The Skinny

Lessons from the RREAR Pt. V (The Final Edition)

Once again, we pick up here where we left off with the fifth part of our new series: Lessons from the RREAR, where we dig deeper into the data found in our Annual Residential Real Estate Activity Report. This is also the final installment of this series -- at least until next year when we have a whole mess a' 2008 data to play with.

Today's subject, and the final subject of the year: Single-Family Detached Sales.

The Twin Cities have always been a "traditional" kind of place, for lack of a better term. We're one of the least-dense metropolitan areas in the country, with our population spread out more diffusely and widely than most regions relative to our total population.

As a corollary, the majority of our owner-occupied housing units are traditional, single-family detached homes with yards and fences and lawns (2.3 children optional). As you can see, at least 7 out of 10 of every home sold in the Twin Cities over the last 6 years falls into this category.

While this single-family detached majority has steadily shrunk in recent years as the townhouse and condo market boomed (in conjunction with the new construction market, not coincidentally), we appear to have reached our peak (for now), as sales of these types of denser, attached homes retreated slightly in 2007. With foreclosures and short sales taking up a larger market share in 2008 -- and single-family the most prevalent property type in those categories -- expect the upward trend in single-family sales to increase again in 2008.

Below are the Top 20 Areas in Single-Family Detached Market Share -- in other words, the highest share of total closed sales in 2007 that were single-family dwellings. These are the spots where a backyard is a birthright:

MLS Code	Area	% Single-Family
605	Sunfish Lake	100.0%
618	Eastern Dakota County	100.0%
713	Bethel	100.0%
710	Northeast Anoka County	97.3%
716	SP – Hillcrest/Hazel Park/Daytons Bluff	97.1%
305	Mpls – North	97.0%
301	Mpls – Camden	96.9%
721	Lakeland/Afton/Denmark	95.9%
707	Ham Lake	95.8%
368	Hennepin–Northwest	95.5%
628	Southern Dakota County	95.5%
303	Mpls – Longfellow	95.1%
780	Sherburne County	95.0%
361	Crystal	94.6%
304	Mpls – Nokomis	94.4%
742	SP – Central	94.3%
602	South St. Paul	94.1%
748	SP – Town & Country/Merriam Park	94.0%
728	SP – Riverview/Cherokee	93.7%
744	SP – Como	93.5%

And below are the Bottom 20 Areas in Single-Family Detached Share. These are the spots where you and your neighbor are more likely to share a wall than a snowblower:

MLS Code	Area	% Single-Family
302	Mpls – Central	1.5%
741	SP – Downtown/Capital Heights	2.7%
300	Mpls – Calhoun-Isles	35.9%
310	Mpls – University	43.4%
740	SP – Crocus Hill	44.3%
614	Apple Valley	48.3%
608	Inver Grove Heights	48.5%
307	Mpls – Phillips	48.8%
386	Hopkins	50.9%
726	Woodbury	51.2%
612	Burnsville	52.9%
604	Mendota/Lilydale/Mendota Heights	53.0%
640	Shakopee	53.4%
374	Plymouth	54.5%
610	Eagan	54.6%
387	Minnetonka	58.0%
392	Eden Prairie	58.3%
617	Hastings	58.4%
706	North Central Suburban	59.4%
616	Rosemount	61.2%

For a look at the geographic boundaries of these MLS areas, visit here. See you next year for more Lessons from the RREAR.

Lessons from the RREAR Pt. IV

Once again, we pick up here where we left off with the fourth part of our new series: Lessons from the RREAR, where we dig deeper into the data found in our Annual Residential Real Estate Activity Report.

This is the fourth post in the series, so it's kind of like Led Zeppelin IV, only with fewer 9-minute meandering acoustic tracks about hobbits and more analysis of housing market activity. Other than that, they're completely identical.

Today's subject: New Construction Sales.

