John Murphy’s MEDINA REAL ESTATE REPORT

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!

Joe Sensor’s Sports Grill & Bar is getting ready to open in Plymouth at the current location of Howie G’s Steakhouse. This is in the Rainbow shopping center at the corner of Highway 55 and County Road 24.

Joe Sensor’s seems like a better fit with it’s more casual atmosphere and less expensive entrees. That seems like a better fit for family friendly Plymouth rather than a fancy steakhouse.

It came as a surprise yesterday when news broke that the Star Tribune was sold by McClatchy to a private investor group called Avista Capital Partners for $530 million.  McClatchy will also receive a tax benefit of another $160 million approximately.  The company had purchased the Star Tribune with much fanfare in 1998 for $1.2 billion.  That’s a $500 million reduction in the value of the property in 9 years.
Classified advertising and subscriptions have been a real driver of revenue for newspapers, but with the advent of the internet, classified advertising in print is doomed.  Add to that the Star Tribune’s unrelenting liberal/leftist agenda in its news and editorial divisions have driven away large numbers of readers.

From a real estate perspective, most Realtors today only run print ads to satisfy their sellers.  They are a total waste of time and money otherwise.  It’s only a matter of time before the big real estate brokers pull all of their advertising from the Star Tribune.  The auto dealers will be next.  There’s a good chance you’ll see this occur during 2007.  Perhaps Avista can turn this around?  I would imagine one of their first phone calls will be to the CEOs of Edina Realty and Coldwell Banker Burnet.

The Minneapolis-St. Paul Business Journal is running a poll as to gauge the public’s opinion on the Star Tribune purchase.  It looks like the more people believe the editorial product will be improved with the new owners.

Yesterday I came across this story that reported that Alan Greenspan, former head of the Federal Reserve Board, stated that the worst may be behind the housing market and that we might be in the early stages of the recovery.

Additionally, some Wall Street analysts have recently upgraded some of the big housing stocks stating the worst is over according to the BusinessWeek story this week.

One of the things I have been trying to get my arms around is how fast the housing market decelerated in the past twelve months.  I believe because of the pace of the world we live in today, 24/7 news, the internet, technology and the power of the media in conjunction with modern business practices that has enabled “just in time delivery,” we have witnessed an operational response by the home builders that might put Silicon Valley to shame.  We are used to reading about the rapid response of today’s leading medical and information technology companies…but home builders?

In a previous post, I commented that the local building permits were down 50% from one year ago.  That is a remarkable adjustment and deceleration of projects.  While the doom and gloomers will note that the world must be coming to an end, I see this as an unprecedented, swift, smart response from the local home builders to get the pain over with quickly.

There are many people I know who are waiting to buy or sell to see if the market is any better come spring.  The pent up demand could surprise the “experts” over the next 12-18 months.

I just thought I would express my excitement as I just filled up my tank for $2.17 at the Holiday store at County Road 24 and Highway 55 near Rainbow in Plymouth.  There has been speculation that gas could certainly come down to $2.00 per gallon by Thanksgiving.

Given the massive oil reserves found in the Gulf of Mexico recently, combined with the unbelievable expansion of gas refineries outside of the U.S. and particularly in India, we should have plenty of fuel for a long time to come.

Cheaper gas certainly won’t hurt the housing market.  It will also help those who live in communities further out such as Medina, Corcoran, Independence, Delano, etc.

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.

If you’re looking for a highend home theater, AV or any kind of home environment system (i.e. lighting, HVAC, and window blinds etc), you should consider using the services of Tom Brandabur at Clarity located at Highway 55 and Vicksburg.

Last week I had the opportunity to stop in and see the Clarity shop and little did I know I was in for such a treat.  Tom Brandabur, founder and president of the company, spent over 30 minutes with me showing me everything Clarity can do.  They have built home entertainment and home theaters for the rich and famous in the Twin Cities.  But they also design and install systems for all price ranges and they can install them in both new and existing homes.

If you want to see the latest in home theater technology, stop in and see the folks at Clarity.