The much-cited S&P/Case-Shiller Home Price Indices out Tuesday provided yet more confirmation of a firming housing market in Minnesota and nationally in the month of May.
(The Case Shiller numbers lag other housing metrics, no doubt because the methodology must require a lot of hunting. The index uses " data on properties that have sold at least twice, in order to capture the true appreciated value of each specific sales unit.")
According to the index, Twin Cities home prices rose 1.3 percent from April to May (that's on a seasonally adjusted basis), and almost 1 percent compared to May of 2011 (that's on a seasonally adjusted basis).
Those aren't necessarily big jumps, and prices remain far below their pre-recession highs.
Minnesota Public Radio's Jess Mador reports that S&P's Maureen Maitland is urging caution. "This may not be the recovery, but the last couple months of data have been more positive than negative, so there definitely is a glimmer of hope," Maitland said. "But you have to be patient and wait a few more months and see what the rest of 2012 is going to tell us."
Still, a positive trend is fairly evident, and the Twin Cities is improving faster and sooner than the composite index encompassing 20 major metropolitan regions.
The Twin Cities registered the lowest (seasonally adjusted) index reading in November of last year. The 20-City index bottomed in January.
Since hitting bottom, prices have risen 5 percent in the Twin Cities, 3 percent among the 20 composite cities.
The non-seasonally adjusted numbers show a similar pattern, when compared to the same month a year before.
The rate of annual decline in Twin Cities home prices started slowing in June of 2011, and prices notched gains starting in February of this year. The rate of increase has grown from 1 percent in February to 5 percent in May.
The Case/Shiller numbers are consistent with price data compiled by the Minneapolis Area Association of Realtors show.
MAAR reports the median sales price in the Twin Cities bottomed in February at $138,000, and rose to nearly $179,000 as of June.
So, while there's still a lot of hill to climb, the market appears to be gaining elevation after a long descent.
General Mills' earnings for its current fiscal year won't be as good as the company expected.
The maker of foods such as Progresso soup, Hamburger Helper and Yoplait yogurt, is reducing its full-year earnings forecast by about two percent.
Edward Jones analyst Jack Russo said consumers are resisting the attempts of General Mills and other food companies to pass long rising commodity costs. And that's hurting sales and profits.
"A lot of companies have raised prices on their products to offset higher commodity costs," he said. "And it appears that consumers are voting with their feet and have just said, 'Look, we can't afford some of these higher prices' and have cut back on purchases, perhaps looking at [grocery stores'] private label [offerings] a little bit. Or perhaps just cutting back period on what they're spending."
Bloomberg Research consumer products analyst Ken Shea said it's hard to fight consumers' frugality.
"Consumer spending is tight," he said. "And consumers are looking for bargains. So, it's just a tough environment for food manufacturers in general to generate sales and profitable growth."
The federal government said grocery store prices rose by nearly five percent last year and may rise by about three percent this year.
The annual rate of decline in Twin Cities home prices slowed somewhat in November. That's according to the latest report from Standard & Poor's Case-Shiller home price index. Prices fell 5 percent compared to November of 2010. That was better than the 6 percent drop reported for October.
And the Twin Cities' performance bucked a national trend. The annual rate of decline worsened in November for the Case-Shiller 20-city composite index. Of course, it's worth pointing out that the Twin Cities still had a steeper over-the-year drop than 20-city index, which fell 3.7 percent.
The picture in the Twin Cities is a bit murkier when you look at the monthly numbers. If you don't take seasonal factors into account (which are a big deal in a place with intense weather, like Minnesota), home prices fell 0.6 percent between October and November in the Twin Cities. But if you do take seasonal factors into account, prices rose a teensy bit: 0.1 percent.
Experts usually insist on using seasonally adjusted numbers. The folks at S&P's Case-Shiller used to recommend doing so as well. But then they switched and now seem to prefer the non-adjusted numbers. They say there's too much weirdness with various foreclosure moratoria and other lending issues that muck up their seasonal adjustment process.
But that can make for a confusing picture when you've got the seasonally adjusted numbers pointing one way and the non-seasonally adjusted numbers pointing another way, as in this November report. That's why we typically prefer to look at the year-over-year numbers, which are more solid.
S&P officials say nationally there are few if any signs that a turning point in the housing market is close.
Posted at 11:48 AM on January 24, 2012
by Bill Catlin
Filed under: Twin Cities metro
Shares of TCF Financial, parent company of TCF Bank, closed down 9 percent Tuesday after the company announced a big drop in fourth quarter earnings.
TCF reported net income of $16 million in the final three months of last year, a 52 percent decline from the same period the year before.
CEO Bill Cooper said the quarter saw the full effect of the so-called Durbin Amendment, a cap on the fees banks can charge retailers for debit card transactions.
"TCF's fourth quarter was impacted by the first-full quarter of the Durbin Amendment, which reduced our fee income on debit cards by almost 50 percent, which impacted us almost $15 million for the quarter," Cooper said.
TCF relies on fees and service charges for about one fifth of its revenue. Last year revenue from fees and service charges fell by nearly $55 million or about 20 percent compared to 2010.
Cooper said TCF will continue pursuing ways to increase revenue and reduce costs "as we reposition TCF for the future."
Martin Moylan, Minnesota Public Radio
St. Paul, Minn - The Mall of America will undergo a major big transformation this year when Bloomingdale's, an anchor tenant since the mall opened in 1992, will close its store.
Several new tenants have been lined up that will increase traffic and sales, say Mall of America officials.
The store will close by mid-March as part of what Macy's, the parent company of Bloomingdale's, calls regular "selective pruning." The Mall of America store is one of four Bloomingdales locations that'll close nationwide.
"The stores were not performing to the company's expectations, and that required us to make the difficult decision to close stores that no longer meet our performance requirement," said Marissa Vitagliano, Bloomingdale's spokeswoman.
The Bloomington store closing will affect about 125 employees. Some will be offered jobs at other stores. Employees who are laid off will get severance benefits, the company said.
Some industry observers say the Mall of America and Bloomingdale's were never a good fit.
The Midwestern mall couldn't deliver the steady stream of repeat—affluent customers a Bloomingdale's store needs to succeed, said Howard Davidowitz, retail consultant.
"(Mall of America) is an experience kind of place," Davidowitz said. "It's an extravaganza. How on earth does a traditional, upscale fashion store exactly fit with that? I don't think so."
But Davidowitz suspects a highly-favorable leasing deal enticed Bloomingdale's to open a store at the mall and stay there.
Other retail watchers agree that Bloomingdale's was not a good cultural or fashion fit for the Mall and its Midwestern visitors.
"It's an east coast company and they tend to be more fashion-forward," said Dave Brennan, co-director of the Institute for Retailing Excellence at the University of St. Thomas. "And I think Minnesotans, generally speaking, don't go as much upscale."
Mall officials have lined up several tenants to fill the nearly quarter-million square feet of retail space that Bloomingdale's will vacate.
Those new tenants include four "fashion forward" retailers, Mall officials won't name them, but say three are new to the Twin Cities market. The mall also plans to locate what it calls "destination, value-priced" retail on the third floor of the Bloomingdale's store.
But that value-priced retailer won't be Target, which plans to open only one store in the Twin Cities in 2012. That store will be in Inver Grove Heights.
Brennan has an idea about one possible replacement tenant.
"The most likely one I can see is a Von Maur," he said.
That Iowa-based upscale retailer has a store in Eden Prairie. Brennan
also sees Herberger's as possible tenant at the Mall of America.
Breaking up the Bloomingdale's floorplan into smaller stores should make it easier to attract new tenants.
"They will be able to find someone to fill the space, I'm certain,'' said Jim McComb, a Twin Cities retail and real estate consultant. He expects the mall to be unfazed by Bloomgdale's departure.
"I don't see it as a significant hit to traffic at the mall," he said.
Mall of America officials suggest the unnamed replacements will be an upgrade.
"Bringing in some new brands to this area — that's going to drive additional traffic, not only to Mall of America but to this specific area of the Mall of America," said Dan Jasper, a mall spokesman. "Foot traffic will increase. Sales will increase.
"Those same shoppers are going to explore the entire mall."
Last year, the mall's sales rose about 10 percent and foot traffic was also up, despite an underperforming anchor store — the soon-to-depart Bloomingdale's.
Posted at 3:40 PM on January 4, 2012
by Minnesota Public Radio
Filed under: Twin Cities metro
By Martin Moylan, Minnesota Public Radio
St. Paul, Minn. -- The Bloomingdale's store at the Mall of America will be closing.
A spokeswoman for the company confirmed today the store will close, but did not provide any other information.
She said the closing date and other details will be revealed this afternoon.
Bloomingdale's was one of the original anchor tenants of the mall when it opened in August of 1992.
Three additional Bloomingdale's stores will close in early spring 2012: Atlanta, Ga.; Oak Brook, Ill.; and North Bethesda, Md.
Final clearance sales at these locations will begin on Jan. 8, and run for approximately 10 weeks.
ManpowerGroup is expecting employers in the Twin Cities and around Minnesota to pick up their hiring a bit in the first three months of 2012, according to survey results released today.
The national staffing firm's report focuses on a metric called the "net employment outlook," which is the percentage of employers surveyed who plan to hire minus the percentage planning to cut jobs. Manpower puts the "net employment outlook" for the first quarter of next year at +7 percent both for the Twin Cities area and for Minnesota as a whole. Last year's projections ranged from +4 to +5 percent.
Manpower's survey reflects a slight bump in companies' intentions to hire compared to their intentions at this time last year. But it also projects a whole lot more of the same tepid growth. Seventy one percent of Minnesota employers polled intend to maintain their current staffing levels in Q1 2012.
