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Economics, Government Policy, Home Prices, Housing, Housing Trends, Real Estate Trends, Residential Real Estate, Residential Real Estate Index, Twin Cities Real Estate

Is the Twin Cities Housing Market Really Beginning to Change?

What really drives the need for housing?    

Since the June and July housing numbers have been published there seems to be much more uncertainty about the current state of the housing market. People are beginning to ask questions about the housing market. Is the decrease in sales volume a warning sign? Are we in a bubble? Will there be another housing market correction? One or two months data by themselves doesn’t signal a major change in the direction of the housing market. We will need to look at several more months data to understand more about where the market is headed.

 The number of closed sales were down 12.5% between June and July of this year. However, number of home sales in the Twin Cities was essentially unchanged in July 2018 compared to July 2017. If you look at the overall seasonal pattern for the number of homes sold is following a very similar pattern compared to previous years. Looking at the data for the median sale price, the number of closed sales, and the number of homes available for sale you will notice that the pattern for 2018 is very similar to 2016 and 2017. People have expressed

             Homes Sold YTD 2018 vs. YTD 2017
Jan 2017 2018       +/-
Feb 2805 2787 -18
Mar 2744 2671 -73
Apr 4304 4033 -271
May 4726 4688 -38
Jun 6265 5775 -490
Jul 7527 7160 -367
Aug 6046 6278 232
 
Total 34417 33392 -1025

concern that the number of sales is declining. When you look at 2018 year to date sales there have been just over 1,000 fewer homes sold this year compared to last year. About half of this amount occurred in May. I think that we are going to need to see a few more months data to understand if this is a long-term change in the market. At this point much of the decrease in the number of homes sold seems to be a result of the continued decrease in the number of homes available for sale. The number of homes available for sale was 12.3% less than last July. Median sale prices continue to increase, up 6.6% year over year compared to July 2017.

What really drives the need for housing?

Many people correctly point to increasing population and job growth as the primary reason. Job growth doesn’t drive housing demand, housing demand responds to job growth. Few people are against job growth, it is considered by many as sign of “progress”. There are many local economic development groups trying to attract new jobs by offering incentives for potential employers. Almost all communities are in favor of job growth but what about the housing needs that are created by this job growth? In many of the communities where people want to live creating more housing translates to more density. The truth be told, many people are in favor of more housing and more affordable housing as long as it not near them. According to recent DEED statistics employment in the Twin Cities metro area in the last 12 months has increased by 30,800 jobs. We have not been creating enough new housing units to keep up with that growth rate. As a result, we have a chronic shortage of homes available for sale, median sale prices are increasing faster than wage growth, a very low vacancy rate for rental housing, and rents that continue rise faster than the cost of living. It’s becoming increasing difficult and expensive to develop and create any type of for sale or rental housing. If we are going to continue to have strong economic growth, then we are going to have to figure out a way to create enough new housing units at all price levels to keep up with the increasing employment growth.

 What about new housing? Why does it take so long? Why is it so expensive?

  •      Lack of entitled land
  •      Difficulty and length of the entitlement process
  •      Excessive impact and local fees
  •      Zoning and bias against density
  •      Inclusionary zoning
  •      Rapidly increasing construction costs
  •      Rapidly increasing land costs

As long as our local economy continues to grow and is creating more jobs these are some of the issues that need to be addressed if we are going to come up with meaningful solutions to our housing market issues.

For more information, visit the Shenehon Center’s complete report for July 2018 at http://www.stthomas.edu/business/centers/shenehon/research/. The report is also available for free via email from Tousley at hwtousley1@stthomas.edu

Affordable Housing, Development, Home Prices, Housing, Housing Trends, Industry News, Residential Real Estate

Ten Surprising Facts: State of the Nation’s Housing Report

Since the housing bubble burst in 2008, the market has seen an increase in demand for homes, but home inventories remain stagnant. Further, either from the bank restrictions or consumer caution new home growth has been at record lows for the last 10 years. Whether this is just a trend or due to socio-economic reasons can be debated, but statistics do show Millenials are living with their parents longer and seem to be putting off buying homes due to a different economic situation than previous generations at the same age (US Census).

Further a recent housing report by Joint Center for Housing Studies of Harvard University, posit similar statistics in the market strengthening the argument that Millenials and uncertainty are holding down the housing market.

