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<br /> Page 14 Nagell Appraisal Incorporated | 952.544.8966 <br />Regional Data – continued <br /> <br />Economic Trends <br /> <br />The current residential interest rates for a typical 30-year mortgage are around 4.0% to 5.0%. <br />Commercial rates are around 4.5% to 6.0%. Rates are expected to be relatively stable for the <br />foreseeable future. <br /> <br />The state of the macro economy (national, state, etc.) declined from its peak in 2006, but in 2010 began <br />showing signs of recovery. Many economists are terming 2007 through 2009 as “The Great <br />Recession”. <br /> <br />New construction labor costs have softened, however, material costs appear to be rising. Overall, <br />construction costs are very competitive to what they were 5 to 6 years ago. Gener ally, when vacancy is <br />over 10%, new commercial/industrial construction is slow. Generally vacancy and capitalization rates <br />were on the rise during the “Great Recession” but are now showing signs of stabilizing and declining. <br /> <br />Listing prices have been declining from the peak of the market in 2006 which was a period of high seller <br />expectations. Recently seller expectations and value appear to be trending towards equilibrium. <br /> <br /> <br />Although well diversified, the TCMA and surrounding Minnesota economy is not im mune to the recent <br />soft/declining trends of the overall economy. <br /> <br /> <br />Source: Minnesota DEED <br /> <br />Minnesota’s index plunged along with the national index during the worst months of the recession but <br />bottomed out earlier and dropped less than the national index. Minnesota’s economy recovered more <br />quickly and stronger compared to the national recovery. <br /> <br /> <br /> <br />