Statewide, the company says job prospects appear best in sectors including manufacturing of durable goods, wholesale/retail trade, transportation & utilities, information, professional & business services, education & health services, leisure & hospitality and government.
The firm says employers in non-durable manufacturing, which includes food companies, plan to reduce staffing levels.
Manpower's Minnesota survey typically involves about 400 respondents statewide and about 220 in the metro area.
We here in the newsroom have been wondering why the OccupyMN presence hasn't been as intense and confrontational as those in areas like New York City and Oakland, in particular.
Certainly differences in police actions may be part of the explanation. The scene in Minneapolis has not included the confrontations with police and mass arrests that have happened elsewhere.
But the regional economies may offer some additional context, if not explanation.
The Twin Cities has had much lower unemployment than Oakland and New York. That may mean a smaller portion of the population has the time and built-up frustration about the economy that can fuel protests.
And according to this analysis by a Brookings Institution scholar, the Twin Cities has a meaningful share of top household incomes, but we have a smaller portion than either the San Francisco or New York areas. Top earners are likely more visible in those areas. The study has this to say about the birthplace of the Occupy movement:
"Unsurprisingly, the New York metropolitan area has the largest number of very high-income households. Nearly 12 percent of top-income households live in the New York region, [which has] about 7 percent of all households."
Click on the map below for a larger version.
Not immediately sure what to make of this new data from the feds on Twin Cities pay and benefits during the Great Recession.
But it looks like our region took a bigger-than-the-nation hit in wages and total compensation during the Great Recession but is swinging back now in the "recovery," faster than other major cities.
Couple of intriguing Bureau of Labor Statistics charts. These are twelve-month percent changes in the BLS Employment Cost Index -- private industry workers, not seasonally adjusted.
Twin Cities "wages and salaries, the largest component of total compensation costs, advanced at a 3.2-percent pace for the 12-month period ended December 2010," BLS wrote. "Nationwide, total compensation costs rose 2.1 percent and wages and salaries, 1.8 percent over the same period."
The data has me thinking about comparing wage increases in Minnesota. The state Department of Employment and Economic Development keeps good data on this.
I'm going to look at some statewide wage data during the recession, maybe compare private sector pay vs public sector pay over the past three years.
Overall, the BLS data is positive and reinforces the notion that for people who have jobs in the Twin Cities, there's reason for optimism.
Take a look at the report and the data and drop us a line if anything intrigues you.
Here's one final chart comparing to the Twin Cities to other cities.
Local real estate market watchers expected home sales to drop off after the federal home buying tax credits expired at the end of April.
But maybe they didn't expect this kind of drop.
(Source: Minneapolis Area Association of Realtors)
The newest data from the Minneapolis Area Association of Realtors shows a roller coaster dive in sales since the credits -- $8,000 for new home buyers and and $6,500 for repeat home buyers -- ended.
The thick red line shows a steep rise to the end of April as buyers rushed to grab the credits and then the drop afterward.
The credits, part of the massive federal stimulus package, helped keep the residential real estate market alive during the housing crisis. There was a lot of breath holding as folks waited for the fallout once the credits ended.
By mid-May, the Minneapolis Realtors declared, "We are pleased to announce that the tax credit deadline has officially passed and the world did not end!"
The group did project a slow summer selling season, noting that many would-be summer buyers got in earlier to get the credits. Still, this is prime home buying season.
So what happens next? The sales market has tanked temporarily. How long does that go before folks start to really get concerned?
"If year over year (pending home sales) don't really start to close the gap by the end of June I'm going to start getting nervous," Dickinson said.
"From a basic search I ran the numbers for next week should be up. So that's a step in the right direction. But the same week last year was our best week last year and we're still going to be down from that substantially."
Searching for comparisons, Dickinson looked at auto sales after the "Cash for Clunkers" car buying credits expired.
Here's a chart by the Federal Reserve Bank of St. Louis showing U.S. auto sales. That spike coming out of the gray area is the sales boost provided by "cash for clunkers." The business then swooned before showing some signs of recovery.
The cash for clunkers experience "suggests a month or two hangover is very likely, though this (housing) stimulus was going for so long that the hangover could be longer too," Dickinson said.
"Come July or early August we'll have a better feel for what the second half of the year will look like" with Twin Cities home sales, he added. "Up until then there's just too much influence from the tax credit expiration to draw any good conclusions."
Looking at the auto sales chart above, there may be one other lesson for the local housing market: Recovery is coming but it'll be a long climb back to the days before the recession.
Bonus: Brad Fisher, President of the Minneapolis Realtors group, tells MPR News the drop doesn't bode well for home prices. "We expected to see a decline. We are just uncertain now to see how long it's going to take for the consumer to realize they still have great interest rates, they still have great values out there."
Double Bonus Chris Farrell, MPR's excellent economics correspondent, posted a "good riddance" to the tax credits the day they expired, arguing, "The market shift to lower values would have been much quicker and fairer without the credit. The best policy in this case is let the market work."
Got insights into the housing market in the Twin Cities or greater Minnesota? Post below or contact us directly at MinnEcon.
We asked for feedback and got enough good stuff that we wanted to take one more run at these issues. (We're always interested in more voices, so if you have some insights on commercial real estate in the metro area and beyond, drop us a line. If we get more good insights, we'll post again.)
The basic questions we've asked: How deep are the problems in commercial real estate in the Twin Cities and around Minnesota?
Are we headed for a spike in foreclosures as commercial owners deal with vacancies and struggling tenants? What will take to avoid more, serious problems?
There's a "light at the end of the tunnel" view at the University of St. Thomas. The school's new commercial real estate survey shows "signs of recovery over the next two years" in commercial real estate.
The results are based on answers from a group of 50 people connected to retail, office and industrial space in the Twin Cities, responding to questions in April about the health of the market by 2012.
"These people are expecting steady, moderate growth for the next two years." said Herb Tousley director of real estate programs at University of St. Thomas.
"Nobody felt like it was going to turn around overnight and be booming in six months. People did seem to think we're turning the corner..."
This is the first of what will be twice-a-year surveys. Tousley says it will need "5-6-7-8 data points to be statistically significant."
Still, he notes that Minnesota's employment health will be the key factor in how commercial real estate fares.
"It all follows jobs and unemployment. If people go back to work and employment increases, that means there's a need for more office space. Everybody seems to think that employment is going to get better. But it's going to be a long climb out."
No doubt there. While the latest Minnesota jobless numbers showed marginal improvement , Creighton University's most recent analysis estimates it will be three more years before Minnesota returns to its pre-recession job levels.
Experts in MPR's Public Insight Network have offered us some great perspective on the current state of the real estate markets. That includes Twin Cities banker Hans Hansen.
"The bigger issue with commercial real estate (and banks' balance sheets in general) is the amount of Other Real Estate Owned on banks balance sheets," says Hansen.
These are residential and commercial properties that banks have foreclosed on and taken back from the original borrower, he wrote us on Saturday. "In general, this real estate is supposed to be sold off in a prompt manner (usually one year), as this represents a 'non-earning' asset on the banks' balance sheets."
I have a summary of 77 Twin Cities community banks results for the year ended 12/31/09, as well as their balance sheets. These figures were obtained from the call reports from these 77 institutions. As of 12/31/09, these banks had a total of 24% of their capital (or owner's equity) in OREO.
Now this is a big problem, as these assets are not only not earning the bank any money, they are COSTING the banks money due to insurance, taxes, attorneys fees, and other holding costs the banks must incur to maintain the OREO until it is sold.
Even though the Fed is keeping interest rates low so banks can 'earn' their way out of this recession, there are not many businesses that can afford to keep that much capital not earning money for the company.
Hansen sees these problems continuing until banks can earn enough to offset the write offs they've taken -- and may have to take in the future as they see the real estate they own "into a market with drastically lower values than when they took it on to their books."
6/9 UPDATE:In the Federal Reserve "Beige Book" report today, the Minneapolis Fed notes the region's commercial real estate difficulties:
Commercial real estate was slow. The amount of unused space in the retail market in Minneapolis increased by 135,000 square feet during the first quarter. An industry contact in northern Wisconsin noted that nearly every sector in his area was overbuilt.
Got another view on the commercial real estate markets? Post your insights below or contact us directly.
We raised the issue a few days ago about the problems some are seeing in the Twin Cities commercial real estate markets -- specifically concerns about financing and a coming foreclosure wave.
We reached out to more than a dozen experts from MPR's Public Insight Network for perspective and got some great feedback, including two more views we thought were important to highlight in a second post.
"My clients are experiencing more difficulty getting their properties to appraise at a level sufficient to refinance existing principal mortgage balances," said Brent Holmes, owner / broker with the Twin Cities firm Holmes | Tongen Investment Real Estate Sales.
"As a result, my clients are more frequently having to bring additional cash (aka equity) to close a refinance of their properties. "
The same is true on acquisitions; in many cases purchasing power has declined - in some recent examples it takes 3 times the equity to make the same acquisition as it did 2 to 3 years ago.
Owners / investors are experiencing an erosion in their balance sheets, which makes it much more difficult to borrow dollars. Operating lines of credit have been eliminated or much diminished even for very strong clients.
All this leads to a cash crunch and higher risk of problems coinciding with the maturity of debt. There is an inability to sell and an inability to refinance -- yuck!
There are owners with strong equity in their properties, he adds. "Most owners that I am in touch with are finding there way through, but it remains a difficult uncomfortable time."
Tarry Edington typically deals with residential housing in Grand Rapids with teh Itasca County Housing and Redevelopment Authority
But the housing development specialist was willing to share his commercial real estate observations on the town he's lived in for 20 years. He says he's never seen so much commercial real estate for sale and for lease.
What I see is that which is advertised for sale or lease, most of which is retail and office space. I am certain there is other property, as there always is, that is vacant and available but not openly advertised.
