Lakeshore Update - MN Lakeshore Property

LARSONEWS

by Bruce Larson & Rob Birkeland

Home Prices Continue to Decline & the 2010 Market Review

We ended 2010 with both buyer activity and sales made at increased levels; however, the changes were not to the necessary levels needed to significantly reduce the expanded inventory of properties in the market.  Along with this disappointment the economy continues to challenge a recovery in our area.  Buyer confidence remains low and at this time we can't say for certain that we feel we have reached the bottom on the market.

To briefly recap what's happened in our area for you, the first evidence of declining values were realized in 2006 and prices continued to drop each year thereafter from 2007 through 2009 as you will see in the chart below.  Unfortunately, during the same time we also saw the number of sales being made decline and market inventory continued to increase.  We finally experienced some good news in 2010.  Buyers began taking advantage of the discounted pricing, sales were made and inventories were reduced.  It was the first increase in the number of annual sales made since 2005.  Going forward there will be significant inventory in the market again this spring with levels comparable to the past several years. Prices today are down 38% since they began declining in 2006.  We anticipate an active year ahead and are hopeful the market will finally stabilize.  There are so many variables that remain undefined on a national level that we hedge our optimism with caution.

In reviewing these statistics there are influences that should be noted.  The great majority of the increased sales were in the mid-market ranges and theefore the average sales price was held up by these sales.  The percent of list price to sale price received fell into the low to mid 80% range and was indicative of the influence of "Short Sales", lender "REO" sales and highly motivated sellers who wanted to capture a sale.  All of these types of properties had been for sale for some time and needed to sell.

The market has now been purged of the buyers who purchased to make a quick buck.  They are all gone.  The foreclosure rate in our area declined 2% in 2010 and we hope to see that trend continue to drop as we go forward.  At the same time there are also less Realtors active in the market.  True professionals have survived.  Larson Group is a mainstay in the Lakes Area and we actually grew in 2010.  We are proud to report that our gross sales were up 23% from 2009 and we were involved in 38% of all sales made on the Whitefish Chain.

We appreciate your confidence in making us the Lakes Area's #1 Real Estate Team!  Now is a phenomenal time to purchase.  If we can assist you, a family member or friend with a real estate need...Let's Talk.  We look forward to putting our knowledge to work for you.                                                                                                              ~  Bruce Larson & Rob Birkeland

"In the middle of difficulty lies opportunity"

This quote from Albert Einstein could not be truer today as it relates to buyers looking to purchase real estate in our area.

There are several propelling reasons why we feel buyers should be aggressively pursuing this point in history as a great time to purchase.  The amount of lakeshore properties currently active in the market is at a historically high level while interest rates continue to remain at historically low levels.  In this way, the current real estate market doesn't compare to the double digit interest rates that existed during the prior real estate adjustment we experienced in the 80's.  We do believe rates will rise; it's just hard to predict when.  The quality of the current inventory is exceptional.  Buyers have a very real opportunity to purchase a superior property at prices not seen in this area for years.  While there could be additional decreases in property values there is at the same time a good chance that interest rates will rise.  It could prove better over tghe long run to have a lower fixed interest rate at today's value rather than a lower purchase price with a higher interest rate over the course of the mortgage.

We are in a buyer's market and we expect that will continue through 2011.  One strong fact remains clear through this uncertain real estate market...we are in the most desired lakeshore area of Minnesota, some believe the Upper Midwest.  It's a great place to live and vacation and there is only a defined amount of lakeshore.  We truly believe that now is the time to take advantage of the opportunities the market presents.  Please contact us if you or someone you know is thinking of making a purchase....Let's Talk.

Dock & Platform Update

Last fall as Governor Pawlenty left office he did not approve the new shoreline regulations.  He stated, as it referred to docks, that one size does not fit all and the proposed language submitted by the DNR was not acceptable.  Going forward we now have a new Governor and a very tight budget.  It remains to be seen if the funding will be available to draft a new law and the subsequent enforcement...

Here we "Grow" again!

As you can see from our pictures on the website, we've added a new Buyer Specialist to the team and we would encourage you to stop in and meet Matt Stephens when you're in town.  He shares a familiar story with many of us as he grew up spending summers with his family in the Lakes Area before moving here permanently.  Matt is originally from Lincoln, Nebraska and has family on Pelican Lake.  Matt and his wife, Heather live in Breezy Point and they are involved in many school and area activities with their two your children.  We feel Matt is a good match for our team and we're sure you'll enjoy getting to know him.