Wake Up, Shift Happens was the title of the continuing education course I attended today sponsered by the Minnesota Assocation of Realtors. As a whole, the class was a summation of where the real estate market was, where it is today and where it is going. The data the course is based on is from the twin cities real estate market which in many ways reflects our local Southeast Minnesota (Rochester) market. Some highights were listing inventory is down and sales are slightly up from 2007. If this trend continues, we should start to see prices halt their downward trend and start to stabilize. In 2007 prices went down about 2% but year to date 2008 prices have dropped over 12%. Almost 50% of the sales in the twin city market for the month were “lender mediated” which means the sale was either a bank owned home taken by foreclosure or a “short sale” where an agreement is made between the lender and the borrower to sell the house for less then is owed. So where is the market going? The instructor admitted that just about all of their predictions they made at the begining of the year were wrong but felt that the lender mediated sales trend would continue and prices should indeed start to stabilize. The good news is that the affordability index which measures financial ease of home ownership has increased over the past two year. The affordability index is the median price of homes, median income and the cost of money (interest rates) to own them. This is good news for everyone!
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