I have seen some of the advertised property vacant for well over a year. And, it appears there are additional properties coming into the market regularly. In addition to the vacant properties, I observe an increased number of small businesses for sale. It is my conclusion that the vacant commercial real estate and the businesses for sale are a reflection of the general economic conditions.
While the Grand Rapids community remains vibrant it is obvious there is a retraction in the level of economic activity... Some of the "strip mall" and "reuse/conversion" properties have never been occupied because they were just coming to market when the recession and meltdown events occurred.
Minnesota Public Radio's Dan Olson gave us an in-depth look last year at the commercial real estate market in the Twin Cities and the potential for a foreclosure storm. The basic problem then -- making payments and refinancing -- haven't gone away.
"Those issues are largely hidden from public observation," Edington added. "In large part, the resolution of those issues will be dependent upon equity, cash flow, property valuation and lender forbearance. We will all get to observe as it plays out in the days ahead."
UPDATE: A new University of St. Thomas survey shows "light at the end of the tunnel for commercial real estate in the Twin Cities market," signs of recovery over the next two years. We'll interview the St. Thomas prof who oversees the survey and post later.
Think these concerns about commercial real estate are on point or out of line? Post your insights below or contact us directly.
But local leaders are the ones, ultimately, who'll have to make it work. Whatever solution is hatched in St. Paul, county and city leaders will still have to find a way to pay the bills. In Aitkin County this Saturday, there's a "Radiothon" to raise money to keep library branches fully open.
We reached out to local officials in MPR's Public Insight Network Wednesday after the state Supreme Court rejected Gov. Pawlenty's use of "unallotment" power to make deep budget cuts.
While it's good to debate the merits of taxes vs. debt vs. smaller government, local officials are faced with a practical problem of watching the Statehouse and waiting for the fallout and we wanted to hear from them.
"As a 15-year public employee these are probably the most difficult times I've seen," said Stony Hiljus, Coon Rapids city attorney.
"There is a significant level of anxiousness, frustration, and fear in public employment right now and I know of colleagues who are considering transitioning to a private law practice as a result. These fears are shared amongst all sectors of public employees."
Hiljus made it clear he was speaking only for himself. But it's a sentiment we've heard from other public sector folks the past few months.
Below are responses we got from our Public Insight sources. Take a look and post your thoughts below or contact us directly.
Rick Morris, Waseca County Commissioner
As a county commissioner our county program aid has been cut from over $1 million to just over $300,000 by unallotment. This has caused us to give less to the library and they in turn have reduced their budget by reducing hours and cutting their book and materials budget by 50%.
We have not filled positions left open by retirement in our highway department, Auditor-treasurer's office, Land fill and recorders' office. These reductions have caused reduced services in each of these departments.
While the Supreme court ruling is important it doesn't affect the problem of lost revenue to the State. I am only one commissioner but I suspect we will continue to cut our budget reflecting what we believe will be an end to county program aid in the future. All indications are that the state will have less in the next biennium.
On the other hand we will be looking at other ways to raise revenue short of raising taxes. The cost of Government continues to rise so we need to balance our own budget with user fees, cuts, etc.
Stony Hiljus, Coon Rapids city attorney
Like many local governments we have taken many different actions in response to unallotments and cuts to LGA and MVHC. We eliminated positions, laid people off, held positions open, delayed projects, looked for alternative revenue sources to fill gaps where we felt we couldn't make employee cuts etc.
I know that here in Coon Rapids we have tried to make our local budget as much "State-Proof" as we can ... I can say that despite rhetoric from the State there have been cuts to police and fire and a change in how we provide emergency services. These services cannot withstand further cuts without seriously restructuring emergency response.
I think it is unlikely that you'll see many cities file a lawsuit against the state over unallotment. There seems to be some thought that doing so will only make things tougher for local governments in the future. I also think the polarization at the state and national level between the dems and reps is starting to filter down to local government politics and we will be in for a difficult election cycle.
Jim Hurm, city administrator, Austin
The City of Austin has lost $2.1 million in LGA (local government aid) over the last 16 months. Our annual budget is about $14 million. Cities were not part of the "unallotment" lawsuit and have taken a significantly harder hit than other areas of the state budget.
Austin's City employment is down to 138, a drop in jobs of about 2 a year over the last 25 years. We are lean and do well in financial management.
More cuts in LGA ... and levy limits will mean even more local government jobs in poor outstate communities. Goodbye "Minnesota Miracle."
It's too early to tell exactly how the ruling will impact the budget for the remainder of 2010 and as we move into 2011.
The greatest fear is that if all the funding that was unallotted is restored that will increase the shortfall which will require deeper cuts then already planned. So it's kind of a mixed bag... I am glad that they ruled the way they did.
Gord Prickett, Aitken County planning commission
In Aitkin County the very effective "Sentence to Serve" program was threatened when state funding that supported it was cut.
This program puts county prisoners out into the community doing essential work, under close supervision. The County Commissioners will keep the program alive by shifting extremely limited monies around.
We are having to hold a "Radiothon" to raise the $7000 this year to keep the Aitkin and McGregor Libraries open 6 days a week.
County funds were short, with LGA cuts, so Commissioners have made reductions to the East Central Library system. In hard times our public libraries are more important than ever, for job searching and internet use. And family and children's reading. Plus public meetings and programs
BONUS INFO: Listen today's Midmorning discussion on the budget featuring Rep. Paul Kohls: R-Victoria, who serves on the House taxes committee, House majority leader Rep. Tony Sertich: DFL-Chisholm and Minneapolis Mayor R. T. Rybak.
Click on the play button to listen:
Like a pummeled prize fighter, Minnesota housing markets continue to rise but stagger.
Positive signs -- supply and demand of homes for sale is stabilizing in the metro area -- continue to be met by data showing more problems on the way.
The latest troubling numbers come from HousingLink, a Twin Cities housing and research group that found big percentage increases in foreclosures in the Twin Cities suburbs and exurbs in the first quarter of 2010 vs. 2009.
CORRECTION: HousingLink corrected several numbers this afternoon. A double-counting issue by Dakota County led to numbers being overstated in the HousingLink report. That threw off the overall numbers. Dakota County showed 545 foreclosures in the first quarter of 2010, a 36 percent increase over the same time in 2009.
I've corrected the data below and updated the charts.
Overall, the HousingLink data showed
nearly 7,000 6,716 Minnesota foreclosures in the first three months of 2010 -- up 31 28 percent over the same period last year.
"I think we're seeing somewhat of a realization of a foreclosure crisis that has gone from being more of a metro and urban phenomenon (lending/borrowing practices) to one that hits more broadly across all geographies as a result of unemployment," said Dan Hylton, research manager with HousingLink.
The Minnesota Home Ownership Center notes that pre-foreclosure notices are up nearly 20 percent between the first quarter of 2010 and 2009.
"I do believe that we are seeing the number of notices trending upward in the suburban and exurban areas," said Ed Nelson with the center, a non-profit group that counsels people in danger of losing their homes.
"All of the suburban counties are trending upward for 2010... and are already ahead of where they were during the same time period last year."
While the numbers are definitely not good news, Realtor Aaron Dickinson notes the market is in much better shape to handle the next wave of mortgage problems than it was in 2008.
"For a year or so there have been stories of more foreclosures coming," Dickinson wrote on his Twin Cities real estate blog.
"While I don't doubt the warning and we're starting to see a tick up in sheriff sales, I do think that given the speed that the banks are going that it will be 2011 before we see much of this expected surge of foreclosure/(real estate owned) inventory on the market."
We wrote a few weeks ago that the next wave of mortgage problems was approaching.
While they won't swamp the market like they did two years ago, the newest wave will continue to push back the day when we can declare the market recovered.
BONUS: Listen to HousingLink's Dan Hylton talk about the numbers with MPR's Tom Crann:
What's the housing market like around you? What story(ies) should we be reporting on when it comes to housing?
Tell us. Post something below or use this form to share a story.
Was it worth the money?
It's a question with no easy answer when it comes to the federal home buyer credits.
The credits ($8,000 for first time buyers, $6,500 for repeat buyers) ended on Friday. The Congressional Budget Office expects the taxpayer cost to run about $14 billion.
There's little argument the credits threw a life line to the housing and real estate business and made the buy-now decision easier for many people -- especially younger buyers.
But the bill's coming due.
"My real estate business has been extremely busy for the months of February, March and April," said Jim Dooley, an independent real estate broker in Apple Valley and a source in MPR's Public Insight Network.
"All of the business was directly related to the $8,000 first time home buyer credit, and the $6500 move up buyer credit," said Dooley. "Sellers rushed to get their properties ready and on the market to have time to get a contract by April 30th."
Now, though, he's seeing "a dramatic drop in my business happening after April 30th. The number of potential and actual clients on the horizon is very small. Without more federal stimulus, I can't see where strength in the real estate market will come from."
John Ehlers,a residential broker in Plymouth, felt the same. "Buyers that were going to buy in the next few months bought in the last two months, thereby lessening demand into the future."
The first tax credit deadline (in November) made a huge impact on the first-time home buyer market," said Emma Faris, a Minneapolis Realtor.
I had as many closings in November as I had had during the entire summer (my busiest time).
This time around, with the April's-end deadline, my buyers are not nearly as motivated. It was a bit of a "cry wolf" scenerio.
Some buyers believe it will be extended and the other pool of buyers feel they don't want to "push it" just for the $8,000.
Also, from questioning my buyers about the tax credit-- many felt it was going to be put in a savings account and used in an emergency situation. The real estate community (and perhaps the federal government) thought it would be used as a financial incentive to buy and to increase the value of the home. That was not the case with my buyers.
Aaron Dickinson, a Plymouth Realtor who writes a detailed blog on the Twin Cities real estate market, noted a "huge crush of buyers descending on the lower priced segments of the housing market" the past 45 days.
