Thursday, January 31, 2008

Winter on Minneapolis Lake Calhoun

A Weeping Willow hovering on the edge of frozen Lake Calhoun.

Wednesday, January 30, 2008

Twin Cities Rentals One Step Closer to Lead Free


WASHINGTON – The U.S. Department of Housing and Urban Development, the U.S. Environmental Protection Agency, and the U.S. Attorney’s Office for the District of Minnesota today announced a legal settlement with nine Minneapolis-St. Paul area property owners and one property management company. The government alleges these landlords failed to inform tenants that their homes might contain potentially dangerous levels of lead in violation of the federal disclosure rules.

This settlement will result in the complete elimination of all lead-based paint hazards in 179 apartments in the Minneapolis and St. Paul region, with those units containing children six years of age or under or pregnant women being completed first. Two properties, containing 113 units, tested under this settlement were found to be free of any lead-based paint (see attached list).

In addition to paying substantial funds to make these rental units lead-safe, the landlords will pay a civil fine of $7,500 for violating the federal disclosure law and will spend another $50,000 working on a Child Health Improvement Project (CHIP) to replace windows in at least 35 low- and very-low income, owner-occupied homes with children under age six in the Thomasdale, Rice Street, and Lower East Side of St. Paul. The landlords will also notify tenants of lead hazards immediately and comply with the Lead Disclosure Rule in the future.

“This agreement is another important step toward eliminating childhood lead poisoning by reminding all landlords that they have a responsibility to disclose possible lead hazards to their tenants,” said HUD Deputy Secretary Roy A. Bernardi. “Working closely with the U.S. Attorney’s Office in Minneapolis and our partners at the EPA, HUD can be a force to end this completely preventable disease.”

“EPA has the ambitious goal of eliminating childhood lead poisoning by 2010,” said EPA Region 5 Administrator Mary A. Gade. “Today’s agreement brings that goal closer to reality for the children of Minnesota.”

The settlement announced today is the seventh such agreement in Minnesota that requires landlords to eliminate all lead-based paint or lead-based paint hazards in their rental units. As a result of these agreements, more than 5,000 rental units in Minneapolis and St. Paul, including some units in Wisconsin, South Dakota, and Indiana, will be made lead-safe for tenants. Moreover, the landlords involved in these seven settlements will have spent nearly $4 million to make their rental units lead-safe, paid civil fines of $44,500 and provided $220,000 for local CHIP projects, including funding a mobile lead poisoning screening vehicle called the “Leadie Eddie Van.” The “Leadie Eddie Van” is now fully equipped and being used to screen children for lead poisoning throughout Minnesota.

Read the full article...

Tuesday, January 29, 2008

Yeah, I have Real Estate Niches, but...

...that doesn't mean I snub my nose as anyone else looking to buy something other than a high end home or a historic home. I have niches so I can know extreme information about those areas or types of home, but it doesn't mean I am not knowledgeable about the rest of the Minneapolis market.

I have had a few people ask me if I can handle them. When I ask them what they mean, I often hear that they are first time home buyers, new to the area, or in a lower price bracket. My reply is always "most definitely". I have worked with numerous buyers and sellers, and when I lived in Florida, my specialty was military buyers. That experience gave me in depth knowledge of VA loans. Here in Minnesota, there are not too many servicemen looking to take advantage of their Veteran benefits. So I have had to change my way of doing business.

Now I have niches. Many real estate agents don't take the time to develop market knowledge on specific niches. Instead, they are "all things to all people". I find that very difficult because there is no way an agent in the Twin Cities can know it all. For instance, I don't sell anything north of the Twin Cities, like in Anoka County. If someone came to me from that area, I would refer them to a more local agent. It's not fair to the client to take on something you know nothing about. But many agents refuse to let go of the business because they are desperate for business, and the person hurt by that is the seller or buyer.

So if you wonder if I can handle your special circumstances, please don't worry. While I specialize in historic homes and luxury properties, I work all price brackets because what matters most to me is helping the client.