1. For-sale inventories dropped even lower over the past year.

For the fourth year in a row, the inventory of homes for sale across the US not only failed to recover, but dropped yet again. At the end of 2016 there were an historically low 1.65 million homes for sale nationwide, which at the current sales rate was just 3.6 months of supply – almost half of the 6.0 months level that is considered a balanced market.

2. Fewer homes were built over the last 10 years than any 10-year period in recent history.

Even with the recent recovery in both single-family and multifamily construction, markets nationwide are still feeling the effects of the deep and extended decline in housing construction. Over the past 10 years, just 9 million new housing units were completed and added to the housing stock. This was the lowest 10-year period on records dating back to the 1970s, and far below the 14 and 15 million units averaged over the 1980s and 1990s.

Read more of the Full Article or go straight to the full Housing Report by Joint Center for Housing Studies of Harvard University

 

Economics, Home Prices, Housing, Housing Trends, Minneapolis / St. Paul Housing, Real Estate Trends, Residential Real Estate, Residential Real Estate Index, Twin Cities Real Estate

Twin Cities Sets Records for Median Sale Price and Number of Homes Sold

Are we seeing another bubble in the Twin Cities housingMarket Report

market? Not this time, says St. Thomas’ monthly analysis  

With median sale prices hitting a record high in June, is the Twin Cities housing market experiencing the kind of bubble we saw back in June 2006? According to a monthly analysis conducted by the Shenehon Center for Real Estate at the University of St. Thomas’ Opus College of Business, the short answer is no. The median sale price of homes sold in the 13-county Twin Cities region reached $242,000 in June. That tops the previous high-water mark of $238,000 set in June 2006. On top of that, the 7,110 homes sold in June was another record high.

Each month the St. Thomas center tracks the median price for three types of sales: nondistressed or traditional; foreclosures; and short sales (when a home is sold for less than the outstanding mortgage balance). In addition, it looks for trends in the market and creates a monthly composite index score by tracking nine data elements for those three types of sales.

Herb Tousley, director of real estate programs at the university, said the reasons for the current run up in housing prices are much different than the conditions that led to the run up in values in the mid-2000s followed by the subsequent crash. “Before 2008, lending standards were very lax,” he said. “Little to no down payments were required since everyone believed that home prices would always keep going up. There were many low-documentation or ‘no-doc’ loans that were made to people who were not qualified, resulting in high numbers of foreclosures and short sales. “Additionally, overbuilding, speculation, and excessive flipping of homes were major contributors to the housing market crises of 2008. “Today, mortgages are only being made to qualified buyers, home flipping has returned to normal levels, and overbuilding is not a problem. The current run up in home prices can be attributed to market fundamentals. There is a shortage of homes for sale and a historically high level of demand fueled by low interest rates and an improving economy. “One concern is the affordability issue; that occurs when home prices rise faster than family income. When this occurs over an extended period of time it becomes more difficult for families to afford to purchase a home due to higher required down payments and higher monthly payments,” Tousley said.

It has taken 10 years for the median sale price of a Twin Cities home to recover to its previous peak level. Where do we go from here?

Number of sales: In 2015 there were just over 56,000 homes sold in the Twin Cities. Tousley predicts that the second half of 2016 should continue to see a high sales volume. Look for a total of about 58,000 homes sold in 2016.

 Median sale price: In most years, the peak median sale price occurs in June. Maybe not this year. With the low number of homes for sale and continued low interest rates, Tousley feels that median sales prices should be at or above record levels in July and possibly August before tapering off in September. At the end of the year, look for an annual increase in the median sale price of 5 percent to 6 percent, with the median sale price settling in the low $230,000 range.

One reason for the higher median selling price recently is because the percentage of distressed sales – foreclosures and short sales – has finally returned to pre-crash levels. In June, only 5 percent of home sales were distressed. Before 2007, the level of distressed sales was in the 3 percent to five percent range. But during the recession, and especially from 2008 to 2013, the level of distressed sales was in the 40 percent to 60 percent range. Since the median price of distressed homes is considerably lower than nondistressed homes, when there are fewer distressed homes sold the overall median selling price goes up.