The new construction market reached its fevered peak in 2006. It was a wet n' wild ride for several years, with every day bringing news of a new housing development springing up from the cores of the two downtowns to the fringe exurbs to the first-ring infills.

But now builders have wisely stepped back. New construction inventory in the MLS has declined by around 25% in the last year, and 2008 should prove to be one of the lowest years on record for new building permits. All this adds up to a rebound in market share for previously owned homes. While the region's population is still growing, the demand for new owner-occupied housing units appears to have been satiated for now, and builders are refocusing on selling their existing inventories.

Below are the Top 20 Areas in New Construction Market Share -- in other words, the highest share of total closed sales in 2007 that were new construction. These are the spots in the Twin Cities where the builders are still active (or were last year):

MLS Code	Area	% New Construction
398	Victoria	53.8%
302	Mpls – Central	45.0%
307	Mpls – Phillips	39.0%
705	Lino Lakes/Hugo/Centerville	34.8%
741	SP – Downtown/Capital Heights	34.5%
310	Mpls – University	31.6%
341	Wright County (except Buffalo)	31.5%
756	Elk River	30.3%
760	Ramsey	28.3%
646	Jordan	28.2%
630	Northfield	26.8%
367	Hennepin–North	25.1%
726	Woodbury	24.4%
648	New Prague	24.2%
379	Bloomington–East	24.1%
394	Carver County	23.4%
616	Rosemount	23.0%
650	Belle Plaine	22.7%
368	Hennepin–Northwest	22.3%
764	Blaine	20.8%

Below are the Bottom 20 Areas in New Construction Market Share. These are the areas where stability reigns:

MLS Code	Area	% New Construction
363	Brooklyn Center	0.0%
605	Sunfish Lake	0.0%
618	Eastern Dakota County	0.0%
768	Fridley	0.0%
771	Spring Lake Park	0.0%
772	Lexington/Circle Pines	0.0%
744	SP – Como	0.4%
303	Mpls – Longfellow	0.9%
378	Richfield	1.0%
728	SP – Riverview/Cherokee	1.1%
750	SP – Mac/Groveland/River Road Area	1.1%
380	Bloomington–West	1.2%
373	Golden Valley	1.2%
301	Mpls – Camden	1.9%
361	Crystal	1.9%
748	SP – Town & Country/Merriam Park	2.0%
769	Anoka	2.2%
742	SP – Central	2.2%
765	Arden Hills/Shoreview	2.3%
309	Mpls – Southwest	2.4%

For a look at the geographic boundaries of these MLS areas, visit here. And stay tuned in the weeks ahead for more Lessons from the RREAR.

Lessons from the RREAR Pt. III

We pick up here where we left off, with the third part of our new series: Lessons from the RREAR, where we dig deeper into the data found in our Annual Residential Real Estate Activity Report.

Today's subject: Percent of Original List Price Received at Sale.

The higher the Percent of Original List Price Received at Sale, the more sellers are effectively asserting control in the negotiation process.

With the Twin Cities and national housing markets firmly in the midst of buyer's markets, there's been a significant downward pull on prices. Inventory was at record high levels throughout 2007 (though flattening lately) and home sales slid further down.

So naturally, motivated builders and home sellers offered larger discounts from their original asking prices last year to compete with one another for a relatively smaller pool of buyers. There was additional downward price pressure from the increasing market share of foreclosures and short sales.

Below are the Top 20 Areas in Percent of Original List Price Received at Sale for closed sales in 2007. This is where buyers, builders and banks were receiving the closest to their original asking prices in the metro:

Code	Area	% of Orig. List Price Rec'd
604	Mendota/Lilydale/Mendota Heights	97.7%
342	Hutchinson	96.8%
302	Mpls – Central	96.6%
628	Southern Dakota County	96.5%
300	Mpls – Calhoun-Isles	96.3%
396	Chanhassen	96.2%
366	Champlin	96.1%
769	Anoka	95.9%
362	New Hope	95.8%
640	Shakopee	95.8%
744	SP – Como	95.7%
379	Bloomington-East	95.7%
644	Savage	95.7%
767	Coon Rapids	95.7%
752	SP – Highland Area	95.7%
705	Lino Lakes/Hugo/Centerville	95.6%
764	Blaine	95.6%
740	SP – Crocus Hill	95.6%
746	SP – St. Anthony/Midway	95.5%
771	Spring Lake Park	95.5%

