Agenda - Council Work Session - 11/24/2009

Home

FOR-SALE HOUSING MARKET CONDITIONS Introduction Preceding sections examined the demographic and economic factors related to demand for hous- ing products in the Ramsey Market Area. We continue our analysis with a review ofthe current for-sale market conditions and supply of available and planned lots in the Market Area. Informa- tion includes the following: )> Single-family resale statistics (Table ~S-1) )> Single-family home sales distribution (Table FS-2) )> Multifamily resale statistics (Table FS-3) )> Multifamily home sales distribution (Table FS-4) )> Active listings of single-family and multifamily homes (Tables FS-5 & FS-6) )> Review of active affordable subdivisions (FS-7) )> Absorption of affordable multifamily subdivisions (FS-8) For-Sale Housing Market Statistics Maxfield Research gathered data on single-family and multifamily home resales in the Ramsey Market Area from 2001 to 2009 (through the end of August). This information is presented in Tables FS-1 through FS-4 and includes data on annual number of sales, median resale prices, av- erage days on market and price distribution. The data is compiled from the Regional Multiple Listing Service of Minnesota ("MLS") and is intended to provide a snapshot of the strength of the for-sale market overall for residential housing products. Current Market Conditions An overall decline in home values, an increase in the supply of homes available for sale, reduced buyer activity, tightened credit requirements and an increase in affordability all characterize the current housing market. Over the past 24 months, home foreclosures in the Twin Cities Metro Area have risen substantially even as prices have dropped. For those currently facing or who have already gone through foreclosure, it has been difficult. Declining home values and moti- vated developers of new homes has created a modest increase in home-buying activity as house- holds that are stable financially are taking advantage of increased affordability in the market- place. Although this is generally good news for some prospective buyers, the general downturn in the overall economy has reduced the proportion of prospects that are able to take advantage of this situation. Sint!le-Familv Sales Activitv The following points summarize key findings on the for-sale single-family market (Table FS-1 and Table FS-2): . Total sales decreased from a peak of2,872 homes in 2004 to 1,749 in 2008. Total in 2009 are projected to be close to the annual total for the previous year. MAXFIELD RESEARCH INC.