Several of my buyers have been in 5+ multiple offer situations and even more have found that 1/2 the houses they wanted to see were sold before we even saw them. This surge of demand is most certainly a result of the tax credit.
Many of the Realtors, loan officers and title closers that I've talked to are all expecting (and hoping!) for a little calm in our market in May & June so that we can get caught up and take a second to relax. Just like car dealers saw a little lull to their business after the cash for clunkers, I expect the same in housing.
Big-cost houses -- $500,000 and higher -- will continue to struggle, though, he adds. "Too much inventory, tougher rules on jumbo mortgages, and fewer move-up buyers will all temper demand for the near future."
Overall, though, Dickinson believes as the economy starts to add jobs and consumer confidence rises, "I think we'll see demand for housing take up the slack left by the tax credit, which is what was hoped for all along."
Keep the conversation going. Post something below or contact us directly and tell us your experience with housing or the home buyer credits during the past few months and what the future looks like from your vantage point.
MPR chief economics correspondent Chris Farrell bid "good riddance" to the home buyer credits.
St. John's University economist and MinnEcon contributor Louis Johnston wondered aloud a few weeks ago about the broader costs of the credits.
MinnEcon note: Sarah Boden, a student interning this semester at MPR News and working with MPR's Public Insight Network, ventured out recently to some north Minneapolis scrap yards to see who's scrounging and selling metal in the recession.
"Many scrappers I talked to live on the fringes of society," Boden said. "Then there are some average people just trying to make money."
Here's her report.
The search for scrap metal is a constant hustle, and a year ago it was a hustle that didn't pay, so many stopped scrapping.
These days, "scrappers" can earn a good living.
Precious metal retailer Kitco reports that copper cost less than $2 per pound back in April 2009. A year later copper is worth more than $3.50 a pound.
On a recent afternoon, scrappers hurried to get their day's scrap to Kirschbaum-Krupp before it closed at 4:30. It's one of three scrap yards located in north Minneapolis where people can sell metal for profit.
The scrappers I spoke with say they find their metal in alleys or on the side of the road; some may even knock on stranger's door if they see a pile of scrap in a person's yard and ask for the material.
Charles Davis stopped scrapping back in October 2008 right after metal prices plunged.
"You be working too hard in that cold to get a little bit of nothing." But now that prices have improved Davis has returned to scrapping. The day I interviewed him, was his first day back at Kirschbaum-Krupp.
The price of scrap can fluctuate dramatically, and not just because of supply and demand. Bob Garino, director of commodities for the Institute of Scrap Recycling Industries, says that speculation also drives metal prices.
"Speculators, at times, have an undue influence on prices in the short term, both on the upside as buyers and on the downside as sellers."
Because of that, scrapping can be a guessing game.
To get a feel for where prices are headed, scrappers will call a scrap yard and simply ask the price of metal on that particular day. That's just as well, because even the "experts" have trouble reliably gauging market trends.
"Because of unforeseen events long-term forecasts, analysis frequently don't bear fruit and need to be revised on a regular basis," says Daniel Edelstein, a copper commodity specialist with the U.S. Geological Survey.
The fickle market makes scrap an uncertain business for the yard owners, too.
Within walking distance of Kirschbaum-Krupp there are the two other scrap yards and the experienced scrapper knows to check prices at each before selling.
A year ago when scrap metal prices were at an extreme low, Kirschbaum-Krupp's owner Dusty Gibbs says the company couldn't pay its electric bill the market was so bad.
Nobody was buying metal, therefore the prices weren't worth a scrapper's effort, "They just sat on their material," recalls Gibbs. "Why would they bring anything in?"
Stories from the MPR Archives:
December 23, 2009
One hospitalized, two arrested when copper theft goes awry
May 20, 2007
High scrap prices are a mixed blessing
Carrie Newhouse shared some great perspective recently on the short sale mess in the Twin Cities housing market. So when the feds unveiled new mortgage relief with sweeteners for short sales and second lien holders, we asked Newhouse, a source in MPR's Public Insight Network, to take a deeper look.
Her read on the newest plan: Might help some, but it's "false hope" for many.
The newest changes to the Home Affordable Modification Program (HAMP) should cut some temporary slack to unemployed homeowners in the hardest situations and encourage some mortgage write-downs.
The private sector and the feds would share the costs.
Maybe the most intriguing idea: boosting payoffs to second mortgage holders to get short sales moving. That's been a growing concern in The Cities.
In short sales, the homeowner owes more on the house than he'll get from the sale. The bank, which likely ends up losing money on the deal, must sign off. That creates a tough situation with lenders wanting to protect their financial interests and Realtors, sellers and potential buyers frustrated by an approval process that can drag on for months.
It's hard enough doing the deals with one mortgage holder -- even more complicated when there are other lenders with a financial claim to the house.
Boosting the payoffs may make short sales more attractive to the mortgage companies, said Newhouse a Twin Cities Realtor who writes the Helping People out of Foreclosure blog and has a lot of experience working with short sales.
Homeowners, she added, may also benefit from doubling the relocation stipend for those who are able to sell their troubled home without going into foreclosure.
But while she sees some potential upside in those efforts, Newhouse's practical nature tells her not to expect much.
"My experience is that these have been guidelines only," she said of the past efforts to help homeowners. "There are no real teeth."
Prior changes to the mortgage relief program were also intended to speed up troubled loan clean up but didn't make a big difference, she added.
"What makes these revisions different? All of the mortgage help programs have been false hope for so many and help for so few. I believe these changes will be no exception."
Take a look at the plan and let me know if you think it will help or if you agree or disagree with Newhouse's take.
Post below or contact me directly.
I gave a heads-up to one struggling homeowner in our Network who might benefit and I'm hoping to share her story if she pursues the new aid.
"The majority of the people I see in trouble are there because of job loss/ change, medical problems or divorce," Newhouse added.
"And by not assisting short sales for every willing seller that doesn't qualify for a modification is just asking for longer-term problems than we have now. And we have long term problems already!"
BONUS INFO: The Minnesota Home Ownership Center today posted a fact sheet and other info on buying a short sale home.
But that life line is nearly at an end.
The credits are good on purchases made by April 30. In some cases, it works to have a binding contract in place by the end of April if the purchase is completed by the end of June. But the bottom line is we're nearly 30 days away from the end.
The credits and historically low interest rates have eased an otherwise miserable housing market the past year.
"When we lose those market boosters, what will happen," the research director for the Minneapolis Area Association of Realtors asked last month..
His answer? "Expect a second (smaller) dip in sales and prices."
That's what Realtors in MPR's Public Insight Network have been telling us the past few weeks. Assuming the credits aren't extended, the April 30 deadline will deliver a burst of buying in the next 30 days. What happens after that?
There are some positive signs. But this market and others will continue to struggle for years with people trying to sell homes that are worth less than they owe on the mortgage. That short sale mess could keep a damper on home values for years.
We know that. What we don't know is how much the federal credits have been propping up the home buying market the past year. We'll find out pretty soon.
Tell us what you think will happen to the Twin Cities housing market when the credits are done. Post something below or contact me directly.
Click on the map icons below to read what Minnesotans in our Network have been saying about the housing market around them. Then share your story.
Waiting for Joe Mauer's new Twins deal turned into a mini-drama the past few weeks. But there's another contract deadline looming that will really hit the Twin Cities hard if a deal doesn't get done.
Formal negotiations began last week between 12,000 area nurses and six hospital systems.
The current contract is set to expire at the end of May for nurses working at North Memorial, HealthEast, Allina, Methodist, Children's and Fairview. The union says it will vote May 19 to either ratify the new contract or authorize a strike.
Given the recession, the hobbled economy and the problems in health care funding generally, it's hard to imagine the nurses and hospitals not finding common ground.
We followed talks between Honeywell workers in the Twin Cities a few months ago where there was concern about a strike but workers ended up voting more than two to one for a new contract.
A nurses strike would be an earthquake in the Twin Cities. Staffing levels and pension fund contributions are likely to be the biggest issues, according to the nurses association.
So we're going to be following this issue pretty closely.
We got a heads-up on it from a nurse in MPR's Public Insight Network recently when we asked about her economic forecast for spring and she told us, "I am concerned I may have to go on strike in June."
If you're connected to nursing or hospitals -- nurse, doctor, administrator, patient -- tell us how you view the nursing contract talks and how a strike would affect you and the region. Post below or contact me directly.
This is the contract we all need to watch.
What do you do when you're a lender with a foreclosed property and you want the ex-homeowner out quickly and neatly? Pay them to leave sooner.
It's called "cash for keys." It's become a common practice in other parts of the country, and there's some evidence we're seeing more of it in the Twin Cities.
I'll say upfront I don't have a lot of detail but I'm interested in learning more. Jim Dooley, an Apple Valley real estate broker who's part of MPR's Public Insight Network, mentioned to us recently it's a growing trend here.
We asked around to find people with cash for keys experience in this market and were introduced to Twin Cities Realtor Pat Paulson. He says he's been involved with about 20 cash for keys situations over the past year and a half.
Cash for keys has been around for years, he says, and it's increased with the jump in foreclosures. "I would expect that it is growing in popularity since it is a good practice to safeguard and get access to the properties quicker." Paulson says he typically gets involved after the lender's taken title to the property.
Many REO (real estate owned) sellers assign properties to an agent right after sheriff sale, a few months before the end of the redemption period, when the owner still has rights to the property (MinnEcon note: redemption period is typically 6 months after the sheriff sale.)
With most of mine, the owner or tenant, if the property is occupied, knows that they will have to move soon. However, some tenants seem unaware.
