John Murphy’s MEDINA REAL ESTATE REPORT

With the Federal Reserves emergency interest rate reduction of 3/4% of one percent yesterday, that launched a massive rally in the bond market which in turn has led to a significant reduction in 30 year conforming mortgage rates.

Each day, Edina Realty Mortage posts its rate sheet online.  You can find it here and I will also add it to my links on the right side of the blog.  Today we were quoting 5 1/8th for a 30 year conforming loan (limit $417,000) and 5.75% for jumbo loans (over $417,000).

Based upon what sold in the MLS, 2007 was not a good year to be selling lots and land in Medina.  Only one lot sold in Medina in 2007.  That was 20 acres that sold for $750,000.

In 2006, 7 lots had sold for a total of $5,752,000.  If you back out the small single family lot that sold at 2933 Ardmore for $164,000 for a .34 acre lot, that leaves a total of 6 parcels that sold for $5,588,000 representing 70.2 acres.  That amounted to $79,601 per acre.

The fact of the matter is in looking at this data, if you wanted a decent sized lot for your country home in Medina, you were looking at approximately $90,000 - $100,000 per acre in 2006 and in general it would cost you close to $1,000,000 to buy such an acreage lot.

Given the slowdown that occured in 2007, it’s difficult to know what the true cost of an acreage lot is today, but there was one sale as mentioned above for 20 acres and $750,000.  I believe the more important thing to look at in this sale is not the $37,500 per acre, but rather the amount of $750,000.  The reason I say that is that in looking at past history, larger lots in Medina have gone for between $900,000 - $1,200,000 for anywhere between 10 - 20 acre lots.  The key is the overall price of the lot more so than the price per acre.  Some have historically paid close to $100,000 per acre for the smaller parcels and $50,000 to $60,000 per acre for the larger parcels (i.e. 20+ acres).

Here are the list of active lots and land for sale in Medina as of January 18, 2008.

2930 Parkview Drive, Medina, MN is the featured home to be auctioned at the Twin Cities new construction auction scheduled for January 26-27th.

They say the home as a value of $2.5 million.  I’ve been it in.  It’s a nice home with about 4,700 total finished square feet.   It’s located directly across from Baker Park in Medina.  It’s beautiful county out there.  The views are awesome of the sunset and sunrise as this home sits on a hill.  It also has views of School Lake in Medina.  The lot is 6.5 acres.  There is an additional 24 acre, buildable lot that someone could purchase as well.

There’s another big real estate auction coming to the Twin Cities. Apparently these are all new construction properties. Most of them are in the outlying areas in the Twin Cities. From what I’ve heard, these are all financed by Countrywide.

If you’re interested in going, make sure you preview the properties you’re interested in first. Homes will be open this coming weekend from 12pm - 4pm both Saturday and Sunday.

Here’s the initial web site with some information. The web site design is awful and it’s difficult to actually find out which homes are for sale. Also note that every home I saw online has a reserve associated with it. That means that in order for it to sell, the bidder must achieve some kind of minimum bid. I did not see any absolute auction houses.

If you want to see the specific homes for sale, you can view them here.

I just wanted to put in a plug and a congratulations to a colleague of mine, Mimi Ryerse, who has decided to jump in to the real estate blogging arena. Mimi has focused on the Orono, MN real estate market for years. Her blog is entitled, “Orono Real Estate Update.”
If any of you have tried blogging in the various fields that you serve, you know that it’s not easy. I encourage everyone I know to start blogging, but few have taken it up. For real estate professionals or anyone else in the personal services marketplace, blogging encourages transparency which is needed in all businesses, but particularly with real estate.

Congratulations Mimi and happy blogging!

The Minneapolis Association of Realtors just published their annual review of Twin Cities home prices and they note that the median price was down 2.2% in 2007.

The Star Tribune published this article about the overall real estate market but the more interesting and useful item is this table that’s available online.  It has comparisons for over 100 area cities for 2006 vs. 2007 in terms of sales volume, average prices and median prices.

Here is some additional Twin Cities real estate sales data for 2007 depicted in a couple of graphs.

President Bush signed The Mortgage Forgiveness Debt Relief Act of 2007.  This will help those who are facing short sales on their mortgages.  The law suspends, for 3 years, the IRS coming after homeowners with a tax bill based upon the debt relief they have received from their bank in a short sale or foreclosure.

Hennepin County had 29 Sheriff’s sales for the first official business day of 2008 (January 2, 2008).

To see the 29 properties that were sold at the Sheriff’s sale, click here and then you can add the search parameters on the lower right hand corner of the page.

I ran the search for the first day of the year in 2007 and it looks like it was on January 3, 2007 when the first sales showed up.  On that day there were 28 foreclosure sales.

The Minneapolis Association of Realtors just released the latest area real estate stats:

Savvy buyers actively looking for a home to buy are in the driver’s seat in the Twin Cities housing market. The supply of homes for sale continues to set records, with new listings for the week ending December 22 rising above the same week last year by 17.2 percent. Approximately 51 percent of these properties are re-lists that have already been on the market in 2007—a common ratio during the holiday season. Pending sales declined by 9.3 percent for the same time comparison. This is an improvement over the lackluster numbers seen last week.

It’s interesting to see that the pendings are down only 9.3% (see page 3 of this week’s report). They have been running between 17-27% down for some time.  One week doesn’t make a trend as we’ll need to see this statistic move in to the single digits for many weeks in a row in order to count this as an improving market.

For those of you who like to follow crime in Minneapolis, there is a new blog on the Star Tribune’s web site for blogs at www.buzz.mn.

The blog is called mplscrimewatch and used to be found here.  According to the authors, the blog on the Strib site is being monitored by James Lileks.

While most of the really nasty crimes occur in Minneapolis, there is no doubt serious crime is creeping in to the suburbs.  Since the Minneapolis government doesn’t seem to be able to stop crime, it will continue to grow and spread.

The elites who run the levers of government and the media don’t want all the bad news to be reported.  It’s nice to see some citizen journalists take this important project on.