In addition to robust home sales, the Twin Cities is seeing more remodeling and more new homes being built. In 2015, the Twin Cities saw the construction of 4,680 new single-family homes. So far this year single-family “starts” are up about 15 percent. “Look for a 2016 year-end total of 5,300 to 5,500,” Tousley said. That would make 2016 the best year for new-home construction since before the recession.

Meanwhile, the Leading Indicator of Remodeling Activity, calculated by the Harvard Joint Center for Housing Studies, estimates that this year the growth in home improvement and repair spending will reach 8 percent, well above the average of 4.9 percent. Tousley said there are two main reasons for the increase.

First, because of the shortage of homes for sale, many potential homeowners are opting to stay where they are and enlarge or remodel their existing homes.

Second, rising home prices and the current “seller’s market” is encouraging some homeowners to upgrade or remodel their home in anticipation of listing it for sale.

“In either case,” Tousley said, “it is good news for remodeling contractors in our area. Many are booked ahead with work well into the fall.”

The St. Thomas indexes.

Here are the Shenehon Center’s monthly composite index scores for June 2016. The index, which tracks nine data elements for the three types of sales (traditional, short sales and foreclosures), started in January 2005. For that month, the center gave each of the three indexes a value of 1,000.

The June 2016 index score for traditional sales was 1,188, up 2.1 percent from May 2016 and up 6.3 percent from June 2015.

The June 2016 index score for short sales was 1,010, up 2.8 percent from May 2016 and up 4.2 percent from June 2015.

The June 2016 index score for foreclosures was 875, up 1.86 from May 2016 and up 7.86 from June 2015.

The score for traditional sales hit record highs in May and June. “It is a result of a continuing tight supply situation and high sales activity indicating the ongoing health a resurgence of the Twin Cities housing market,” Tousley said in Shenehon Center’s June report.

Index Chart June 2016

Affordable Housing, Economics, Home Prices, Housing, Housing Trends, Industry News, Minneapolis / St. Paul Housing, Residential Real Estate, Residential Real Estate Index, Twin Cities Real Estate

St. Thomas’ Real Estate Report Says Twin Cities Housing Market is Set for a Good 2014

Market ReportResearchers from the Shenehon Center for Real Estate say the metro area is one of the most-affordable housing markets in the nation.

 All signs are pointing in the right direction for a good year in the Twin Cities housing market in 2014, according to the Residential Real Estate Price Report Index, a monthly analysis of the 13-county metro area prepared by the Shenehon Center for Real Estate at the University of St. Thomas’ Opus College of Business. Each month the Shenehon Center tracks nine housing-market data elements, including the median price for three types of sales: nondistressed or traditional-type sales, foreclosures, and short sales (when a home is sold for less than the outstanding mortgage balance).

 Herb Tousley, director of real estate programs at the university, said that in the Twin Cities: job creation is up, household formation is up, interest rates are expected to remain relatively low, the percentage of distressed sales (foreclosures and short sales) continues to decline, the existing inventory of homes for sale will improve, and home prices will continue their recovery.

 “The bottom line is that all of these things indicate that 2014 will be a definite step toward the full recovery of the Twin Cities housing market,” he said.

This month’s housing report also noted that home ownership is and will continue to be very affordable in the state and that the Minneapolis and St. Paul area is one of the most-affordable housing markets in the nation. According to the real estate website Trulia, it is 46 percent cheaper to buy than rent in the Twin Cities, compared to the national average of 35 percent. The owning vs. renting comparison is calculated for an average family that will not move for seven years and makes a 20 percent down payment. It factors in all of the costs for both options at current market conditions. Tousley said the economic fundamentals that are important to the housing market are these:

 Low unemployment: Minnesota’s unemployment rate of 4.8 percent is the lowest since December 2007. The Twin Cities rate of 4.1 percent, meanwhile, is the lowest rate observed in the 50 largest metropolitan areas in the nation.

 Job creation: This is improving; from October 2012 to October 2013, slightly more than 50,000 new jobs were created in Minnesota and about 34,000 of those were created in the Twin Cities area.

 Household formation: More new jobs and higher employment rates lead to increased household formation, an important driver of the need for more new homes.  Household formation increased in 2013 and will accelerate in 2014.