(Following the redemption period), after I verify the occupancy, the seller decides on a strategy to have the property vacated. The first step is always to start the eviction process with a local attorney. They used to give the occupant 60 days to move, but have recently changed that to 90 days. After this, they often, but not always, instruct me to offer CFK (cash for keys).
The typical offering is $2,000 if the occupant moves out in 30 days. Specifically, they must have all their personal property out except in-use working appliances, and the property broom-swept clean.
Upon inspection, I give them a check for the keys then immediately have the locks changed.
Paulson says this works out well for many occupants, although, "it is always a challenge for them because they must find a new home before they receive the money. I have had new landlords call me to confirm that a prospective tenant will be receiving this money."
Another cash for keys perspective comes from Twin Cities foreclosure specialist Steele V. Propp.
Normally, he says, the cash deal is offered around the end of the redemption period. The lender or management company doesn't have title to the property until the redemption period ends "and in most instances they would rather see the property occupied than vacated."
Currently I have a couple of properties in redemption that are occupied and I have been told to not bother the occupants. I am simply to check on the houses on a weekly basis to make sure they are not vacated and the house is not unsecure (or worse yet, the heat is off now that it is winter).
If a property can be shown to be "abandoned" the redemption period can be reduced from the 6 months to 5 weeks. That process does take some time as it is a legal one. Notices are posted on the property with a hearing date and the owner/occupant is asked to attend if someone is still actually living there. If no one shows at the hearing the judge will usually start the shortened 5 week redemption.
As to cash for keys amounts, the companies I work with typically offer a sliding scale. The faster vacated, the more they offer. $1,500 to $2,000 is fairly average if vacated in two weeks. (Although I had a duplex this summer that each of the three tenants were given $750.)
We have an agreement signed with a specific date and that the property be left in "broom clean" condition. I inspect the property and if terms and conditions are met, hand them a check.
I have a few more feelers out on this and I'll write another post if I get something new.
If you have experience in Minnesota with cash for keys -- lender, home owner, real estate agent -- please post below or contact me directly and let me know your experience. Is this a good, civil way to avoid a messy eviction battle and keep a house from being trashed? Or is it a deal that foreclosed owners take too quickly?
All thoughts welcome.
Here's a quick read from the Minnesota Attorney General's Office for people facing foreclosure.
A 2009 law allows homeowners to postpone the sheriff's sale for five months.
Got a perspective to share on Minnesota housing markets? Post below or contact me directly.
Click on the map icons below to see what others in our Network have said about the housing market the past year. Then add your story.
Broadband access is now a legal right in Finland. In Minnesota, not so much.
A recent state report urged Minnesota to do more to get citizens online at high speed. While the report found most citizens have some access to broadband, many aren't bringing into their homes, especially in rural Minnesota.
We asked Minnesotans in MPR's Public Insight Network to tell us a little about their Web connections and why it was important. We were surprised to hear stories of people in greater Minnesota still dealing with dial-up.
Others told us lack of competition was a problem in some areas of the state, keeping the price unaffordable. Solutions? Some said the government needs to do something. Others, tired of government spending, said that was the last thing needed.
There wasn't much argument, however, about the need.
"Access to high speed internet is as important to me as access to a railroad was to my great-grandparents when they homesteaded here," said Brent Olson of Ortonville, a writer and Big Stone County commissioner. Service, he added, is "very spotty, depending on which phone or cable provider you have."
Mitch Jasper, the mayor of Jackson, said he and others are pulling together a group of towns in southwestern Minnesota "to band (no pun intended) together to apply for monies through the stimulus.This plan is to put fiber optics in every home and every business."
3/8 UPDATE: Jackson and those Minnesota towns scored nearly $13 million in federal stimulus money for their broadband project.
Click on the map icons below to see what others in our Network had to say.
Click the little box on the upper right hand corner of the map to see it in full screen.
Lois Garbisch, a home manager from Cook, laid out the frustrations of a slow connection in a fast world.
I have dial up with an accelerator. Dial up would be intolerable without that. In town and at the lake there is Quest DSL, which I've heard is quite fast. But for the rest of us, our choices are only satellite, which is expensive and not all that fast, and by radio signal, which has an expensive set up charge. I'm only a mile from the edge of town but Qwest won't bring broadband to our road.
That's an issue MPR's Dan Olson noted in his recent report. Money is a big factor determining how soon more Minnesotans will have faster Internet speeds.
Companies selling Internet services prefer to have a batch of subscribers ready to sign up before they start installing the infrastructure.
The state task force urged that Minnesota become one of the national leaders in broadband access and use by 2015. They didn't say how to pay for it but called on the public and private sectors to work together.
It wasn't that long ago that broadband, high speed Web service was a luxury. Not any more.
"High speed internet service permits more working at home which is good for the environment and increases an individuals productivity," said Doreen Mahoney, a Network source and real estate lien search supervisor in Nisswa.
For her, that means, "I will be able to provide care to my elderly parent at home which also avoids senior care expenses and improves my mothers quality of life and keeps her healthier and happier."
We posted recently that while the Twin Cities housing climate was improving, the market wouldn't really recover until the short sale problem gets worked out.
New detailed reporting released today on short sales by the Minneapolis Area Association of Realtors shows there's still a long way to go.
In short sales, the homeowner owes more on the house than he'll get from the sale. The bank, which likely ends up losing money on the deal, must sign off on the sale. That creates a tough situation with banks wanting to protect their financial interests and Realtors, sellers and potential buyers frustrated by an approval process that can drag on for months.
It's a drag on the rest of the business and on home prices generally. The Minneapolis Realtors report today showed a stubbornly high inventory of short sale homes -- about 4,300 in the Twin Cities, only about five percent less than October last year and still way up from 2007.
New listings of short sale homes in October were almost exact to October 2008.
On the positive side, lender owned homes in foreclosure are still selling at a good clip with less than a month and a half of inventory. Compare that though to short sales, where there's a 13 months supply, according to the most recent data.
Markets recover. But it's going to take more than an invisible hand to fix the short sale mess, which right now could be with us until 2011.
BONUS INFO: Here's the MPR story from today on the Realtors' overall market analysis.
Got a perspective to share on short sales and the housing market in the Twin Cities or across Minnesota? Post below or contact me directly.
We'll be taking snapshots in the coming weeks of seasonal employment trends around Minnesota. We're used to seeing lots of temporary jobs available this time of year through the winter holidays.
11/18 UPDATE: Here's a story from my MPR colleague Annie Baxter on the temp market and its mixed blessing for workers.
We know this could be a very tough season for retailers and other businesses that depend on consumers and companies spending.
We checked in first with Accountemps and OfficeTeam in Minneapolis. Those are units of the staffing and temp employment giant Robert Half International that focus on back-office and administrative help for businesses. Susan Thomas, Minneapolis branch manager, wrote:
Temporary hiring for administrative staff has been increasing as morale has been an issue.Nationally, job openings so far this fall remain at record lows.
Companies want to hire to cover staff on vacations as they too are running lean, and don't want to deny vacations and damage morale... they do not want to miss any sales or fail to take advantage of opportunities.
We are also seeing an uptick as it relates to the cold and flu season. This has always been a seasonal need, as people inevitably come down with winter ailments, and companies need people to fill in.
Tax hiring has always been strong seasonally, but this year has even more interest due to how lean CPA firms have had to operate.
A survey by the National Federation of Independent Business found one nine percent of its members expecting to create new jobs in the next few months.
Are you doing any temporary hiring through the winter holidays? Or are you searching for a temp job? Post below or contact me directly and tell me what you're seeing.
We've hit the bottom of the spending decline, say hopeful Minnesota retailers. But even the most upbeat merchants know it'll be a slow road back.
The worst recession in decades is driving people to save and not spend. The latest Federal Reserve data show big drops in consumer debt during the summer and over the past year. It's unclear if it's a permanent shift. But it will still be hard this holiday season to convince consumers to spend like the recession's over.
That includes Anne Holmboe, a source in MPR's Public Insight Network, who told us recently, "Our current goal is to get our debt paid off by the end of the year so we can start to save again next year."
Holmboe, lives in Minneapolis with her husband and feels as though they are just getting by. Holmboe works as a nanny, but has taken a part-time job to supplement her income. Her husband has done the same. The extra money is going for one thing: Paying off the credit card bills.
Greg Boettner of Scandia says he's stopped impulse buying and researches everything now online before buying. He, too, has paid down a considerable credit card debt.
Losses in the stock market ate into Boettner's retirement savings. So the 59-year-old is working on one thing -- preparing for retirement.
"My new motto is to save first and spend only when I have to, only on items I need," Boettner, a network source, said.
This more frugal approach is the reality facing retailers, says Bruce "Buzz" Anderson, president of the Minnesota Retailers Association.
"Both you and I have never gone through a downturn this steep," Anderson says. "And so people are still really hanging on to their dollars right now. For how long? We just don't know that."
Minnesota retailers, he adds, are seeing consumers "break loose a little bit" and spend some money. And stores are getting aggressive to lure shoppers in with sales and with marketing.
Anderson also thinks people like Holmboe and Boettner -- the ones who are saving and paying down on debt -- will be good for retailers in the long run. The eventual gain in financial security will eventually translate into a desire to spend again.
"It's just going to have to take some time," he said.
In early September we brought together nine Minnesota small business people from MPR's Public Insight Network to talk about health care, finding credit and the pains and passions of running your own shop in this economy.
My colleague Mike Caputo took it another step, pulling together a face-to-face forum on small business issues. The result was a fine discussion you can hear today at noon on MPR's Midday program.
Below is the online forum. Listen in today at noon.
If you have a view on small business or want us at MinnEcon to look deeper at an issue, contact me.
Realtors have an obvious interest in talking about how now is the right time to buy a house. Boom or bust markets, it's always a good time to buy!