The home pictured above is my listing in St. Paul. It is priced at $124,900 and is a beautiful home. If you would like to view it online, please visit

Monday, January 28, 2008

Minneapolis Architecture

If you would like to catch a glimpse of architectural style in downtown Minneapolis, below is a great video produced by filmmaker Evan Orensten and narrated by University of Minnesota College of Design Professor John Comazzi. It will give you a great understanding of the outstanding design work that has penetrated Minneapolis over the last ten years.

Sunday, January 27, 2008

Minnehaha Falls in Winter

Minnehaha Falls In Winter

Minnehaha Falls is a beautiful area to visit anytime of the year in Minneapolis. This weekend I went to the park to get some snapshots of the frozen waterfall. Yes, those are people walking at the bottom of the falls. At 53 feet, it is quite a sight to see in summer and in the winter.


Minnehaha Creek flows 22 miles from Lake Minnetonka through Minneapolis before ending its journey at the Mississippi River. The word, Minnehaha, comes from the Dakota language and literally means, "curling water", or "waterfall". Minnehaha Falls is located not too far from where the creek meets the Mississippi. History has it that the falls were named "Brown's Falls" in the early 1800's after United States Army Commander Jacob Brown, while the Dakota called Minnehaha Creek, "Wakpa Cistinna", meaning "Little River".

Minnehaha Falls is quite famous. It is the site location for Henry Wadsworth Longfellow's poem, "The Song of Hiawatha", published in 1855.

As far as the geology of the site, the site of Minnehaha Falls is linked to Saint Anthony Falls, which is several miles upriver on the Mississippi. Around 10,000 years ago, St. Anthony Falls was located near the site where Minnehaha Creek entered the river. As erosion brought the falls upriver, it passed Minnehaha Creek, causing a new waterfall to form. The story actually becomes even more complex because the Mississippi eventually abandoned the portion of St. Anthony Falls that was then nearest to Minnehaha. The lower portion of Minnehaha Creek now flows through a wide and deep channel once belonging to the larger river. The end of Minnehaha Creek where it joins the Mississippi River is the lowest surface point in the city of Minneapolis at 686 ft above sea level. Below is a photo of the river valley gorge.

Photos of the falls have been taken over the years, 1860, 1865. Below is a slide show of the other photos I took of the frozen falls.

Wednesday, January 23, 2008

Minneapolis Needs to Get Over Itself

It's true. Whenever anyone thinks of the Twin Cities, they immediately think of Minneapolis. I grew up in Indiana and never really knew what Saint Paul was about until I moved here. All I ever heard about was Minneapolis, Minneapolis, Minneapolis.

Since moving to Minnesota, Saint Paul has a special place in my heart. It is a bustling big city, with a small town feel, and any city that can hold on to its "roots" is truly a Midwestern gem. Minneapolis on the other hand is trying to be something that it may never become, another Chicago, and in the process, I wonder if it will lose itself.

Take for instance, Indianapolis, a city I grew up near. Over my lifetime, I have watched the city go from a poor struggling town trying to prove itself in the nation as a city worthy of visitors, to a wonderful hip metropolis that, in my opinion, ranks up with some of the best for available amenities. The best thing I like is that it still has the "home town" feel that welcomes me home every time I visit. I would rather go to Indy than Los Angeles anytime of day.

So when I picked up the MPLS-ST Paul Magazine that arrived at my door today, I was a little angered by a Letter to the Editor regarding the design of the I-35W bridge. The writer pretty much says that by Larry Millett commenting how the bridge should not be used as a memorial, that he is showing "small town thinking and is why Saint Paul will forever be the smaller of our Twin Cities". He also goes on to say that Minneapolis should take advantage of the bridge collapse by building a memorial to the victims and designing something that will "make an architectural statement worthy of world recognition".