 Interest rates: These are expected to remain relatively low in 2014, remaining at about 4.5 percent for a 30-year mortgage. They might move up toward 5 percent during the second half of the year. Also expect to see some improvement in the process of obtaining a mortgage and credit availability.

 Median sale prices: These will continue to increase in 2014. Prices increased 13 percent in the past year, the second-consecutive year of double-digit increases. A low supply of homes for sale, low interest rates and improving economic conditions will continue to put upward pressure on median home-sale prices. Look for more moderate price increases of 4 percent to 6 percent. This rate of growth is healthy and sustainable as the metro area housing market continues to recover.

 Housing bubble?: Will the increases in home prices lead to a housing bubble? The short answer is no. According the Trulia’s “Bubble Watch,” the Minneapolis-St. Paul housing market is 12 percent undervalued relative to underlying fundamentals. This percentage is arrived at by comparing today’s prices with historical prices, rents and incomes.

mortgages Specifically for the month of November, the Shenehon Center found that market indicators took an expected seasonal downturn from October, but that indicators for November 2013 were running ahead of November 2012. One especially bright spot in the data is that the percentage of distressed sales (foreclosures and short sales) stood at 21.9 percent, well below percentages in the mid-30s seen last fall and winter.

 The median price of a traditional (nondistressed) metro area home in November was $217,000, down from $218,750 in October but 2.8 percent higher than the $211,075 median price recorded in November 2012. Tousley said this is consistent with earlier predictions that the annual rate of increase in the price of a traditional home will moderate from the double-digit gains seen earlier this year and last, and remain in the 3 percent to 5 percent range for the rest of 2013 and the first quarter of 2014.

The inventory of metro-area homes for sale remains very low; the 14,165 homes listed in November was 5.5 percent lower than the 14,990 available during the same month a year ago.  The Shenehon Center predicts this will improve in the second half of 2014 as rising prices reduce the number of homeowners who are “under water” with their mortgages.

 The 5,240 new homes under construction during the third quarter of 2013 is 46 percent ahead of last year’s pace. “Look for new-home construction to make additional major gains in 2014 as conditions will be very favorable for new single-family-home construction,” Tousley said.

 The St. Thomas Indexes

 The St. Thomas Traditional Sale Composite Index, the one that tracks nine data elements, stands at 1035 for November. It took a 22-point seasonal downturn from October but is 3.9 percent above November 2012.  Likewise, the November index for short sales is 11 percent higher than a year ago and for foreclosures, the index is 6.9 percent higher.

 More information online

 The Shenehon Center’s report for November (found at http://www.stthomas.edu/business/centers/shenehon/research/default.html) includes charts showing the median sale price of homes, the number of homes for sale, and indexes for the traditional, foreclosure and short-sale markets.

 Research for the monthly reports is conducted by Tousley and Dr. Thomas Hamilton, associate professor of real estate at the university. The index is available free via email from Tousley at hwtousley1@stthomas.edu

Economics, Industry News, Real Estate Trends, Residential Real Estate, Residential Real Estate Index, Twin Cities Real Estate

St. Thomas Residential Real Estate Analysis for September

 mortgagesSt. Thomas real estate analysis for September: the market is

taking its seasonal dip …  but running ahead of 2012 numbers

Here’s one dip that is actually good news: the number of foreclosures and short sales is down considerably from last year. Also, this month’s analysis takes a look at what’s happening to the price-to-income ratio.

Home prices in the Twin Cities real estate market took an expected, seasonal dip in August, but in many respects the market is doing better than this time a year ago, according to the Residential Real Estate Price Report Index, a monthly analysis of the 13-county metro area prepared by the Shenehon Center for Real Estate at the University of St. Thomas’ Opus College of Business. Each month the Shenehon Center tracks nine housing-market data elements, including the median price for three types of sales: nondistressed or traditional-type sales, foreclosures, and short sales (when a home is sold for less than the outstanding mortgage balance).

 This year compared to last

In his analysis for the month of September, Herb Tousley, director of real estate programs at the university, said that “from August to September all of the market indicators for the Twin Cities housing market are showing the normal seasonality that we expect to see every fall.  “September’s median sale prices, and the number of closed sales, new listings and pending sales are all down from the August 2012 levels. What is important is that compared to a year ago most of these indicators continue to show a healthy increase,” he said. The median price of a traditional home in September 2013 was $217,000. That’s down $11,000 or 4.8 percent from the previous month, but is up $10,125 or 4.4 percent from September 2012.  “As we have reported previously, the annual rate of increase in the sale price of traditional homes (not foreclosures or short sales) is expected to moderate and remain in the 3 percent to 5 percent range for the remainder of the year,” Tousley predicted. 