Today, though, the St. Paul Area Association of Realtors came out with hard data that seem to show signs of a genuine upswing in the Twin Cities area housing market, driven by low rates and the $8,000 first time homebuyer tax credit.
The group said the inventory of homes for sale has fallen over the past month and fallen significantly from last year. Also, there were 7,150 deals closed for homes in 09 compared to 6,668 during the first quarter of 08.
Not everything is swell. The survey noted that the median sales price in the Twin Cites metro area continues to fall, or, as they put it, "continues to search for its low point."
The group put the median sales price for a single-family, residential property in March at $154,125, 23 percent down from a year ago, when it was $200,000.
For the first time since July of last year the median sales price increased on a month-over-month basis by 2.75 percent. The median sales price one month ago was $150,000.
Got a story about the housing market or any other economic story in Minnesota? Tell us what you know.
"I am writing because we have hundreds of people in need of work."
That sentence threw me. Yes, there's record high unemployment in Minnesota. But the person who wrote that sentence heads an employment staffing firm.
Sharon Murphy owns ADD ON Staffing Solutions in the Twin Cities. She's part of our Public Insight Network and she's expert at connecting workers to the companies who need them. She describes herself as "usually the most upbeat person in the world."
But these are the hardest times in decades. She gave us a view this week of the struggling jobs market through her eyes:
Here is what we see everyday...our customers are cutting back on all temporary staff, cutting their permanent staff wages and hours, forcing them to take time off without pay. I truly believe we have not seen the worst of things for folks yet.
I just took a phone call from a manufacturing facility in Woodbury, our client....they have laid off their entire second shift, running a skeletal crew for 1st shift and they don't see any hiring until July....what are people to do? We simply cannot manufacture jobs....people are not able to sustain themselves on unemployment...this is bleak!
Frankly, I'm not sure how long I can sustain my company with so few people actually on my payroll now. The small business owner is not eligible for a bailout...something that can sustain us until we can get through this dark time.
Data back up Murphy's observations. The chart attached to this post shows a stunning gap between the declining number of job vacancies in Minnesota and the rising number of unemployed in Minnesota at the end of 2008.
Murphy says she and her staff take their clients' unemployment personally.
They confide in us, share their dreams with us, refer their family members to us. We care about each and every employee. They call every other day checking in for work. It breaks my heart that we are unable to find jobs....these associates are desperate, they have bills, mortgages, children....
We've had readers email MPR and tell us that we're too negative on the economy, that more than 90 percent of the workforce still have jobs. Point taken.
Still, it's hard to ignore the observations of someone like Sharon Murphy who comes at it from a vantage point most of us don't see.
Below, we've mapped some other recent voices on jobs from our Public Insight Network. Take a look, then add your story.
The housing price slide is slowing these days, but it's still a slide. That's the bottom line in today's data from widely watched S&P/Case-Shiller Home Price Indices.
Twin Cities housing prices in February remained about 20 percent down from February last year, the data show. That's slightly worse than the 18.6 percent average drop among the 20 metro markets tracked by the indices.
So if you're looking for some glimmers in this report: "For the first time in 16 months, however, the annual decline of the 10-City and 20-City composites did not set a new record."
Housing values are crucial for lots of reasons. For many people it is the single most valuable asset they'll ever own. The run-up in value during the early part of the decade offered people an inflated sense of their personal wealth.
Now, wealth people once counted on for vacations, retirement, financing college for their children and other goals is gone, at least in the short term.
Leslie Frost got one of our MPR News queries recently asking about her economic situation. She wanted to talk instead about the economic pain she witnesses daily at Families Moving Forward, a small nonprofit family homeless shelter she runs in the Twin Cities.
Frost, one of our Public Insight Network sources, says circumstances for homeless families are the worst she's seen in 17 years of work. She wrote:
Someone asked me the other day if the families that we are seeing at Families Moving Forward are different now than they have been in the past. The answer is no, they're the same, but there are so many more of them...We get 300 calls/month now. Two years ago we got 50 calls/month.
The same reasons apply now: lost job, ran out of money, couch-hopped for awhile, wore out our welcome at all those places, finally ran out of options, called for shelter, But now, there are new reasons: landlord ran out of money, quit paying the water bill, couch-hopped, applied to new landlord, got turned down because current landlord isn't answering his phone to provide a rental reference.
Also, rented a place for a year, paid damage deposit, things started running downhill, heat got turned off, called City for help, Housing Inspector came out, verified no heat, could not get in touch with landlord, came back and placarded the building as uninhabitable, told us we had three days to leave. In neither case, did the family get back the damage deposit or the rent that was unearned. The same thing happens to families whose utilities stay on, but get evicted by the sheriff, on behalf of the bank, in foreclosure.
On a typical night in Minnesota, about 600 children are homeless, according to data collected by the St. Paul-based Wilder Foundation. The group's last survey came in 2006, when times were relatively good. This year's survey is likely to draw a bleaker picture.
Got a story about the economy around you? Share it with MPR News. We're mapping the responses in hopes of getting a broader picture of economic life in Minnesota. Below are some stories of the current job climate.
With job security, low debt and a bright economic outlook, Adam Leistico sees this as a great time to buy a house. The potential boost from the $8,000 federal home buyer credit makes it even more alluring.
But the opportunities he's seeing also make him an eyewitness to the challenges of trying to buy in this market. Leistico, a source in our Public Insight Network, wrote:
We started looking for houses in St Paul in late January of '09, and we found a place that we immediately fell in love with for a price that was too good to pass up.
Sadly, it is a short sale, and we have been on the line for over two months now waiting to hear back from the bank on our offer.
In short sale situations, the homeowner owes more on the house than he'll get from the sale. The bank, which likely ends up losing money on the deal, must sign off on the sale.
That's created a sticky situation in this market and others with banks wanting to protect their financial interests in a money losing situation and Realtors and potential home buyers frustrated by the pace of the approval process.
The banks' concern is understandable. Sale prices for "lender mediated" homes, including short sales and foreclosures, fell dramatically over the past year in the Twin Cities. There's a yawning gap now between the median selling price of "lender mediated" homes compared to traditional home sales, according to the Minneapolis Area Association of Realtors.
The stock of "lender mediated" housing is starting to fall thanks largely to buyer demand. That, of course, can create its own set of hassles.
It is a very good market for buyers out there, but it is also extremely frustrating. We have made offers on many places, all of them in multiple-bid situations that don't turn out in our favor.
We have taken tours of even more places that are sold two days after they are listed. It is exciting, but amazingly taxing mentally, especially for folks like us who are trying to find a nice place to settle down.
If you're connected to the current housing market -- banker, Realtor, homebuyer, seller, observer -- I'd love to hear from you about what you're seeing.
Click here and share an insight about the current market.
Also, check out the map below for recent responses from our Public Insight Network on housing issues.
My post earlier today on putting off education to pay the bills got me thinking about an experiment Normandale Community College in Bloomington tried this term -- free tuition in selected classes for people who were unemployed.
The school's offer made a splash late last year along with Anoka-Ramsey Community College's plan to provide classes at half price for those who qualified for unemployment.
With the semester winding down, I checked with Normandale to see how it went.
The school ended up with a lot more demand than expected for the free classes -- 269 students signed up. Officials had expected fewer than 100.
It didn't cost Normandale because the classes offered were ones that typically wouldn't have been filled anyway. Also, students who took the free classes also took 80 classes at Normandale where tuition was required, a spokeswoman said.
Are free or discounted class for the jobless a trend?
It's been happening in communities around the country this spring. A Pennsylvania senator recently unveiled a plan where the federal government would reimburse community colleges that offer free tuition to workers who have lost their jobs.
Locally, it's not clear how long the free/discounted classes will continue.
Anoka-Ramsey plans to continue its half-price offer through the summer term and says more than 200 people took its offer this semester.
Normandale won't offer the free classes in the summer because they're expected to be full. A decision about continuing the offer in the fall could come later this month.
Also, check out the map below for recent stories from our audience about the job climate in Minnesota, then share your story.
No one's ready to declare a turnaround in Minnesota's unemployment. The jobless rate remains at 8.2 percent, the highest in more than 25 years. We won't get the next official report for two weeks. I haven't heard anyone predicting a drop.
But if you're searching for shiny nuggets in the gloom, here's one today: A monthly online employment survey conducted by Monster Worldwide showed a Twin Cities uptick in April, the first time in a year where there wasn't a decline.
Monster builds an employment index for 28 U.S. cities, including Minneapolis. It's meant to be a "a snapshot of employer online recruitment activity."
The Minneapolis index fell nearly 50 percent from April 2008 to March 2009 with declines every month, until April. It might be a seasonal improvement. But, hey, it's the right direction. Growth came in sectors important to Minnesota: Construction, transportation, business and financial operations.
Monster's U.S. index also improved. "April's rise in online recruitment activity was in line with seasonal expectations and suggests that the pace of slowdown in the U.S. labor market is moderating," Monster senior vp Jesse Harriott said in a prepared statement.
Take a look at the data and let me know what you think. We're also constantly beating the shrubs for stories of the job outlook around Minnesota. Below are some recent responses we've mapped. Take a look, then add your story.
We've seen signs the past couple months the Twin Cities housing market is starting to drag itself back to its feet. But new data released today from the respected S&P/Case-Shiller Home Price Indices suggests it's no time for high-fives. Home values here are still on the slide.
The Cities showed a record monthly decline of 6.1% in March -- the largest monthly drop of any metro area in the history of the indices. The index is down nearly 25 percent from a year ago.
Looking at the 20 U.S. cities it charts, S&P concludes there's no evidence yet that a recovery in home prices has begun.
So what's happening?
It's possible prices are bottoming out and it just hasn't showed up yet in the numbers. There's been a lot of "lender mediated" housing sold in the Twin Cities, driving down over all market values. That inventory is falling now. As supply and demand find a balance again, that'll be good news for prices.
