Percent of Brokerages by Size 80% 70% 60% 58.4% 50% 40% 30% 28.7% 20% 10% 0% #: +23.6% -7.3% +9.9% 0.1% 0.1% 0.2% 0.5% 0.6% 1.8% 2.6% 1,000+ 500-999 300-499 100-299 50-99 20-49 10-19 5-9 2-4 Single Brokers 1 1 2 6 7 22 32 90 356 725 7.2%
Percent of Agents by Brokerage Size 16% 14% 12% 14.2% 13.1% 10.9% 12.2% 12.2% 10% 9.6% 8% 6.7% 8.3% 7.5% 6% 5.3% 4% 2% 1,072 983 819 916 504 625 401 565 922 725 0% 1,000+ 500-999 300-499 100-299 50-99 20-49 10-19 5-9 2-4 Single Brokers
Transacted Dollar Volume: Twin Cities Metro (unadjusted nominal dollars) $18 $16.60 $16 $15.61 $14.89 $14 $13.80 $13.92 $12.64 $12.61 $12 $11.41 Billions $10 $9.43 $9.17 $10.35 $8 $8.15 $8.10 $6 $4 $2 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annual New Listings Twin Cities Region 120,000 108,034 104,962 100,000 88,131 100,039 99,627 93,362 80,000 82,876 81,813 68,851 65,874 72,026 73,650 77,380 60,000 40,000 20,000 +13.5% -0.4% +8.4% -2.8% -11.1% -11.2% -1.3% -15.8% -4.3% +9.3% +2.3% +5.1% 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annual Closed Sales Twin Cities Region 70,000 60,000 50,000 40,000 57,457 60,180 60,063 49,419 41,018 39,550 45,775 38,256 41,589 48,791 53,172 49,604 56,390 30,000 20,000 10,000 +4.7% -0.2% -17.7% -17.0% -3.6% +15.7% -16.4% +8.7% +17.3% +9.0% -6.7% +13.7% 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annual Inventory Twin Cities Region 30,000 27,609 25,000 24,439 25,585 22,659 20,000 18,711 20,801 20,613 17,453 15,000 15,139 13,034 12,698 12,997 10,000 10,166 5,000 +23.6% +11.2% +17.5% +13.0% -7.3% -19.4% +9.9% -23.0% -25.3% -2.6% +2.4% -21.8% 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annual Inventory (April) Twin Cities Region 35,000 33,104 33,290 30,000 30,308 27,763 27,946 25,000 20,000 21,074 23,964 21,644 24,356 18,579 15,000 14,222 15,341 15,930 10,000 5,000 +13.7% -9.7% +40.0% +9.2% +0.6% -16.6% +0.7% -12.8% -23.7% -23.5% +7.9% +3.8% 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annual Median Sales Price Twin Cities Region $250,000 $200,000 $199,900 $229,000$230,000 $225,000 $217,000 $195,000 $192,000 $205,600 $220,000 $150,000 $165,100 $169,900 $150,000$167,900 4.5% below peak 47.0% above valley $100,000 $50,000 +8.6% +5.5% +0.4% -2.2% -13.3% -15.3% +2.9% -11.7% +11.9% +14.4% +7.1% +7.0% $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annual Days on Market Twin Cities Region 180 160 140 133 153 144 133 147 120 105 117 100 80 83 78 76 60 40 20 +26.7% +15.0% -5.9% -7.6% +10.5% -20.4% -29.1% -6.0% -2.6% 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annual Pct. of List Price Rec'd at Sale Twin Cities Region 100% 98.5% 98.6% 98.1% 98% 96% 94% 96.8% 94.7% 94.0% 96.1% 95.7% 96.6% 92.7% 92.3% 92% 91.8% 90.6% 90% 88% +0.1% -0.5% -1.3% -2.2% -3.1% +1.0% -0.4% -1.8% -0.4% +2.2% -0.4% +0.9% 86% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annual Months Supply of Inventory Twin Cities Region 9 8 7 6 5 4 3 2 1 3.2 3.7 4.0 6.0 8.2 7.7 5.4 +15.6% +8.1% +50.0% +36.7% -6.1% -29.9% +31.5% -29.6% +10.3% -9.4% +10.3% -34.4% 7.1 5.0 3.2 2.9 3.2 2.1 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annual Months Supply of Inventory (April) Twin Cities Region 12 10 10.4 8 6.5 8.5 8.1 7.0 8.2 6 4.9 5.0 4 3.8 3.4 3.61 3.63 2-22.8% +69.8% +31.0% +22.1% -22.0% -13.0% +16.4% -39.2% -31.8% +6.6% +0.5% 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Seller s Market (Less than 5 MSI) Buyer s Market (More than 6 MSI) Balanced Market (5-6 MSI) Low supply, high demand Seller at a relative advantage Shorter market times More robust price appreciation Multiple offers more common Sales prices closer to asking prices High supply, low demand Buyer at a relative advantage Longer market times Relatively slower price appreciation or price declines Buyer has more power in negotiation of price Neither side has a market-wide advantage Price growth and market times in line with steady, historical norms
Distressed Sales Rate Share of all Closed Sales that are either Foreclosures or Shorts (Twin Cities MSA, 2005-2015) 70% 65% 60% 55% 61.4% 56.9% 61.6% 56.5% 50% 45% 44.0% 40% 35% 33.9% 30% 25% 28.4% 30.4% 20% 15% 10% 17.8% 15.9% 7.5% 11.2% 5% 0% 1-2005 1-2006 1-2007 1-2008 1-2009 1-2010 1-2011 1-2012 1-2013 1-2014 1-2015
New Construction Market Share Percentage of all Closed Sales that were New Construction, Twin Cities MSA 18% 16% 14.4% 14.8% 14% 12.9% 13.1% 13.1% 12% 10% 9.9% 8% 6% 7.3% 7.6% 6.1% 6.5% 7.08% 7.14% 6.3% 4% 2% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
New Construction Market Share Percentage of all Closed Sales that were New Construction, Edina 11% 10% 10.0% 9% 8.5% 8.8% 8% 7% 6% 6.3% 6.6% 5% 4% 3.4% 4.5% 4.9% 4.1% 4.0% 3% 2% 1.3% 1.7% 1.1% 1% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Townhouse-Condo Market Share Percentage of all Closed Sales that were Townhomes or Condos, Twin Cities MSA 35% 30% 28.2% 29.7% 28.2% 25% 23.7% 25.7% 23.8% 23.3% 24.3% 24.3% 23.2% 22.9% 24.3% 23.6% 20% 15% 10% 5% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Price Comparison - Assuming 5% Annual Growth Recorded ASP 5% Annual Growth $350,000 $310,576 $300,000 $279,153 $250,000 $263,178 $200,000 $150,000 $100,000 $117,053 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
A renter making the median income in the U.S. spent 30.2 percent of her income on a median-priced apartment in the Q2-2015, compared with 29.5 percent a year earlier. The long-term average, from 1985 to 1999, was 24.4 percent. -Bloomberg 2015
Owners' equivalent rent (OER) is a dollar amount published by the U.S. Bureau of Labor Statistics to measure the change in implicit rent, or the amount of rent that could be paid to substitute a currently owned house for an equivalent rental property in a competitive market. This chart shows that assuming the rental stock and owner-occupied housing stock are comparable owners experienced slower cost increases than renters did.