First of all, don't get me started on his comment that it still isn't "too expensive" to get a better design. But his comment about Saint Paul just wasn't warranted. Just because people are of the opinion that we don't need to make this new bridge into a memorial, there is no need to attack them and call them "small town". I for one agree with Larry Millet...this is not the time or place for a bridge memorial. If you want to put a plaque at the end of each bridge, be my guest, but don't "design" the bridge, using tax payers dollars, as a grand memorial. Trying to get world recognition off the deaths of a few people is just vain, and Minneapolis should know better.

Some people in Minneapolis, really need to get over themselves. Just because you are the bigger city, doesn't really mean you are the better one. When I think of the area, I really think of the cities as one. Each has something the other doesn't. Maybe I see it this way because I have a fresh perspective on the Twin Cites, and haven't been corrupted to one or the other since I am not a native. Of course, when you are a real estate agent, you can't really cheer for either one. But when I hear comments from citizens like I describe, it makes me want to jump ship and go over the river to the other side.

Tuesday, January 22, 2008

How the Mortgage Debt Cancellation Relief Act Could Help You

After much anticipation and a full year of home owners facing foreclosure sweating it out, H.R. 3648 - Public Law 110-142 was finally signed into law December 20, 2007.

One of the pitfalls of a short sale or foreclosure is that any debt amount forgiven or discharged by the lender is recognized as taxable income by the IRS, and then taxed at ordinary income rates for the home owner, even though no actual cash changes hands. The taxation of "fake" money was just another kick in the pants to homeowners who just lost their home to foreclosure, only to find a huge tax bill in the mail that most could not afford to pay. The Act was given a boost of support with the number of foreclosures and the mortgage/financial crisis, not to mention the decreasing home values happening across the country.

So now, with the passage of the H.R. 3648, individuals who are relieved of their obligation to pay some portion of a mortgage debt on a principal residence between January 1, 2007 and December 31, 2009 will not be required to pay income tax on any amount that is forgiven.

Here are some details that might apply to you:
  • No Income Limitation: All borrowers receive the relief, no matter what their income.
  • Dollar Limitation: No more than $2 million of mortgage debt is eligible for the exclusion ($1 million of debt for a married filing separately return).
  • Relief applies only to an individuals principal residence and the forgiven mortgage debt must have been secured by that residence.
  • No relief is available for cash-outs, whether the cash-out takes the form of a refinanced first mortgage, a second mortgage, home equity line of credit or similar arrangement.
  • Eligible debt is what is called "acquisition indebtedness." This is debt used to acquire, construct or rehabilitate a residence.
    1) Refinanced debt qualifies, so long as the debt does not exceed the original amount of the debt. (Same rule as Mortgage Interest Deduction)
    2) Home equity debt (or second mortgages) qualifies if the funds were used to improve the home. (Borrower must have adequate records, as under current law.)
    3) See cash-outs, above. No amount of a cash-out may be treated as acquisition debt.

Here are a few points of clarification as supplied by the Minnesota Association of Realtors:

  • Refinanced Mortgages: The relief does apply to refinanced debt in some circumstances. The rules seek to assure that any debt eligible for the relief is directly related to the acquisition or improvement (such as rehabilitation, expansion, renovation, reconstruction) of the principal residence. Debt used for furnishings (i.e., any movable property) in the home is not eligible for the relief. When the proceeds of any refinanced debt is used for any purpose other than acquisition or improvement, those proceeds are not eligible for the relief.
  • Principal Residence: A principal residence is defined in the same manner as the rules that apply to the capital gains exclusion on the sale of a principal residence. An individual may not have more than one principal residence at any given time.
  • Second Homes: As a general matter, the relief does not apply to any debt forgiveness on any mortgage for any second home of the taxpayer. However, if a taxpayer uses a residence (other than his principal residence) solely as an income-producing rental property, already-existing relief provisions might apply, depending on the taxpayer's situation. if the second home property was acquired as a speculative investment (such as for resale rather than rental), relief provisions are unlikely to be available. In all events an individual who is in a short sale, foreclosure, workout or similar situation on a residence (including condos) other than his principal residence should consult a tax adviser to determine what, if any, relief provisions might be available.