But as my colleague Mike Caputo pointed out recently, we're also in a one-and-done market right now -- there's high demand for houses below $200,000, so the first-time homeowner market is solid. Current homeowners, however, are not interested in selling and buying something more expensive.
Bottom line: We're seeing a lot of activity in selected parts of the Twin Cities housing market. But that's not going to translate into a recovery in median home prices any time soon.
It was only a few years ago, the Army was praising a Minnesota built cannon as a weapon of the future and almost exactly a year since the prototype went on display with great fanfare in Washington, D.C.
Top Army and Defense Department officials the past few weeks have said the government plans to stop development of a group of new manned ground vehicles, including the cannon.
For the BAE Systems plant in Fridley, that's potential trouble. About 400 of the roughly 1,500 jobs at the plant are tied to the cannon.
Of course, no weapon is completely dead until it's cut from congressional appropriations bills. Sen. James Inhofe of Oklahoma (where a plant to build the cannon was expected) has vowed to fight the cuts.
BAE spokesman Ryan May says it too early to judge the potential impact on the Fridley plant. "In any event, the Department of Defense (including the U.S. Army) is our customer. BAE Systems will react to and support any program changes established by the Department."
May noted that when the Crusader army vehicle was killed earlier in the decade, about 60 employees out of 600 were cut. The company, however, almost immediately landed a contract for the non-line-of-sight cannon.
We'll continue to keep tabs on this story, whatever happens.
We got interested in it, by the way, after a citizen source in our Public Insight Network dropped us a line with concern about cuts in the Defense Department proposed budget and what it meant for the cannon and the plant.
You can help us report on Minnesota's economy, too. Click here and tell us a story about what the economy's like around you.
Recessions can trigger desperate behavior. But are otherwise relatively well-off people starting to use the hard times simply to score free food?
He wrote to tell us that besides his usual clients in need -- fixed-income elderly people, the homeless, single parents with children -- he's starting to see a new group trying to tap the food shelf:
The newest group of people using our services are people with and without school age children, that are employed full time and own homes, cars and cabins.
This group is being shrewd/creative, etc. to keep what they have and or get what they want. Some of this group will lie, cheat and steal (so to speak) to get free food.
We have a challenge being sure we select those that have nothing or are the working poor... verses those that are experiencing hardship because they seem unwilling to prioritize their needs over their wants.
I left messages with Gmitter this morning. I want to hear more about this and the challenges he's facing and I'll try to post more on it later today.
I may be naive but this startles me. I can understand desperately poor people lying to get what they need to survive. But we're talking about people who could afford food but are just gaming the system?
If anyone's got any experience with seeing this kind of behavior, please drop a line or click here and share a story about it.
Posted at 12:22 AM on June 19, 2009
by Paul Tosto
Filed under: Twin Cities metro
The Twin Cities economy does not look great compared to many of the nation's metro areas, a newly released Brookings Insitution analysis shows.
Brookings compared unemployment, wages housing prices and other economic indicators for the first quarter of 2009 and put the Twin Cities among the second weakest group of metro area economies. Here's all the Twin Cities data used.
I try not make a big deal about these kinds of comparisons. They're interesting but, like those investment fund ads, it's important to note that past performance is not necessarily an indicator of future performance.
I'm much more interested in hearing and reading what you have to say about the economy around you. Tell us how things are going.
Also, check out the maps below to see what people in our Public Insight Network have told us recently about jobs, money and housing issues.
Not that anyone who bought a house from, say, 1998 to 2006 in the Twin Cities needs reminding, but a new Harvard University report informs us that inflation adjusted home values in our metro area have returned to 1990s levels.
Check out the map on .pdf page 3. Looks to me from the map that the Twin Cities is among the hardest hit of the nation's major metro market. If anyone sees any other interesting facts in the Harvard report, please post below and let me know.
No doubt it's been grim here, especially during the past year.
But on my street, anyway, I'm seeing some signs things are improving.
There were four or five houses within two blocks that either had those yellow foreclosure/auction signs in the window or were clearly uninhabited during the fall and winter. All but one have been purchased. People are planting flowers and cutting lawns. Some have little kids. Great news for my neighborhood.
The recession's put hundreds of accountants and other back office people on the street in the Twin Cities. Many are seeking work through temp agencies. Now the price for that talent is falling.
The St. Paul office of ACCOUNTEMPS emailed local employers recently offering deep discounts -- as much as 30 percent -- to employers looking to fill back office jobs. Examples:
Staff Accountant: $ 36.64, now starting at $25.24
Data Entry - $20.76, now $14.45
College Student (Accounting Major)/Summer Help-- was $21.53, now starting at $15.93
The pitch to employers acknowledged the hard times. "Staff overworked due to RIF? Retain your most valuable employees by keeping morale high. Let our trained and proven professionals pick up the extra load."
Laura Goerges, staffing manager for ACCOUNTEMPS in St. Paul, said the discounting is a response to the rising supply of job candidates.
"The slash in prices is just following market value for positions in today's economy," says Goerges.
"This is something my team came up with to educate our clients that the market is changing and we have more options with very qualified candidates willing to work for less as they can't find work easily," she says.
While Minnesota's jobless pain is showing signs of easing, professional and business services have taken a huge hit, losing 30,600 jobs over the past year, nearly 10 percent of that workforce.
The economy will recover eventually. But how many of those lost jobs will come back?
We're on the lookout for interesting or offbeat Minnesota economic trends. What are you seeing on the economy that's a little different that's telling you things are improving or worsening?
Also, check some of the responses below we've received recently from Public Insight Network members on job issues.
Life is a lot more uncertain today for hundreds of employees at a Fridley defense plant.
The plant's owner has issued an immediate "stop work" order on a cannon once thought to be a weapon of the future.
We posted a few weeks ago that about 400 jobs at the BAE Systems plant in Fridley were at risk because of the Army's decision to kill the Non-Line-of-Sight Cannon. My colleague Mike Caputo followed up with a radio story for MPR News.
Last week the Defense Department made its intentions official.
That led to a new memo from BAE's U.S. Combat Systems division ordering a stop to all work connected to the Army's massive Future Combat Systems project, including the cannon.
The memo says about 1,000 people, including full-time employees, contractors, and consultants, have been ordered to stop working. It's not clear, however, how many are Minnesota-based.
We expect to get specific information by the end of the day today on the practical effects of workers and contractors tied to the Fridley plant. We'll pass it on as soon as we know.
If you're connected at all to the plant, please email me and let me know what you're hearing.
As we've pointed before, no military project is completely dead until Congress eliminates its funding. Even then, things can change. The Defense Department release notes it's "working closely with the Congress to determine the appropriate path forward" for the cannon.
More than 300 workers at a Fridley defense plant are now on paid leave following a "stop work" order on an Army cannon once viewed as a weapon of the future.
Defense contractor BAE Systems this afternoon confirmed that about 311 workers are on paid leave as the company sorts through the Defense Department's decision to stop the "manned vehicle program," including the Fridley-built Non-Line-of-Sight Cannon.
A year ago, Army officials were praising the cannon, showing off the Minnesota-built prototype on the National Mall. But there were strong indications this spring the Defense Department planned to stop funding the "manned vehicle program."
Last week, the department made it official. That led to the stop work order.
The 311 affected employees are part of a workforce of 1,450 at the Fridley plant. They were put on paid leave starting today for "an undefined duration," said BAE Systems spokesman Ryan May.
"The full duration will be determined once we get the final termination notice from our customer," which is expected within the next two weeks, he said.
About 308 workers at a BAE Systems plant in Santa Clara, California have also been put on paid leave.
It's not known what will happen to the workers placed on leave. Said May:
Over the next several months, there may be additional impact on our workforce, but it is too early to speculate on exactly what those outcomes will be. We are doing all we can as a company to retain our talented employees.
We got interested in the story, by the way, after a citizen source in our Public Insight Network dropped us a line with concern about cuts in the Defense Department proposed budget and what it meant for the cannon and the plant.
If you're connected at all to the plant, please email me and let me know what you're hearing.
Hennepin County asked its workers this spring to cut hours voluntarily and take less pay to help close a budget gap. Looks like that's paid off.
County officials say about 3,900 workers, about half its workforce, agreed to take Special Leave Without Pay through the end of the year, generating roughly $4 million in savings. That's about 105,000 hours off the books between July and December.
Together with some other scheduled unpaid leave, the county met its goal of $4.5 million in savings without ordering hourly cuts.
We've been watching the county's effort as part of a wider discussion about cutting expenses voluntarily at work. Cynics might scoff but it strikes me as a noble effort.
The county expects to continue the voluntary hour cuts. With future budget struggles looming, it's not clear that will be enough to stop mandatory reductions. But so far...
Check out the map below for insights from people about the current job market. Then tell us what you're seeing or if you know of a situation where people are voluntarily cutting costs or take less pay to keep jobs -- and what response you've received from management.
Melissa Hill's been unemployed since February. But she has a plan to change that: Run for Minneapolis City Council.
A source in our Public Insight Network, Hill wrote us recently:
I'm holding steady with my unemployment checks and some savings but the job prospects have not been that great in my line of work so as each month goes by, it is getting harder to survive. Therefore, I'm actually thinking about running for city council this year in Minneapolis. If I can't find a job, maybe I can still be elected to one ;-)
So, yeah, I emailed her back to see if she was running. Answer: Yes.
I don't know her politics or her chances. It's the idea of being out of work and running for office that intrigues me. With new data today showing the national unemployment rate still near 10 percent, the jobless are something of a votiing bloc.
I'd love to hear from people about this. Can't really find anything on the subject beyond a blogger urging laid off Florida teachers to run for office. I'm guessing a lot of jobless people aren't running for or winning public office.