And here are the Bottom 20 Areas. These are the parts of the metro where buyers chose to accept lower final sales prices relative to where they started:

Code	Area	% of Orig. List Price Rec'd
605	Sunfish Lake	81.0%
305	Mpls – North	84.9%
301	Mpls – Camden	89.0%
742	SP – Central	89.5%
714	SP – Phalen	90.4%
720	SP – Southeast St. Paul	91.8%
721	Lakeland/Afton/Denmark	92.1%
398	Victoria	92.5%
716	SP – Hillcrest/Hazel Park/Daytons Bluff	92.6%
784	Northern Chisago County	92.9%
381	Lake Minnetonka	92.9%
368	Hennepin-Northwest	93.2%
738	SP – Home Croft/W 7Th	93.3%
727	Stillwater/Bayport	93.3%
632	Rice County	93.4%
660	Goodhue County	93.4%
648	New Prague	93.5%
600	West St. Paul	93.5%
646	Jordan	93.6%
770	Hilltop/Columbia Heights	93.6%

For a look at the geographic boundaries of these MLS areas, visit here. And stay tuned in the weeks ahead for more Lessons from the RREAR.

Lessons from the RREAR Pt. II

We pick up here where we left off, with the second part of our new series: Lessons from the RREAR, where we dig deeper into the data found in our Annual Residential Real Estate Activity Report.

Today's subject: Square Footage.

Despite a consistent decline in the number of residents per household each year thanks to an aging population and relatively lower birth rates, the average square footage of Twin Cities homes continued its inexorable rise upwards in 2007. As newer, larger homes are added to the pipeline and existing homes are refurbished and expanded over time, the overall size of our homes gradually increases, seemingly into infinity.

This is either fantastic or horrible news, depending on whether or not you're generally in favor of second amusement rooms in the basement for antique billiard tables and pinball machines.

Entirely-too-subtle jabs at suburban consumerism aside, what this all means is that every year we seem to have more square footage per person than ever before. So relax and truly enjoy that extra beanbag chair or Barcalounger with no shame.

Below are the Top 20 areas in the Twin Cities for Average Finished Square Footage for closed sales in 2007. This is where you can really sterch out into that 7th bedroom. Not coincidentally, some of these are also the higher-priced communities in the region:

Code	Area	Avg. Sq. Footage
605	Sunfish Lake	5,120
368	Hennepin-Northwest	2,929
398	Victoria	2,927
381	Lake Minnetonka	2,733
604	Mendota/Lilydale/Mendota Heights	2,595
392	Eden Prairie	2,569
396	Chanhassen	2,541
707	Ham Lake	2,519
642	Prior Lake	2,413
385	Edina	2,389
626	Lakeville	2,318
367	Hennepin-North	2,317
762	Andover	2,301
727	Stillwater/Bayport	2,288
365	Maple Grove/Osseo	2,283
644	Savage	2,244
374	Plymouth	2,234
726	Woodbury	2,216
721	Lakeland/Afton/Denmark	2,206
706	North Central Suburban	2,198

And here are the Bottom 20 areas. Not surprisingly, you'll notice regions here that either a) have a high preponderance of condominiums and/or b) have a relatively older housing stock and/or c) are located in the two center cities or first-ring suburbs.

