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AUGUST 2011

P. L. Dorn Company, Inc. 720 Main Street, Suite 207 Mendota Heights, MN 55118 651.452.3047

Pending Promise in Minnesota Home Sales After a few years of dire housing news as a result of the nation's recession, some promising signs are beginning to emerge. June pending home sales increased a solid 41.2% compared to the same month a year earlier. "This is wonderful news for the future," said Russ Portele, MNAR President. "Pending sales are a key indicator of the direction the housing market is moving," he said. In June, 8,240 properties had purchase agreements written on them compared to 5,836 in June 2010. This was the highest number of pending home sales since April of 2010, when the federal tax credit was expiring. Year to date, pending transactions are less than 1% below the YTD figure from 2010 and slightly behind 2009. "We're not out of the woods yet, but at least we can see the end of the forest," Portele said. Beyond an increase in pending sales, the Housing Affordability Index (HAI) indicates that home buyers at the median state income have a large number of homes available for purchase. All of the numbers weren't as positive. The median value for a home selling in June dropped 9.3% to $145,000 and number of days it takes to sell a listed property increased 11.8% to 124 days. These numbers are expected to improve once the distressed inventory of homes is removed from the market. In many areas the home data is being impacted by the unusual inventory levels of distressed properties. Download the June 2011 Minnesota Housing Report at www.mnrealtor.com/HousingReport/Jun11

Real Estate as an Investment: optimistic and opportunistic A slowly improving economy, limited new supply and improving capital markets are responsible for the spike in investor confidence. The recent surge has brought to light the investment opportunities that are available to new and seasoned investors. As mortgage rates continue to hang at historic lows and affordability reaches an all-time high, investors are becoming more “risk tolerant” and seeing the thawing markets as a great time to expand their portfolios. In fact, according to a recent survey by the National Real Estate Investor and Marcus & Millichap Real Estate Investment Services, 69% plan to add to their property portfolios in the next 12 months, that’s up 8% over 2010 (61%) a sizable increase. The ability to lock in extremely low long-term rates has been the biggest force in their decision to increase investments and has provided a hedge against a slow recovery as well as any unforeseen economic issues that might emerge. For those who remain sold on real estate’s ability to build equity there are two types of opportunities: the active (single-family homes, apartment buildings) and the passive (home builder stocks, real estate investment trusts.) Active real estate investments are an excellent jumping-off point for new investors interested in perking up their portfolio. In another study conducted by the NAR, the average apartment rent is projected to grow 3.4% this year and another 4.2% in 2012. Trulia.com, a homes-for-sale listing site, also noticed a huge uptick in people interested in homes for rent. One thing’s for sure. If you or someone you know is considering real estate as an investment opportunity, this summer is the season to start researching properties. Investing in real estate isn’t a “get rich quick” scheme, rather, a long-term investment that can be a great choice for people with patience and perseverance. The opportunity to build financial wealth is open to everyone – and for those who can afford to invest in today’s market – now is the time! Please feel free to call us with any Real Estate questions or needs you may have. We appreciate your continued confidence in our services. Paul & Lisa Dorn 651—452 –3047 If you are currently working with another Broker please do not consider this a solicitation.

August Newsletter  

August Newsletter

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