Some other points of interest that are tacked on to the Mortgage Debt Cancellation Relief Act are the following:

Mortgage Insurance Premiums: The deduction for mortgage insurance premiums is extended through tax year 2010. Income limitations on the deduction will continue to apply.

Surviving Spouses/$500,000 Exclusion: In some circumstances, a surviving spouse is denied eligibility for the full $500,000 exclusion on the sale of his/her principal residence. This most frequently occurs when the residence is not held in joint ownership at the time the spouse who is not on the title dies. In that case, the deceased spouse had no ownership interest, so there is no basis step-up on that half of the property. the surviving spouse is thus eligible only for an exclusion of $250,000. (Had the home been sold during the deceased spouse's lifetime, the full $500,000 exclusion would have applied, so long as they filed a joint return.) Challenges for the surviving spouse are compounded when this circumstance occurs late in the year. The surviving spouse is often unable to sell the property within the same year that the spouse died. This legislation provides that a surviving spouse may claim the full $500,000 exclusion not only in the year of the deceased spouse's death, but also during the two years after the spouse's death.

Second Homes Converted to Principal Residence: The original House-passed version of this legislation included a provision that would have limited the application of the $250,000/$500,000 exclusion when a second home is converted to a principal residence and later sold. Thankfully, this change was not included in the final legislation that the President signed, as it would have hurt those that own second homes with huge capital gain taxes.

Monday, January 21, 2008

Minneapolis Market Update - 2007

Days on the Market Statistics for the Year 2007

2007 saw an increase in the amount of time homes stayed on the market before selling. Some areas of Minneapolis take longer to sell than others. Downtown, for instance, is filled with condominiums that aren't selling so the recorded Days on the Market are higher than say, the Nokomis area, which is a highly desirable area for its beauty and affordability.

Sunday, January 20, 2008

Why Now is the Best Year to Buy, Part 2

One thing that I did not get to talk about a few days ago regarding the best time to buy, mainly because illness stopped me from writing, was that for only some people this is true. While I am limited by my title on Blogger, it would probably be better to say that some people should not even consider buying a home in Minneapolis for the next five years.

I say this not because of the market correction, but because many really need to prepare for a serious purchase. A few things buyers will need to do:

  • With mortgage companies now requiring larger down payments, first time home buyers will need to start putting aside money years ahead of time. When we bought our first home, we had saved a enough for a 10% down payment. Buyers should have at least this much real equity into the home when they move in , as a "safety" cushion.

  • Credit FICO scores are now even more important. Buyers will need to spend the next few years correcting everything they can to improve their score. Get as close to 700 and above as you can.

  • Think seriously about where they want to live. With ever increasing prices for gas and food, buyers should think about the cost to commute to work, and pick an area to live that will have less impact on the pocket book in regards to the current cost of living in the Twin Cities. Unfortunately, incomes have not kept pace with rising costs and spending extra money on gas and goods could effect your overall ability to afford a home.

While the urge to achieve the American dream of home ownership is very real, buyers need to be realistic about their ability to purchase. Yes, there are tons of deals out there via builders and foreclosure, but only those that can afford them should be the ones buying.

Some took offense to the first post about the subject, saying I had no business saying that now is a great time to buy. Later this week I will further the discussion by again saying why now is a great time to buy and for whom.

Saturday, January 19, 2008

A Local Minneapolis Real Estate Snap Shot

Here is a great snap shop via the Pioneer Press of how real estate sales differ across the Twin Cities and greater metro region. When real estate agents say real estate is local, it truly is. As you can see via the map, areas like Inver Grove Heights and Eden Prairie have seen average sales prices actually increase this last year, but other places like Credit River Township and Stillwater have seen the opposite. When you look at statistics by neighborhoods, you can further see variations in sales prices. There are some neighborhoods in Minneapolis that perform better than others.

If you have any questions about your particular neighborhood, feel free to let me know. I will be posting this week market stats for the Minneapolis area so be sure to check back in a few days to see what has been happening by neighborhoods.