Code	Area	Avg. Sq. Footage
741	SP – Downtown/Capital Heights	1,089
302	Mpls – Central	1,307
308	Mpls – Powderhorn	1,310
742	SP – Central	1,322
310	Mpls – University	1,333
307	Mpls – Phillips	1,347
301	Mpls – Camden	1,351
303	Mpls – Longfellow	1,360
738	SP – Home Croft/W 7Th	1,377
306	Mpls – Northeast	1,386
746	SP – St. Anthony/Midway	1,421
716	SP – Hillcrest/Hazel Park/Daytons Bluff	1,430
728	SP – Riverview/Cherokee	1,442
386	Hopkins	1,457
379	Bloomington-East	1,462
305	Mpls – North	1,469
714	SP – Phalen	1,504
304	Mpls – Nokomis	1,514
600	West St. Paul	1,516

For a look at the geographic boundaries of these MLS areas, visit here. And stay tuned in the weeks ahead for more Lessons from the RREAR.

Lessons from the RREAR Pt. I

If you're at all a fan of our Annual Residential Real Estate Activity Report (aka "The RREAR") that's released in February of each year, then you're likely a fan of the detailed, micro-level, neighborhood-based data it provides. Square footage, days on market, sales prices, percent new construcion vs. previously-owned...the list goes on and on -- and it's provided for every MLS area we can possibly fit in the damn thing.

All of this is to say that the amount of information contained in the 16 page report each year is both a) highly useful and b) difficult to sift through in its entirety without losing your mind. Constrained by the boundaries of the PDF format we're forced to simply dump all the data out to you in a grid of colums and rows, with no regard given to ordering the data or highlighting some trends to note.

We're gonna try to rectify this problem by harnessing the power and magic of the blog to dig into the numbers a little further. So let this mark the official beginning of the first post in an ongoing series: Lessons from The RREAR.

Today's subject: Price Per Square Foot.

While an imperfect science, Price Per Square Foot (PPSF) is in essence an attempt to control for the sometimes volatile data variable of home size and equate the value of the home to a simple financial question: how much house do I get for my money? PPSF varies significantly from house to house and is affected by a variety of factors—location, the type and age of the home, structural and cosmetic condition and much more.

Statistically, the Average PPSF by community in the Twin Cities varies greatly from place to place and is affected by all the same factors above, just on a broader geographic scale than a single home.

Below are the Top 20 Areas in the Twin Cities for Average Price Per Square Foot in 2007:

District	Area	PPSF
302	Mpls – Central	$244
605	Sunfish Lake	$237
300	Mpls – Calhoun-Isles	$230
381	Lake Minnetonka	$217
310	Mpls – University	$206
740	SP – Crocus Hill	$205
741	SP – Downtown/Capital Heights	$202
309	Mpls – Southwest	$200
750	SP – Mac/Groveland/River Road Area	$192
385	Edina	$191
752	SP – Highland Area	$182
748	SP – Town & Country/Merriam Park	$175
303	Mpls – Longfellow	$169
604	Mendota/Lilydale/Mendota Heights	$166
368	Hennepin-Northwest	$166
391	Saint Louis Park	$164
618	Eastern Dakota County	$163
721	Lakeland/Afton/Denmark	$163
304	Mpls – Nokomis	$162

And here are the Bottom 20 Areas in Price Per Square Foot in the Twin Cities. These are the spots you could get the most house for your money in 2007:

District	Area	PPSF
305	Mpls – North	$71
370	Sibley County	$90
343	Mcleod County	$92
342	Hutchinson	$97
301	Mpls – Camden	$99
742	SP – Central	$100
660	Goodhue County	$103
714	SP – Phalen	$106
658	Le Sueur County	$107
363	Brooklyn Center	$111
716	SP – Hillcrest/Hazel Park/Daytons Bluff	$114
720	SP – Southeast St. Paul	$116
783	Cambridge	$118
632	Rice County	$119
364	Brooklyn Park	$119
756	Elk River	$120
767	Coon Rapids	$121
769	Anoka	$121
630	Northfield	$121
612	Burnsville	$121

For a look at the geographic boundaries of these MLS areas, visit here. And stay tuned in the weeks ahead for more Lessons from the RREAR.