For Downtown Minneapolis real estate, in as few words as possible – 2008 will be a lot like 2007.

That is:
- There will be more properties for sale than buyers to buy them.
- There will, however, be fewer listings in 2008 – for the 3rd consecutive year.
- We expect the number of sold properties to be flat or a few percentage points above 2007.
- We expect the average price to appreciate modestly (2-3%).

What does it mean? Is the market bad? Is the market good?
The honest answer is that there is no such thing as a good market or bad market – current market conditions will favor either a buyer or seller (as a balanced market is rare indeed). Today’s market conditions favor buyers.

Newly-built condos in Downtown have slowed over the past 12 months, to the point that most everything that started construction is built. Two buildings remain under construction, Phoenix on the River and Zenith - accounting for less than 200 homes. The result – fewer new homes added to a bloated but shrinking inventory.

Completed new buildings ready for new owners include 730 Lofts, Harvester Lofts, The Ivy, and Bridgewater. The result – great selection of never-lived-in homes sold by motivated developers.

What will hurt the Downtown real estate market in 2008?
- Continued negative news as reported by uninformed reporters and sold by unscrupulous headline writers.
- Difficult loan underwriting guidelines.
- Economic uncertainty.

What will help the Downtown real estate market in 2008?
- Continued erosion of record-high inventory.
- Fewer resale listings.
- Amazingly-low mortgage interest rates.
- Willingness of developers and individual sellers to prepare carefully and negotiate fairly.

The indicators of a real estate market recovery are three:
1) a decline in the number of listings — we are entering the 3rd year of reduced listings
2) a decline in the number of days on market — 2007 was 14 days less than 2006
3) an increase in the percentage of sale price vs. asking price — has been flat but not in decline

The opportunities for buyers are tremendous right now. For sellers, if you don’t have to sell, continue to wait out the current market correction. For sellers who must sell, be fair on price and be sure your home shows like a model (your competition already does).