If you’re exhausted with media hurtling dire
economic forecasts with a political agenda, you want to know What Ted Said.
If you don’t know who Ted Jones is, you might want to listen up. He is the chief economist for Stewart Title, internationally known as an applied real estate research expert, and gives 150 talks a year to major real estate organizations. There is a long, rich, resume in the fine print.
He was in town for two presentations, I attended on Tuesday, 11/19.
All of us are plagued with pundits whose
opinions have an agenda to keep us on edge for political gain. What Ted Said
quells the false storm. Key indicators are jobs and cheap energy. We have both.
So, what did Ted say?
THERE ARE NO INDICATORS OF RECESSION. Recession is defined as 2 + quarters of negative growth. It isn’t happening, nor does it seem to be looming over 2020.
Retail sales are 68% of the GDP, and it’s up 4.5% YoY September 2018-2019. That’s the highest rate that they have ever been. Old Navy announced plans to open 800 new stores in 2020. Online sales jump 36% when linked to brick and mortar, storefronts aren’t going away. Unemployment is at the lowest point in 50 years, 3.5%. In Minnesota, it is 2.4%. Wages increased by 1.8% in the last 12 months, the highest in 10 years. Hospitality and Leisure jobs surged +2.4% year over year to meet demand. Leisure spending shows consumer confidence.
Real estate gained 6% in sales YoY. There were 521,000 sales in October 2018 and 552,000 as of October 2019. That’s a +6% gain. Average home prices also increased to $272,000 a +6% gain. Interest rates are forecasted to slide into the 3-4% range. There will be 1.5 million new households in 2020, adding more pressure to find affordable housing. Boomers and Millenials are looking for the same thing, smaller, low maintenance, and affordable homes. McMansions are a thing of the past.
The i Buyer slice of sales is about 1%. I buyers are not new, “We Buy Ugly Houses,” Hedge funds like Blackstone (bought 1200 homes in MN during the recession), and investors have been around for a very long time. What’s different is the institutional buyer on a bigger scale. Even if Zillow reaches its goal of buying 5000 homes a month, it’s still only 1% of the market. It boils down to how much people are willing to pay for convenience. So far, the cost vs. benefit isn’t wildly appealing for most homeowners.
Minnesota economy is strong, with a few weak spots. Out of the 52 states, MN is ranked #45 in tax friendliness. Texas does way better, they have a 3% real estate tax, that’s it. The Texas Constitution doesn’t allow spending more than it takes in. Isn’t that an exciting thought? MN lost 14,000 jobs, and we have a 17% spike in mortgage delinquency. Farmers are being squeezed, but the tech and medical sectors are very growing.
Politics and economics are two separate entities, but politicians use the economy to scare you, threaten you, or even bribe you. Follow independent thinkers who offer information without a bone to pick. Ted Jones isn’t the only economist with a perspective, but one you might pick up a nugget or two. Check out the blog:http://blog.stewart.com, or his twitter account drtcj.
Give me a jingle if you’re thinking of making a move, or if you have friends or family that might need some help. Ph: 612 384 1360 Email: firstname.lastname@example.org
Every morning I wake up with my head exploding with brilliant Instagram images on rehabbing houses. It’s not an easy work, it takes a village. There are project plans, the decor has to be gorgeous, crew lined up, and buyers vetted. Hair and wardrobe make or break the image. What should I wear swinging a sledgehammer or showing a dingy basement? The look has to be professional and glamorous, yet with homey relatable images.
At 10 AM I meet the new couple at my office. They’ve been vetted by the casting team, contracts are signed, budget is set, and they’ve already bought one of the three houses we’ll show. They are so excited!!! We go over the script, and plan the day’s shooting. I’m ready, cameras on, let’s roll.
In the opening shot we’re doing introductions and I’m asking them everything about what they’re looking for, what would be their dream home? She goes on with the litany of, “I want, I want, I want, I want…” Listening attentively I nod my head, “You want four bedrooms, a gorgeous master spa bath, custom kitchen with a mile and a half of granite countertops, an outdoor entertainment center for under $200,000? Is that all?” Of course she does, I smile cheerfully. Let’s go see some houses!