Fed Monetary Policy and Mortgage Rates Federal Funds Rate 30-yr Mortgage Rate 20 18 16 14 12 10 8 6 4 2 0 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Current and Projected Mortgage Rates 30-yr Mortgage Rate 30-yr Mortgage Rate Forecast 5.0% 4.6% 4.5% 4.4% 4.2% 4.0% 4.0% 3.5% 3.0% 2014 2015 2016
Upper Midwestern Values?
How Will This Benefit you? Listing Presentations Open Houses Showings Prospecting Lead Generation/Capture Personal Marketing (You vs. Entire Market) Manage Expectations by Showcasing Market Realities Strategic, Informed Decision Making Forecasting, Extrapolation and Business Planning Identifying Growth Opportunities Segment Specialization Geographical Specialization Risk/Reward Management Foreclosures not a growth market, new construction probably is
Be the expert you wish to see in the market! Stats Answer Popular Questions: Is it a buyer s or seller s market? (MSI) How do property types compare? (TC vs. SF) Are prices going up or down? (MSP) How long will it take to sell my house? (DOM) How much of my asking price will I get? (PCT) When do I have the most options as a buyer? (INV) What s happening with new construction? (NC) What s happening with foreclosures in my area? (F&SS)
Regional Accolades (just 2015) - 1 st most livable city in the U.S. (StP) - 2 nd best state for business conditions (MN) - 1 st lowest unemployment rate of any major metro (TCs 2.9% vs. 5.0% nation) - 2 nd best downtown area in U.S. (Mpls) - 2 nd greenest city in U.S. (TCs) - 3 rd best city for 20-somethings (Mpls) - 1 st most bikable city in U.S. (Mpls) - 2 nd most bikable state in U.S. (MN) - 1 st healthiest city in U.S. (Mpls) - 2 nd highest number of Fortune 500 companies per capita (TCs) - 4 th best city for job seekers (Mpls) - 7 th most recession-recovered city in U.S. (Mpls) - 5 th best state to have a baby (MN) - 1 st best local food scene (TCs) - 2 nd highest number of theater seats per capita (Mpls) - 7 th best state for women s equality (MN) - 1 st most literate city in America (Mpls) - 3 rd best metro area for beer lovers (TCs) - 3 rd most friendly metro area (TCs but #1 nicest) - 8 th best school system school system in U.S. (MN) - 3 rd best domestic airport in U.S. (TCs) - 1 st best metro area on ParkScore Index (TCs) - 2 nd best metro area for recent graduates (TCs) - 5 th best music scene in U.S. (TCs) http://www.minneapolis.org/media/facts-amp-research/accolades
The Global Context Economics - Energy Prices & New Construction - Threat of a Grexit when is the political theater over - Civil war in Syria harm consumer confidence? - Saudis and Iranians diplomatic crisis - US banks limited exposure to Canadian and Chinese mortgage markets - Slowing Chinese growth and non-existent Japanese growth will they try to collect our debt? - We have a lot of Fortune 500 businesses with the majority of their revenue coming from overseas - Gyrations in corporate earnings, slowing emerging market growth, etc. - Stock Market - Strong dollar U.S. consumers pay less for imports, but the world pays more for U.S. exports - Trade deficit widening - Others? Politics - A timely one: Presidential politics matter! - Interest rates? Verdict - U.S. is a shining star in the world economy - Growth may be more subdued than we d like, but another major crash/impending doom is unlikely - Risk of contagion is low for now
What s in store for 2016? 1. Seller activity up 5-7 percent 2. Buyer activity up 7-10 percent 3. For sale inventory up 3-5 percent 4. Home prices up 4-6 percent 5. Housing affordability down 1-2 percent 6. New construction up 8-10 percent 7. Interest rates up to 4.6% by end of 2016 (gradual + incremental) 8. Foreclosures down to 5-7% of Closed Sales 9. Unemployment Twin Cities < 2.3% U.S. < 4.6% 10. Job growth accelerating to 300k+ per mo 11. Wage Growth increasing to ~3-4% per yr (before inflation)
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Corporate Sector vs. Humans