  Minneapolis is forecasted to be just slightly positive at +.7% growth in pricing.

Judging by some of the recent sales activity for various cities in the Twin Cities, perhaps there’s some hope that the oversupply of housing will finally start to ease.

The Builders Association of the Twin Cities (BATC) has this file stored on their web site.  It’s available to the public.  Builders and developers are able to catalog and list their lots for sale in the Twin Cities metro.  There are also some lots listed for Rochester.  It’s a 19 page pdf file that doesn’t appear to be very well organized or user friendly, but you might be able to find something you’re looking for here if you’re considering building.

It would appear that the Medina, MN housing market is back in balance by looking at the statistics of units for sale versus those pending. Pending activity picked up tremendously in the past couple of weeks.

The way we calculated the monthly housing supply is to take the number of single family homes, townhomes and twinhomes that are for sale (64) and divide it by the number of properties that are pending (13). The number hasn’t been this low in a couple of years.

Note of caution: Medina typically has 65-80 units for sale on the MLS at any given time. Pendings typically run in the 5-10 range so any decrease in listing activity or increase in pendings will have a disproportionate effect. It wasn’t that long ago that the housing supply in Medina stood at 16 months.

From the Minneapolis Area Association of Realtors:

Weekly Market Activity Report:

Week by week and month by month, we have been saying the same thing for well over a year now. The Twin Cities housing market is in a state of post-boom correction and recalibration; both buyer and seller activity are down from 2006. It’s also important to note that the 2006 market was down from 2005, making our current activity levels seem even slower in comparison. Newly signed purchase agreements (pending sales) for the week ending June 23 were behind last year by 9.3 percent and behind 2005 by 33.8 percent. Seller activity is also on the decline, but to a much lesser degree than buyer activity. New listings for the same week were 2.2 percent behind 2006 and 0.8 percent ahead of 2005.

As of the morning of Monday, July 2, there are 34,630 single-family housing units for sale in the Twin Cities region, up 12.2 percent from last year and 60.2 percent from two years ago. Inventory growth has been less dramatic this year due to a relative drop-off in new construction activity. One year ago, new construction housing units for sale accounted for 19.4 percent of total inventory; new units account for just 15.2 percent of inventory today.

This week’s edition of the MAAR Weekly Market Activity Report features an updated Supply-Demand Ratio (SDR) for July 2007 of 9.36, up 38.5 percent from a year ago.

Click here for the full pdf report.