MSP Traditional Home

 

 Low number of homes to buy helps boost prices

 A factor that continues to put upward pressure on home prices is the historically low number of them for sale. In September there were 16,184 homes for sale in the 13-county area, which is 5.9 percent lower than the 17,197 homes available in September 2012. “Historically the number of homes for sale peaks in mid-summer then declines through the fall, bottoming out in December,” Tousley said. “It appears that this year is following the same pattern, and the inventory of homes for sale will remain near all-time low levels.  “As long as interest rates remain steady, look for the number of closed sales to continue to exceed last year’s levels. These conditions indicate that the market will continue to be tight through fall and winter into early spring,” he said.

 Affordability and the price-to-income index

 In this month’s report, the Shenehon Center for Real Estate looked at affordability and the price of homes compared to the income of homebuyers.  Tousley said the combination of low inventories of homes for sale, historically low interest rates and the perception of a slowly improving economy have been fueling the recent recovery in home prices. In many markets the increase in home prices has been outpacing growth in household income. The price-to-income ratio is a measure of affordability that compares the median price of homes to median household income.  “The price-to-income ratio has risen above its historical average in the Twin Cities and many other markets,” Tousley said.

 “In the Twin Cities, historically the median price of a home has been 2.6 times the median household income. As year-over-year home prices have been increasing at a double-digit rate for a good share of the last two years, the ratio has now increased to 3.0. That puts our market in the middle of the pack compared to other major U.S. markets.” He added that the price-to-income ratio is a good indicator of home ownership affordability and can be a predictor of a future housing bubble.

 Home builders are busy

 In September the number of construction permits for single-family homes continued to track about 30 percent ahead of last year. September saw about 3,800 permits issued for new single-family homes in the metro area. The dollar volume for those permits is running about 35 percent ahead of last year. “This indicates that there are not only more homes being built but on average the homes being built this year are more expensive than they were last year,” Tousley said.

 The St. Thomas indexes

 The St. Thomas Traditional Sale Composite Index, the one that tracks nine data elements, came in at 1,070 for September. That’s 20 points lower than August’s 1,090 (the highest recorded level since August 2005) but like most of the real estate measures, it is running well ahead of September 2012 when it was 1,012.

Composite indexes for the distressed sales also are improving over last year. The foreclosure index for September 2013 of 775 is up 10.2 percent from September 2012. The short sale index for September 2013 of 885 is up 12.2 percent from September 2012.

 More information online

 The Shenehon Center’s complete report for September (found at http://www.stthomas.edu/business/centers/shenehon/research/default.html) includes charts showing the median sale price of homes, the ratio of sales compared to the number of homes for sale, and the price-t0-income ratios for the Twin Cities and 20 other major U.S. markets.

 Research for the monthly reports is conducted by Tousley and Dr. Thomas Hamilton, associate professor of real estate at the university. The index is available free via email from Tousley at hwtousley1@stthomas.edu.

Industry News, Investment Real Estate, Real Estate Trends, Residential Real Estate, Residential Real Estate Index, Twin Cities Real Estate

Real Estate Analysis: May Home Prices Were Up, but is Another Bubble Looming?

mortgages

Median home sale prices in May continued to show significant gains compared to the same period last year according to the Minneapolis / St. Paul Residential Real Estate Index, a monthly analysis of the 13-county metro area prepared by the Shenehon Center for Real Estate at the St. Thomas Opus College of Business.

In the Twin Cities, the median sale price of a traditional home (not a foreclosure or short sale) in May was $220,000, an increase of 1.4 percent over the $217,000 reported in April and a 7.3 percent increase over the May 2012 median price of $205,000. Overall, the median sale price for all homes sold in the Twin Cities has been recording double digit year-over-year gains for the past 13 months. Many of the other market indicators are positive as well. When compared to last year, new listings are up 26 percent and pending sales are up 17.9 percent.

