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Regional Data — continued <br />Economic Trends <br />The current residential interest rates for a typical 30-year mortgage are around 4.5% to 5.5%. <br />Commercial rates are around 4.5% to 6.0%. Rates are expected to be relatively stable for the foreseeable <br />future. <br />The state of the macro economy (national, state, etc.) declined from its peak in 2006, but in 2010 began <br />showing signs of recovery. Many economists are terming 2007 through 2009 as "The Great <br />Recession". <br />New construction labor costs have steadily increased, along with material costs as well. Overall, <br />construction costs are less competitive to what they were 5 to 6 years ago. Generally, when vacancy is <br />over 10%, new commercial/industrial construction is slow. <br />Listing prices have been increasing and are starting to approach the peak of the market in 2006, which <br />was a period of high seller expectations. Recently, buyer and seller expectations and value appear to <br />be trending towards equilibrium. <br />Although well diversified, the TCMA and surrounding Minnesota economy is not immune to the recent <br />soft/declining trends of the overall economy. <br />Index Value (1992=1' O) <br />145.0 <br />140.0 <br />135.0 <br />130.0 <br />125.0 <br />120.0 <br />115.0 <br />110.0 <br />105.0 <br />100.0 <br />95,0 <br />PO <br />Minnesota index and U.S. Index <br />— e, <br />Vr V) VS to as N- to to <br />r r r r r r <br />0 <br />Source: Minnesota DEED <br />Minnesota's index plunged along with the national index during the worst months of the recession but <br />bottomed out earlier and dropped less than the national index. Minnesota's economy recovered more <br />quickly and stronger compared to the national recovery. <br />Nagel) Appraisal Incorporated 1952.544.8966 <br />