Thursday, January 17, 2008

Oh, those Kids... you can see, my posts have been a little sporadic the last week. I took my kids to a indoor play ground last week and just knew I would pay for it later. The entire family has been sick this week, and I haven't checked email for days. So keep checking in and I will post when my head allows!

Wednesday, January 16, 2008

Why Now is the Best Year to Buy

The last few months, I have read differing opinions on whether now is a good time to buy. Some say it is the perfect time, while others are telling people to wait. Some even go so far as to say the real estate industry is feeding the public false information in order to booster our own sales. I honestly laugh at this one, like there is some big conspiracy going on behind the scenes.

I am of the opinion that there has never been a better time to buy then now. Prices throughout the Twin Cities have dropped and there are tons of deals out there just waiting for a buyer. In fact the housing affordability index is back to 2003 levels, meaning homes are even more affordable then ever.
  • Builders - many have over built and are looking to dump inventory to recoup any remaining profit, or to halt any further losses. I have seen some homes with a $50,000 - 100,000 price drop, with closing costs paid by the builder, just waiting for buyers to come along.
  • Foreclosures - there are thousands of homes in foreclosure and as 2008 proceeds, banks are going to begin dropping prices lower, realizing that the losses they will be taking are necessary in order to rid the properties from their books.

As a buyer, what you need to understand is that you have never been in a better position to negotiate. If a builder is promoting discounts, don't be afraid to ask for MORE! If a property is in foreclosure, don't be afraid to offer less. If the listing agent tries to talk you out of doing so, ignore him. The final decision lies with the bank. If you can show you are a serious buyer, pre-approved, and ready to close, you have a better chance of making a real deal in today's market.

Saturday, January 12, 2008

Builders See Worst Year in a Decade

Twin Cities home construction fell for a fourth consecutive year.
(By JIM BUCHTA, Star Tribune)

Dogged by a stagnant housing market and an overhang of unsold inventory, 2007 was the worst year in more than a decade for Twin Cities-area home builders, according to year-end data released Tuesday by the Builders Association of the Twin Cities (BATC).

In 2007, home builders were issued 4,888 permits to build 8,961 units in the Twin Cities metropolitan area. That's a 29 percent decline in new units over 2006 and a 53 percent decline since the market peak of 2003.

"The past year significantly tested consumers' resiliency and confidence," 2007 association President Michael Noonan said. "Consumer confidence is the foundation of our market, and although eroded, it remains standing for us to rebuild."
The slowing market challenged builders, too. They drew only 275 permits to build 557 units in December -- a 43 percent decline in permits and a 28 percent decline in new units compared with December 2006.

The market is in its fourth year of contraction after an astonishing peak in 2003, as buyers worry that the market hasn't hit bottom and that prices will continue to fall, or are nervous that the houses they own won't sell if they decide to buy new ones.

Friday, January 11, 2008

Builders Pulling Back

During the boom, business was booming for builders. It seemed I would wake up in the morning, drive to the office, and see a new development going up on the way. I wondered, "Geez, where are all these buyers coming from". After a while, I started to figure it out.

One weekend, a few years back, I had a buyer who wanted new construction. They had heard about a new neighborhood going up and wanted me to take them by for a look. Needless to say they loved the neighborhood. I started asking questions to the sales agent and was a little disturbed by what I heard. She told me they only had a few lots left so my buyers should act quickly. I commented how the neighborhood had just gone active two week prior and she informed me that 27 of the 30 lots had been bought by one investor from south Florida. He was building homes on every lot and then would sell them upon completion. I turned to my clients and advised them they might want to reconsider the location because there was no telling what would happen to the neighborhood since a investor had bought almost the entire thing.

Hate to say it but they did not take my advice. They put a home under contract and moved in six months later. They called me a year later, wanting to sell their home because they no longer wanted to raise their kids in the neighborhood. When I asked why, they said that the investor had not been able to sell most of the homes he built and was instead renting them out on the cheap. To them, the area was no longer safe because the entire neighborhood was renters. (Not to bash renters, but many just do not care for a home like a home owner would.) I had to tell them they were more than welcome to sell, but that the market had crashed and they would have to sell for less then they owed. It was not a pretty sight.

