Minnesota Real Estate

Why does Minnesota have one of the highest home ownership rates in the nation? Perhaps its because Minnesota real estate is an investment in a state that enjoys a national reputation for a high quality of life.

High Quality of Life

This reputation holds up to scrutiny by almost any measurement you choose. Minnesota was ranked by Morgan Quitno’s 2007 report as the second most livable state in the union. Who ranked last? Mississippi, of course! Are we going to tell you who ranked first? No way! Why? Because we want you to buy a home in Minnesota. Besides, we are healthier, safer, economically stronger, and more socially involved than folks from just about any other part of the country. Here’s why we think so:

• Minnesota has one of the lowest poverty rates in the country. Minnesota’s median is higher than the United States median in 2003. Median income household income was reported at $62,530 in 2005. The regional economic powerhouse called the Twin Cities plays its part in all of this. According to last year’s report from the Minneapolis Area Association of REALTORS states that “robust population growth, regional economic health, and quality housing stock paints a picture of the Twin Cities remaining to be a great place to buy and sell residential real estate.”
• In 2004, Minnesota’s violent crime rate was only 27 per 10,000, compared to the nationwide average of 47, per 10,000. Perhaps that is because our neighborhoods have a close sense of community. A report by Volunteering in America: 2007 Trends and Rankings placed the Twin Cities at the highest level of volunteering activity. Purchase almost any home in Minnesota, and you will be buying into a neighborhood where people will know who you are. They will also be there if you need them – even in a big city like Minneapolis! The phenomenal community response to the 35W bridge tragedy proves this point well.
• The average ACT score for Minnesota leads the nation at 22.3 out of 36 possible. Minnesota has the highest number of citizens who have a high school diploma. The state supports 32 colleges in the MNSCU system. The quality of education here is one of the most popular reasons for making your home in Minnesota.

Did we forget to mention all of those lakes? Even if you don’t buy a Minnesota lake home, you will probably be just a stone’s throw from a body of water. We have over 11,000 of them that are at least 10 acres or more. Owning Minnesota lakeshore real estate means that you won’t even have to leave the state for your vacation times. You won’t want to, either.

Examining the Minnesota Real Estate Market

According to a 2007 2nd quarter report, the Minnesota Association of REALTORS says that “Strong economic conditions, historically low interest rates and affordable prices help keep housing values strong in Minnesota.”

But what about all of those homes on the market? Right now, the Northstar Regional Minnesota MLS alone shows over 42,000 single family homes for sale, including single family homes, townhomes, condos, lakeshore, and executive homes. That seems like a lot. And what are we to make of the negative, sensationalized reports that hear about from the national media? Is the sky really falling? Let’s break the report’s facts down so we can really see the big picture:

• Affordability remains a prominent factor in the Minnesota real estate market. According to the latest HUD estimates based on family income, the average family makes an income that is 36.4% larger than what is required to afford mortgage payments on a typical Minnesota house. That’s cold comfort to those who are having mortgage trouble right now, but it certainly is a positive note for the housing market overall.
• The economy is showing a healthy rate of 3.2% growth. (based on annualized growth in GDP annualized from 3.2% from the second quarter of 2007 through the rest of the year.)
• The sale price to listing price ratio stands at 98.4%. This is not much less than it was during the hot markets of 2002-2005.
• Average sale prices actually dropped only 0.8% from Q2 2006 to Q2 2007. (Keep in mind that home prices grew five times faster than inflation in the period between the start of 1998 through the end of 2003. The slight drop of 0.8% in home prices is not a hard fall-back.) Sales volume only decreased 3.25% during this time.
• The state’s unemployment rate of 3.8% is relatively steady, indicating a stable economy.

The market has certainly moved toward a buyer’s market, but if you take a look at the hard numbers, you have a more realistic picture of the Minnesota real estate market. No one has a crystal ball, but the future does not look so bad either. REO homes are starting to move, and there are a lot of potential buyers out there who are sitting on the fence, waiting for something to happen. They will jump off as inventory starts to deplete.

Since 1950, home prices in the Twin Cities gained an average of 5% per year. In our state, you are still better off holding title to a house than a stock certificate. Real estate will always be the best investment you can make. Real estate still remains one of the most promising and exciting career choices ever.

Independent Brokers Realty is a Real Estate Agency for Minnesotans.

Our company is the largest, oldest, family owned real estate company in the state. For good reasons. Minnesotans have always been wary of large national and multi-national franchises that make corporate decisions that favor the company, but are not necessarily in the best interests of either individual company team members or its clients. That is just simply not “Minnesota nice!” Independent Brokers Realty makes decisions that are based on integrity, generosity, and what is best for both its clients and its agency. Independent Brokers Realty thinks more in terms of family spirit than corporate structure or policy.

If you are a home buyer or home seller, you will find that our agents have the flexibility to place your needs above corporate structure. Our agents are encouraged to make their own decisions, while ensuring the highest level of integrity and professional service.

If you are a real estate agent that has an independent spirit and the famous Minnesota work ethic, who wants to succeed, and wants to keep more of your commissions, join us! Just like true Minnesotans, we will be there to help you! Our training and support systems are second to none.

Give Kevin Sharkey a call at 952-949-0263 to chat about services and financial incentives. There will be no pressure whatsoever, and all discussions will be strictly confidential.