CURRENT MARKET TRENDS

We were recently among a select group of Realtors invited to sit down with the Edina executive leaders to discuss the rapid changes in today’s real estate market. In attendance was Home Services of America CEO, Ron Peltier. HSA is the largest single brokerage in the U.S., now owned by Berkshire Hathaway (Warren Buffet) and run out of Edina Realty. We wanted to share with you the insights gained from that meeting, as well as our own thoughts re current market conditions. In four words: NOW IS THE TIME!

1) By every indication, real estate is ticking-up nicely. We appear headed for a long, gradual run up.

2) Locally, the market appears to be the most active we have seen in 6 years. In May, Edina Realty's closed units and volume were both up around 40 percent over last year.

3) Housing will continue to be valued into the future as we currently have 30 million more people in America than in 2000.

4) We will continue to see foreclosures, but don’t expect the “steal deals” to continue. Banks are bringing foreclosures to the market now because they can make more money from them. As people have become more comfortable buying foreclosures (and there have been so many of them) sales prices on these properties have risen and we expect this to continue. So, if you are in the market for a foreclosed property, now is the time to purchase.

5) Multiple-offers are back and prices overall are moving up. Last month, one of our largest offices saw an $80, 000 increase in the average sale price. This means that the homes at the lower end of the market are going up in price. And homes valued over $300,000 are returning to the market.

6) Lending regulations have tightened dramatically and will likely continue. If you are considering a purchase, be sure to check with your lender right away. Rules have changed, even from six months ago.

7) A surprise: higher-end, luxury homes are picking-up steam the fastest. The luxury market boom is in part due to foreign buyers which now make up 35% of the national market. We're seeing a comeback of the luxury market here as well, even multiple offers of homes that are well priced and valued over $1 million.

8) We live in a global economy so keep an eye on what happens in Europe. A big slowdown in Europe can’t help but have a ripple effect on the 20 Fortune 500 companies based here in the Twin Cities.

9) Interest rates remain unbelievably low and will likely stay under the low 4’s into next 2013.

10) Investors are active as the long-term future for rental properties appears strong. We have worked with several clients who started as homeowners, but who are now becoming investors of rental properties.

11) We continue to experience a shortage of listing inventory. Homes that are in good condition and well-priced are selling. Quickly.