Homeownership Rates and the
Sudden Lack of Buyers

Many in the public (and some REALTORS®) believe that the slight upward movement in interest rates has caused the market to suddenly change overnight from a strong Seller market into a strong Buyers market. Like all things in life, is far more complex and difficult to explain. Do interest rates play a role - YES. Is it the primary cause - NO.

Since 1980, Minnesota has seen numerous ups and downs in the real estate market. In the metro area, home sales have tripled - but the population has not. That means more and more households have been able to purchase a home and REALTORS® have had an easier time earning a living. (easier, not easy)

One issue that is often overlooked has to do with saturation - how deeply the market has been penetrated. Please note that Householders aged 20 to 29 years have a higher homeownership rate in 2006 than in 1982. But for those folks aged 30 to 54 years, the homeownership rate has declined. These are national homeownership numbers and Minnesota has even higher homeownership rates.

Minnesota is beginning to show its age. Home sales have been at record levels for the past 5 years, and yet the demographic period is upside down. Below you will find Minnesota population graphs for the entire state and for minorities in the state. The minority pyramid closely resembles America and Minnesota prior to the 1970's. It is apparent when you look at the population counts that births were significantly decreased about 30-34 years ago. In ten years, the Minnesota population dropped by approximately 100,000. The peak years are for persons aged 35-39 years at 412,490. Ten years latter, the population had 25% fewer people, almost a 25 percent reduction.

What does that have to do with today? There has been no substantial positive change in the homeownership rates for people in the 30 to 54 year age bracket, which means we must have been selling deeper into the 20 to 29 year age bracket. Even if you consider that all the rates increased by 2 percent, the fact that we have fewer people available to purchase is a significant contributor to the current buyer shortfall...

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MNAR Seeks Candidates for the 2006 REALTOR of the Year

Do you know a MN REALTOR who should be nominated for MN REALTOR of the Year? The criterion heavily stresses State Association involvement over the last 12 months but also considers involvement at both the Local and National Association levels plus community involvement. Application forms and complete criteria can be found at www.mnrealtor.com. All entries must be submitted on the REALTOR of the Year form and deadline for submissions is September 8, 2006.

MNAR Seeks Committee Members

Have you ever considered serving on a standing MNAR Committee? Now is your opportunity to get involved! MNAR is currently seeking qualified individuals to serve on the following committees: Executive Committee, Finance Committee, Forms Committee, Governmental Affairs Committee, Nominating Committee or Professional Standards Committee. Applications for each committee can be found on our website (www.mnrealtor.com) and all submissions must be received on-line by September 8, 2006