Submitted by Anonymous on Mon, 06/04/2007 - 05:00.
Minnesota housing market facing tough times
Minnesota’s North Shore is feeling the ripple effect of the slowing real estate market in the Twin Cities.
Homes for sale in the metro area are staying on the market much longer; investment properties and other real estate on Minnesota’s North Shore are starting to feel the slow down, too. Some developers have stopped plans to build and other companies that deal with real estate are feeling the squeeze.
Sales agents and developers say the slowdown is the result of the downturn in the Twin Cities market and of North Shore property getting out of reach for many buyers. ‘‘A lot of people that buy here are professionals; we have lots of doctors, attorneys and people with substantial resources, but the average working-class person, they’re not being driven to buy,’’ said Grand Marais sales agent David Parsons. ‘‘It’s very much a discretionary market.’’
Investors like Jerry Loh are taking a hit. He sold property he owned along the Gunflint Trail several years ago and used the profits to buy a condo in Florida and two pieces of land along the North Shore. He was banking on selling the Minnesota land to finance his retirement. But three years later, he hasn’t been able to move them despite dropping the price on one parcel by $110,000 and cutting the other one by $35,000.
‘‘Four years ago you could have sold this no matter what,’’ Loh said of his 11- and 19-acre hillside parcels. ‘‘There’s definitely been a pullback.’’
New construction has really taken a hit. In 2004, Cook County issued 241 building permits. In the first five months of 2007, only 36 permits were issued.
Home resales are down 13 percent in the county and 41 percent on year-round houses from 2004, when a record 115 sales took place in Cook County. In adjacent Lake County, residential sales peaked in 2003 at 261 and dipped to 231 last year — an 11 percent decline.
The boom on the North Shore followed a similar spike in the metro area that allowed homeowners to cash in skyrocketing equity on their primary homes to put toward a summer place up north. ‘‘It wasn’t their money, but they were spending it and now the market has caught up with that,’’ said Tim Melby of Lake Superior Realty.
Source: http://www.ifallsdailyjournal.com/node/3366
Homes for sale in the metro area are staying on the market much longer; investment properties and other real estate on Minnesota’s North Shore are starting to feel the slow down, too. Some developers have stopped plans to build and other companies that deal with real estate are feeling the squeeze.
Sales agents and developers say the slowdown is the result of the downturn in the Twin Cities market and of North Shore property getting out of reach for many buyers. ‘‘A lot of people that buy here are professionals; we have lots of doctors, attorneys and people with substantial resources, but the average working-class person, they’re not being driven to buy,’’ said Grand Marais sales agent David Parsons. ‘‘It’s very much a discretionary market.’’
Investors like Jerry Loh are taking a hit. He sold property he owned along the Gunflint Trail several years ago and used the profits to buy a condo in Florida and two pieces of land along the North Shore. He was banking on selling the Minnesota land to finance his retirement. But three years later, he hasn’t been able to move them despite dropping the price on one parcel by $110,000 and cutting the other one by $35,000.
‘‘Four years ago you could have sold this no matter what,’’ Loh said of his 11- and 19-acre hillside parcels. ‘‘There’s definitely been a pullback.’’
New construction has really taken a hit. In 2004, Cook County issued 241 building permits. In the first five months of 2007, only 36 permits were issued.
Home resales are down 13 percent in the county and 41 percent on year-round houses from 2004, when a record 115 sales took place in Cook County. In adjacent Lake County, residential sales peaked in 2003 at 261 and dipped to 231 last year — an 11 percent decline.
The boom on the North Shore followed a similar spike in the metro area that allowed homeowners to cash in skyrocketing equity on their primary homes to put toward a summer place up north. ‘‘It wasn’t their money, but they were spending it and now the market has caught up with that,’’ said Tim Melby of Lake Superior Realty.
Source: http://www.ifallsdailyjournal.com/node/3366
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