But my point of the story is that too many builders sold to "investors". (I have a hard time calling them that because a true investor holds for the long term. Short time investors should really be called "speculators" because they are speculating the making of money in a quick amount of time.) When the builders sold to investors, it artificially increased the need for housing. So builders kept building.

Now builders are finding themselves in the position where they need to unload lots of inventory. The speculators are gone, and so are the buyers. In order to keep themselves out of financial trouble, they are turning to events like the upcoming New Home Auction in Minneapolis. Many could have kept themselves out of this type of situation if they just would have had the courage to pull back on the reigns. But sadly, the need to profit out weighed the need to look into the future and see that the roller coaster ride was going to come to an end sooner or later.

Thursday, January 10, 2008

Spring Fever is Setting In

So what am I doing putting a photo of the Mississippi River in late Spring on this blog? I am itching for Spring. I haven't seen the sun for something like seven days, and we have had snow on the ground since Thanksgiving. I am a gardener and I want to see some green. So the only thing I can do is go back in my photo archives and find a great example. Only a few more months to go and we can see the real thing!

Wednesday, January 9, 2008

A Crafty Little Tap

I couldn't resist putting this tap on my blog once I saw it advertised in the latest issue of Architectural Digest. Designed by Lefroy Brooks, you can find this and other designs on his website. The rocket design is just fantastic!

According to their website, "Lefroy Brooks manufactures a full range of shower systems, bathroom faucets and accessories, kitchen faucets, and towel warmers. All of the company's faucets are produced from solid brass, and each component is cast, polished, and assembled entirely by hand with 12 separate inspections throughout the manufacturing process to ensure superior product quality."

Tuesday, January 8, 2008

The New Face of Real Estate

My third arm is my laptop. I use it everyday, almost every hour of the day....well, maybe not that much. But I do check my email constantly, and am always working on my business, whether it be my blogs, my website, home searches for clients, or research for sellers.

The fact is, if you are a real estate agent and you are not connected to the Internet, then you don't have much of a chance to survive, at least in my opinion. In contrast, if you are thinking about increasing your knowledge of the Internet and the great services it can bring to your business, if you don't enter now, then you could be left behind.

Take blogging for instance. Many of the best real estate bloggers have been doing it for at least two years and they are seen as some of the best. If you get into it now, you will have to come up with a concept that catches peoples attention and sets you a part from all the other bloggers out there. If you don't, then you will be lost out in the blog-o-sphere and it will become increasingly more difficult for people to find you. Take Active Rain, for instance. It boasts 64,000 members, but only 1%, if even that much, contribute to the social network. The rest have tried jumping on the bandwagon, only to find that blogging takes work, and then fall off, happy to leave it behind. They just don't get it.

The Internet is the new face of real estate, and each year it grows in importance. It has taken me a good year to get my web presence to a point that it is starting to pay off. Buyers and sellers both are contacting me through various keyword searches. Google is my best friend, one I can gladly call my BFF (best friends forever).

But the Internet is also the life line of listings. Sellers need to understand that one of the most important questions they need to ask an agent is if they have a web presence. Try typing in the agent's name and see how many times they come up on the search. (Note: there might be other people out there with the same name, so make sure you find the correct person). Chances are, the agent might pop up once, and for a website that is mediocre at best.

Buyers already turn to agents for help that they find on the Internet because they see them as knowledgeable and credible. Sellers need to start doing the same. The days of hiring an agent that is a friend of the family, or worse, a family member, are coming to a close. Competition is just to fierce for the part-time agent.

Monday, January 7, 2008

A Little Update for Minneapolis

We are in the middle of a computer transition in my house so accessing a computer is spotty at best. I haven't been able to do a thorough market analysis for Minneapolis, so I will give you this quick snippet from the Minneapolis Area Association of Realtors:

"Activity in the Twin Cities housing market saw a Valley Fair-esque drop for the week ending December 29, compared to the week before. Blame Santa Claus. New listings, pending sales and total inventory all fell at least several hundred units as Twin Citizens focused on celebrating the holiday season during the 12th snowiest December on record. Due to the unique weather and the vagaries of the Christmas holiday, little meaningful context can be gleaned from the decreased numbers."