The continuing uptick in sale price is a good sign that the market is recovering, according to Herb Tousley director of real estate programs at the university. But should homeowners be concerned that another bubble is looming? Tousley cites two reasons that there should be little concern that there will be another significant drop in home values like what happened in 2006.

“First, there are very few homes on the market for this time of year – about 13,000 versus up to 20,000 we see traditionally,” he said. “But rising prices will bring more homes for sale into the market creating a better balance between supply and demand.” He added that low interest rates are putting sellers in a position of receiving multiple offers, which is driving up prices. In addition, Tousley notes that despite recent increases the median sale price of homes has remained in check when compared to the median household income since the end of 2008. Even though prices have been increasing in the first quarter of 2013 the ratio was 92.6 percent of the long term average. In contrast in the fourth quarter of 2005, at the height of the bubble, the ratio peaked at 140 percent of the long term average. As long as the ratio does not move to significantly over 100 percent, home values will not get out of proportion with household incomes and will remain affordable.

Another positive sign from the May report is the proportion of distressed sales taking place each month continued its decline that began in January of this year. The percentage of closed sales that were distressed in May 2013 fell to 26.9 percent. This is the lowest percentage of distressed sales seen since the third quarter of 2008. The number of traditional (non-distressed sales) was up 32.8 percent compared to the same period last year and the number of short sales and foreclosed sales were down 26.5 and 20.8 percent respectively. “As we noted last month, the number of new foreclosures continues to wind down,” said Tousley. “As the existing foreclosures are sold and clear the market, expect to see a continued reduction in the percentage of distressed sales throughout the late spring and summer.” More details can be found on the Shenehon Center’s website. Research for the monthly reports is conducted by Tousley and Dr. Thomas Hamilton, associate professor of real estate at the university.

Read the entire report: http://www.stthomas.edu/business/centers/shenehon/pdf/MplsStpResREIndex06192013.pdf

 

International Real Estate

Could China’s Real Estate Bubble Dwarf the U.S. 2008 Crash?

Real estate analysts are warning that China may have created the largest real estate bubble in history, and that it could crash soon. China’s real estate boom has been fueled by government infrastructure spending and speculative investing by the emerging Chinese middle class. Chinese citizens have been able to purchase real estate since the 90’s but have  few other options for investing. 60 Minutes recently profiled the resulting phenomenon of massive ghost cities in China, with block after block of skyscrapers sitting completely empty:

http://www.youtube.com/watch?v=KjOuDmy1ybE

http://www.cbsnews.com/video/watch/?id=50142079n

Economics, Government Policy, Industry News, Real Estate Trends, Residential Real Estate

Economists in Survey Oppose Strategic Default, Principal Forgiveness

The article below is by Esther Cho at DSNews.com.  It points out that most economists surveyed would continue to make their mortgage payments even if their property was underwater.  Strategic default is the practice of walking away from a property that is underwater even though the borrower has the financial ability to continue making the payments. I find it interesting that in the commercial real estate, in many cases companies will use a strategic default as a business tactic with little stigma attached. For individuals, however, the situation is much different, the stigma associated from voluntarily walking away from a debt obligation is a major detriment.

Nearly three-quarters of economists surveyed said they would continue making their mortgage payments even if they were deeply underwater, Zillow reported Thursday.

Strategic default, which is when homeowners decide to stop paying their mortgage even though they can afford it, is oftentimes motivated by negative equity.

In Zillow’s Home Price Expectation survey for June, 71 percent of economists said they would not choose strategic default, even if they owed at least 40 percent more on their mortgage compared to the home’s current value.

The survey, which was conducted by Pulsenomics, included 114 responses from economists, real estate experts, and investment and market strategists.

The industry experts were also questioned on their position concerning a government-sponsored program to forgive principal for underwater homeowners.

Coming close to the percentage of those who said they would not strategically default, 72 percent said they opposed a principal reduction program, while 28 percent were in favor of one.