Hill, in her early 30s, says because she's unemployed, "I'm not that out-of-touch with what a lot of people and families are going through in this city. I have to be very careful about my own personal spending and want to make sure the city is also very careful about it's spending..."
She was laid off from her job as a data management specialist during the winter. She told MPR news reporter Annie Baxter in February that she was not panicked about her job prospects and might consider a career shift.
This week, candidate Hill said: "My biggest challenge will be my lack of personal funds or the ability to put my own money into the race."
UPDATE: Forgot to mention, Minneapolis city council members earn $76,482 this year.
Check out the map below for recent responses from our Public Insight Network on the jobs landscape in Minnesota, then share your own story.
Twin Cities home prices are still down double digits from last year but data today from Twin Cities Realtors suggest the level of decline is easing.
According to the St. Paul Association of Realtors:
The median price reported at the end of the first six months (of 2009) was $160,000 compared to $203,000 after the first six months of 2008, a decline of 21.18 percent.
However, for the month of June 09 the median sales price decreased only 15.37 percent compared to 08. The median sales price for June 09 was $173,500 compared to $205,000 in June 08.
The June 09 median sales price did show an increase of 5.15 percent from the previous month.
The group also noted that the market has about a five month inventory of housing for sale, down from 8.8 months a year ago, a sign that the supply and demand for housing may be finding its balance.
As we're reported before, Realtors tend to be a perpetually upbeat group with an obvious interest in talking about how now is the right time to buy a house. And there's still enough grim news about this market to make you skeptical about recovery discussions.
Still, baby steps in the right direction.
We've been keeping tabs on the fate of an Army project crucial to hundreds of jobs at a Fridley plant. The latest news isn't great.
Boeing Co., the main contractor in the development of a new generation of manned ground vehicles for the Army, said Monday it got an official cancellation order from the Pentagon.
That's bad news for partners connected to the work, including a BAE Systems plant in Fridley, which has been designing and developing one of those vehicles, a new Non-Line-of-Sight Cannon once thought to be a weapon of the future.
A few weeks ago, 311 employees who work on the cannon at the Fridley plant were put on paid leave for an "undefined duration" after BAE issued a "stop work" order on the cannon as the Army signaled a termination order was coming.
A source in our Public Insight Network tells us a top BAE official will be in town this week to tour the plant and answer employee questions. The cannon's fate will likely be tops on the list.
Pentagon officials want to cancel the vehicle program because they say the designs don't work with realities of what the Army's encountered fighting in Iraq and Afghanistan.
Perhaps one bright spot is Boeing's statement today that it's "encouraged by the Army's commitment to preserve key technologies and leverage the significant design and development work already accomplished."
And, of course, no weapons system is completely dead until Congress kills the funding. Still, it seems like the end game is near.
High end housing isn't selling in the Twin Cities. Is that just a hassle or is it creating a new kind of upscale urban blight?
In ordinary times, no one would cry over empty McMansions. But Twin Cities real estate appraiser Julie Schwartz says it's become a serious concern.
A source in our Public Insight Network, Julie tells us:
In 25 years of being in the real estate industry, I have never encountered blight in mid- to upper bracket neighborhoods before. We are seeing the next group of foreclosures in this mid- to upper-bracket.
What I see missing from most media coverage of the housing and credit crisis is the changing landscape of our communities. On the road I live, which is median to upper bracket housing, there is one house that is very blighted, sitting there with a project half done, including an addition without siding, and a roof with missing shingles.
There are streets which are partially developed, and which appear strange due to knowing no new construction will occur for sometime, as the prices of the used housing is lower than the construction cost new, less accrued depreciation.
She makes a couple of other good points. The summer months have brought into clear view the "lack of upkeep" that might have been hidden in the winter and spring.
Also, she says, local governments are having to pick up the pieces of failed developments and she sees the $8,000 credit the Feds are offering as an incentive to buy homes as "pathetic, at best."
I definitely want to explore this and may ask Julie for a tour. Do you see what Julie's seeing? Drop me a line or post below.
Better yet, send me a photo of upscale housing blight with some description of where it is and what's happening. Use this form.
Check out the map below to read what people in our network are telling us about housing markets in Minnesota.
Workers at the BAE Systems plant in Fridley today are facing the inevitable fallout from a Pentagon decision to end a crucial Army contract: Buyouts are being offered, layoffs are coming.
Some 311 Fridley plant workers were placed on paid leave a few weeks ago following the Defense Department's decision to stop the "manned vehicle program," including the Fridley designed and built Non-Line-of-Sight Cannon, once thought to be a battlefield weapon of the future.
A top BAE executive is expected to address employees this afternoon. Employees are already being told of a voluntary buy out program they must apply for by July 31.
It's not clear how many buyouts BAE is seeking. The plant's total workforce is about 1,450. Several other BAE plants around the country are also affected, including one in Santa Clara, Calif., where another 300 workers are on paid leave.
In a list of Frequently Asked Questions, the company is telling employees that it anticipates permanent layoffs.
We'll update the post as more information becomes available.
Our interest in this story came from a citizen source in our Public Insight Network who dropped us a line with concern about the plant and the cannon's future and who's continued to help us understand the fallout.
Layoffs became official today at the BAE Systems plant in Fridley -- 314 is the official number cut.
The layoffs unveiled today are the inevitable fallout from a Pentagon decision earlier this year to end a crucial Army contract to build the Non-Line-of-Sight Cannon, a weapon designed and built at Fridley and once thought to be a battlefield weapon of the future.
We've been keeping close tabs on the project's fate and its potential effects on the Fridley workforce after a source in MPR's Public Insight Network alerted us to what was happening. About a month ago, more than 300 workers were placed on paid leave.
It's not clear if 314 is the final layoff number. Earlier this year, BAE said about 400 of the roughly 1,500 jobs at the plant were tied to the cannon.
Here's the official announcement from BAE late this afternoon:
BAE Systems has announced an involuntary layoff of approximately 314 employees at its Minneapolis facility. These layoffs come as a result of the Partial Termination Notice and Stop Work Orders the company received for its FCS manned ground vehicle program contracts.
BAE Systems deeply regrets having to reduce its workforce, but given circumstances beyond our control, we are left with no other choice. The company will continue to aggressively pursue future opportunities in order to maintain market share.
UPDATE: Regarding possible future layoffs, a BAE spokeswoman tells us:
At this point, we do not anticipate additional reductions. However, there may be unforeseen circumstances in the future that would require us to reevaluate this issue.
We will continue to monitor our business situation and work with customers to assure that our business and staffing plans are aligned to meet the customer's requirements and our future strategic objectives.
Pretty much anything that's built requires concrete. So we mark it as a positive economic sign when one of MPR's Public Insight Network sources tells us he's in the concrete business and is cautiously optimistic about the future.
Mike Berg of St. Paul, wrote recently to tell us that he'd been hired this summer as an engineer designing concrete mixtures for a Minnesota concrete business.
We count that as good news because this recession has been a struggle for Minnesota engineers and architects. Berg, 36, has seen it. He tells us:
A year ago, I was out of work, spending 40+ hours a week searching for a job, fruitlessly. With a young son and my wife at less than 40 hours a week of work, it was difficult to keep a positive attitude for the six months I was out of work.
By February, I had finally found a job and was looking forward to working again. While the job excited me, it was not in civil design, where I'd been for two years.
Just as I was getting acclimated, I began receiving calls from a recruiter. Turns out, they had a client who wanted someone with experience designing concrete, which happened to be my expertise and a dream job of mine.
Thirteen months after losing a great job, six months of a decent job, I'm a few months into another great job that I can see myself in for a long time to come.
There's some evidence construction is recovering. The housing market seems to be bottoming out with a key housing index showing broad U.S. improvement in housing values, particularly in the Twin Cities.
Construction was one of only two job categories showing growth in job vacancies from August 2008 to August 2009, according to the state labor department (the other was "personal care & service").
But no one's expecting a return to the go-go days anytime soon.MPR ran a story Monday on architects still suffering.
"Ready mix concrete sales peaked in Minnesota in the summer of 2005 and have followed the national housing trend down pretty faithfully since then," said Fred Corrigan, executive director of the Aggregate & Ready Mix Association of Minnesota.
"The slump in commercial/industrial construction has added to that trends in the past year and does not show any hope of that turning around for the next year or two."
While Berg feels like he's on solid ground in a job he really likes, he keeps a wary eye on the economy.
While it's great to be working again, and busily working, I also understand that things can turn on a dime. I know our competitors are coming at us from all sides, and the construction market is fragile right now.
Housing starts still aren't where they were a few years ago, and that pushes back on infrastructure construction, meaning all the contractors are fighting like mad for jobs. (I remember even in mid-08, we had some jobs come back WAY under estimated costs; contractors were bidding low just to keep working.) When the contractors are bidding down the jobs, we have to in turn bid down the cost of materials that we charge.
So while I'm optimistic, there's a healthy dose of reality.
Are you in the construction business in Minnesota? Tell us what you're seeing. Check out the map below to read what people in MPR's Public Insight Network are telling us about the job climate around them.
UPDATE: Forum on small business and credit is over and went great. Check out the entire conversation below as well as this follow up post.
We invited nine Minnesota entrepreneurs and small business owners to chat online about the challenges of keeping the money flowing in this recession.
You can watch it and contribute to it below.
We'll be talking about the struggle to raise capital -- are some businesspeople using credit cards to keep the business afloat? -- as well as ways to get around the credit crunch. Some businesspeople have gone to an all-cash system.
The forum starts at noon (Central Time!) today. Please check it out here and jump in. (Also, let me know what you like or don't like about virtual forums, or what we could better.)
You can also click here and share a quick story about what the economy is like around you.