Agenda - Council Work Session - 11/24/2009

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FOR-SALE HOUSING MARKET CONDITIONS TABLE FS-3 MULTIFAMILY HOME RESALES RAMSEY MARKET AREA 2001 to 2009* No. Median Pet. Avg. No. Median Pet. Avg. No. Median Pet. Year Sold Sold Price Change DOM Sold Sold Price Change D01\1 Sold Sold Price Change 2001 43 $143,000 -- 30 705 $128,400 -- 21 748 $129,800 -- 2002 56 $142,450 -0.4% 33 698 $141,000 9.8% 26 754 $141,004 8.6% 2003 59 $163,000 14.4% 41 823 $153,400 8.8% 31 882 $154,000 9.2% 2004 62 $173,750 6.6% 41 776 $163,500 6.6% 35 838 $164,900 7.1% 2005 71 $186,600 7.4% 79 751 $172,000 5.2% 63 822 $173,000 4.9% 2006 67 $179,735 -3.7% 64 635 $174,900 1.7% 64 702 $175,000 1.2% 2007 89 $168,000 -6.5% 92 468 $167,900 -4.0% 75 557 $167,900 -4.1% 2008 108 $135,500 -19.3% 79 438 $144,750 -13.8% 92 546 $142,500 -15.1% 2009* 113 $110,000 -18.8% 77 323 $115,000 -20.6% 71 436 $114,200 -19.9% IChange '00-'09 -$33,000 -30.0% -$13,400 -10.4% -$15,600 -12.0% I · 2009 figures include all resales through the end of August 2009. Sources: Northstar MLS; Maxfield Research Inc. · The length of time from when the home is listed until it sells has increased from an aver- age of30 days in 2001 to 79 days in 2009 (Primary Market Area). In today's market, multifamily homeowners will need at least 75 days to sell their home. · Seniors seeking age-restricted housing will often use proceeds from their home sales to- ward costs associated with senior housing. Since senior homeowners usually own their homes outright, they have access to a sizeable financial resource in the form of equity they can realize from the sales of their homes. A senior living in the PMA who owns their home outright ($110,000 for a multifamily home or $179,000 for a single-family home) will derive $102,300 or $166,470, respectively, after factoring in marketing/real estate commissions and moving costs (estimated at 7%). Should this equity be invested in an interest-bearing account with a 4.0% return, the senior would have ongoingincome of between $340 and $555 per month. · Similar to single-family homes, the affordability of multifamily homes has increased sub- stantially over the past few years, and a greater proportion of resales is occurring in lower price point segments. Between 2005 and 2008, the number of multifamily homes sold under $150,000 increased from about 140 to 320. This price category (less than $150,000) represented nearly 60% of all multifamily resale transactions in 2008 com- pared to only 17% in 2005. MAXFIELD RESEARCH INC.