Read the entire article:  http://www.dsnews.com/articles/zillow-three-fourths-of-economists-surveyed-oppose-strategic-default-principal-reduction-2012-07-26

 

Commercial Real Estate, Development, Executive Insight Series, Industry News, Real Estate Trends, Residential Real Estate, Retail Real Estate

Executive Insight Series- Dennis Doyle

Dennis-Doyle“My life is lived from the inside out. My principle values, experience and leadership come from the inside, and guide my life on the outside. It’s an inside job. It seems that everyone is wired differently. Some of us want to make a lot of money, while others want to save the world and help people. You CAN do both! Everyone needs to figure it out. Work is a huge part of it. If you find the right work and path, life can be a real joy and blessing.”

Dennis Doyle, Executive Chairman of the Welsh Property Trust, started his career in real estate as an adolescent who spent his summers working construction for his neighbor, George Welsh. During that period, Mr. Doyle’s passion for construction and development grew exponentially, part of the credit, according to Mr. Doyle, belongs to his older brothers who forced him to work harder to keep up. He left real estate briefly to attend college on a football scholarship, with the intention of becoming a coach, however Mr. Doyle soon realized that this was not his true goal, and returned home to continue his career developing and constructing buildings. In 1977, Mr. Doyle and Mr. Welsh (same childhood neighbor) entered into a handshake agreement, that formed the Welsh Companies, and has shaped the last 30 years of Mr. Doyle’s life. Reflecting on this story, and on his subsequent career, Mr. Doyle lamented,  “I love being able to put my personal touch on buildings, and am very fortunate to have found my life’s passions and being able to continue working in this field.”

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Commercial Real Estate, Development, Executive Insight Series, Industry News, Property Management, Real Estate Trends, Residential Real Estate, Retail Real Estate

Executive Insight Series: Boyd Stofer

Boyd Stofer - CEO Marquette Group

Boyd Stofer - CEO Marquette Group

“No one was doing anything, I mean no one was even talking about starting a new project. Sure I was scared, we paid too much for the building during the worst real estate market in my lifetime. However, we needed to play offense, someone had to make the first move, and it was us. That got a lot of attention, and we were able to get the building 90% leased before we started renovation, that’s just unheard of, and it worked to our benefit.”

The quotation above does a superb job in summing up the career, strategy, and philosophy of Boyd Stofer, president and CEO of the Marquette Real Estate Group. Over the past 32 years, Mr. Stofer has helped United Properties (Now part of the Marquette Group) grow into one of the most successful and profitable real estate development companies in the country. Attending a lecture from Mr. Stofer is somewhat like listening to a Harvard (one of his Ivy degrees) Economics professor give a semesters worth of lectures fast forwarded to a speed that condenses the information into one hour. During his talk it appeared as if he continued to talk as he inhaled, and didn’t miss a beat or misstate a figure as he outlined the micro and macro forces that are effecting the national commercial real estate market. His charisma stems directly from his incredible intelligence and ability to conceptualize and connect the vast set of variables that made up the contents of his talk, ending with the weaving of details to present the Marquette Group’s current standing and plans for the future. It’s no wonder that the Pohlad Family entrusts Mr. Stofer with a significant share of their fortune, as very few individuals can impart their razor sharp intellect and cunning in such a succinct and complete manor. It is highly unlikely that anyone in the room (full of real estate professionals, academics, and students) walked out questioning Mr. Stofer’s understanding of the real estate market, actually, it highly unlikely that anyone who meets him ever has doubtful thoughts.

Biography |

Mr. Stofer’s educational credentials mimics his career as nothing short of top tier. In 1971 he graduated from the Cornell School of Engineering, and followed it up with an MBA with Honors from Harvard. Immediately following his MBA program, Mr. Stofer was hired by Hines Interests, a national real estate development group based in Houston. After three years in Houston Mr. Stofer left and came to Minneapolis to join United Properties, then owned by the Hamm family. Since his hire, Mr. Stofer has led the companies development initiatives, and has amassed an amazing portfolio of work. In 1996 he was named president and CEO, since that time Mr. Stofer has grown and merged United Properties into what is now the Marquette Group. Today, the combined entities of the Marquette group employ over 1,000 people, has assets around $750M and services more than $40B worth of real estate loans. The current operational structure of the Marquette Group is the culmination of Mr. Stofer’s vision for a vertically integrated property firm that is unique in the services that it can provide. The vast array of real estate products that Marquette Group is far from novel, in fact it is probably the firms best financial hedge, in that the organization is prepared and capable of earning revenues in any market and any economic climate.

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