However, we can utilize some updated figures :

  • The Days on Market Before Sale increased to 158. Although this is higher than December 2006 by 4.6 percent, the figure will likely start to decrease as 2008 begins and the holiday season ends.

  • The Percent of Original List Price Received at Sale fell slightly to 91.2 as buyers exerted their seasonal power during the slow December sales month.

  • Supply-Demand Ratio for January fell to 10.46, which means there will be roughly 10.46 homes for sale for each buyer in January.

Sunday, January 6, 2008

Minneapolis Tax News for 2008

The provision that allowed Hennepin and Ramsey counties to collect additional State Deed Tax and Mortgage Registration Tax expired on January 1, 2008. There was a provision to continue the increased rates proposed last year which was vetoed by Governor Tim Pawlenty. Hurray for the Governor!!!

The result: Hennepin and Ramsey counties are now in sync with the rest of Minnesota counties in charging $3.30/1,000 for State Deed Tax and $2.30/1,000 for Mortgage Registration Tax.

Don't be surprised when they try to reinstate it sometime in the future, but for now, home owners can save some additional money when they go to sell their home in 2008.

Friday, January 4, 2008

Hello, My Little Chickadee

Taking photos of birds is difficult, in my opinion. They don't like you to move. Getting them into focus is also work. I was lucky this little Black Capped Chickadee posed for me just long enough to get the shot.

Thursday, January 3, 2008

Interesting Quotes

The Builders Association of the Twin Cites puts out a monthly market report for new home construction. I was taking a look at the most recent report, November, and read some interesting quotes:

  • Builders continue to do what they absolutely have to do in this market downturn. They are repositioning themselves for the market’s eventual recovery by cutting back on production and working down their inventories.” ~ Brian Catalde, NAHB President
  • The progressive tightening of mortgage lending conditions during 2007 has been the major factor behind the setback in home sales this year. NAHB expects home sales to begin a gradual recovery in the early part of 2008. For this pattern to materialize,
    the U.S. economy must avoid recession and conditions in the mortgage finance system must improve. We are looking to the Federal Reserve to implement at least two more cuts in short-term interest rates to ensure that those conditions are met.”
    ~ David Seiders, NAHB Chief Economist

Wednesday, January 2, 2008

Confessions of New Construction, Part 6

Finally, Construction!

Yes, I am a little behind in the series. The foundation to our new house was poured in late October, before the first hard frost hit. Building a home in the winter can be a little nerve racking in Minnesota because you never know when the ground is going to freeze or when the first big snow will fall. Since we actually have basements here in the Midwest, things like freeze depth have to be taken into consideration when building.

Around the Twin Cities, the minimum foundation footing in most areas is 42 inches. This means that above 42 inches, the ground could freeze and cause damage to the foundation should you pour a footing for less. A good example to describe what happens is old home porches. If you have ever lived in an older home that has a front porch, at least in Minnesota, you might be sleeping soundly one night only to be woken up by some major creaking of your home. What is happening is the porch is actually moving because the footings usually only go down anywhere from 12-24 inches. When the ground freezes, these footings freeze as well, causing the porch to become fixed. When the ground thaws in the Spring, the porch is released from it's winter hold and moves back to an original position.

To alleviate this problem and create a stronger foundation, footings are now required to be at least 42 inches into the ground, the current accepted ground frost depth. If you build below the frozen ground in the winter, then you won't have to worry about those late night creaks, or your porch separating from the rest of the house.

Read previous posts from the series below:

Part 5, Digging the Foundation

Part 4, Staking the Lot
Part 3, Shopping Day
Part 2, Picking the Lot, and Part 2.1,
Part 1, Picking the Builder

If you want to learn more about the luxury side of real estate in Minneapolis, check out my other blog.