The first house is a tiny bungalow with deferred maintenance for $120,000 begging for an $80K remodel to make it livable. Let’s call it The Witch is Dead Gingerbread house. Next, a spacious two story in need of coming out of the 1900s built on a hill with 300 steps. We’ll call that one Goat Hill. The third house is a brick 1.5 story with an unfinished 1/2 story and basement. Lots of naked space. It’s within the budget, they like the neighborhood, not far from schools and a hop to work. This one is Head Start. No brainer right? No wait, they want to think about it? I whip out my iPad showing 3D floor plans where we are moving walls, opening up the back with sliding glass doors, building a patio with beautiful grape vines, acres of granite in the kitchen and adding a couch with nautically themed pillows. They love it, let’s write an offer. Whew, we won the bidding, had to go over list price which means we cut back on the pillows.
The next morning we huddle over the iPad blueprints. We make color selections, cabinets, and finalize the design in 20 minutes. I’m wearing overalls and a hardhat prepared for demo. Most Realtors don’t do demo. I don’t either but my producer says that buyers want engagement and love to see Realtors in action. We already closed on the house, so we can head over for an early start. The crew is coffeed up, they’ve started without us. The buyers are excited, they get to knock out a wall. I grab a sledgehammer, give it a swing, and OMG it hit a water line. There is water all over the place! The buyers are watching bug-eyed with their mouths gaping. The producer yells, “Somebody get a plumber!” I’m soaking wet, my hair is dripping down my face, my right shoulder is screaming at me, and I’m not video ready. Can we cut PLEASE? Things happen. We joke that this kind of thing can happen to anyone. God, I hope that they don’t sue.
While I went to the emergency room our videographer got some good footage of the buyers ripping out cabinets and taking out a demi wall. Only one ugly surprise, flattened dead squirrel was found under the fridge (apparently he was hiding, but couldn’t escape.)
I met again with the buyers with my arm in a sling for a photo op just to show that this is not a job for wimps, I’ve got grit, and it’s an Instagram moment. We’re all together at base camp smiling. The crew takes over sheet rocking, wiring, plumbing. I’m taking a couple weeks away to work on my Instagram for my online store, Fantasy Fixes, everything you need for a rehab for pennies on the dollar. Only a phone call away.
The phone rings Saturday night. Mrs. Buyer just walked through a Restoration Hardware, she wants to change the theme as she fell in love with a $5K couch. I pour myself a vodka, straight. She’s crying, she insists that the couch will change her life. I’m crying, she is ruining mine. Thinking of 14 ways to asphyxiate her with the nautical pillows or get her to change her mind I purr into the phone, “Don’t worry, you sound so stressed. Why don’t you take a hot bath (scalding), relax, and we’ll meet at the house in the morning to work it out.”
The next morning we met at the house, which is nearly finished. Mrs. Buyer is excitedly placing the $5K couch along a load bearing wall of her mind. We measure, measure again. The couch is ginormous, but the house is not. It would take up over half of the living room, it won’t even fit in through the front door. The husband stands quietly glassy-eyed, he knows when he can’t win. “Well, what is it that you love about THAT couch?” She loves the creamy linen and the charcoal piping. We picked out a deep blue velveteen. “What if, just what if we have a cream linen slipcover with charcoal piping made for the couch that looks like the RH couch, but can fit in this room? That way, you get both a summer and a winter look, and stay on budget?” She stopped, rolled her eyes left, then right, sighed, looked at her husband, and back at me with a huge grin, “Alright!” We all breathed deeply in unison.
After that, things moved along uneventfully. The buyers weren’t allowed anywhere near, but I think that they sneaked around at night. Finally, the day for the big reveal. The slipcover for the couch is done, the kitchen glows with sunlight, we even came in $25 under budget. It’s a win for all sides. My producer blindfolded the buyers, I’m their guide dog and lead them down the path. Cameras are rolling, “ARE YOU READY?”
Of course, they are ready. Smile, and call it a day.
Whether you’re selling a house or buying a new home in the Minneapolis, MN, area, turn to Mary Jo Quay with RE/MAX Results for quality real estate assistance. Contact her at (612) 384-1360 or visit the website to learn more about her services or browse local real estate listings.