Latest Mortgage News Could Point to Bargains throughout Minnesota

By Richard Barrington
Local Lender Columnist
Nov 14, 2007
Some of the most successful investors on Wall Street are contrarians--they make money by going against popular opinion. The same goes for the real estate market, where bad news can mean lower prices and buying opportunities.

If you are a contrarian looking for opportunities in Minnesota's real estate market, don't assume that fallout from the subprime mortgage crisis is confined to low-income areas. You may find attractive conditions throughout Minnesota, as even wealthier areas saw subprime borrowing reach surprisingly high rates.

Buyers Market in a Variety of Counties

While it may be easy to assume that the subprime mortgage phenomenon was isolated to poorer, urban areas, a closer look shows that subprime mortgage rates were significant in a variety of different counties across Minnesota.

Subprime borrowing grew in popularity in recent years, reaching a crescendo in 2006, as a look at subprime borrowing rates for that year reveals.

For example, relatively rural Isanti County had a subprime borrowing rate of 36 percent. Elsewhere in Minnesota, the more heavily-populated Hennepin County had a subprime borrowing rate of 26 percent, while even affluent Carver County had a 17 percent rate of subprime mortgage borrowing.

Cast a Wide Net for Opportunities

It is important to remember that for all the media hysteria, the vast majority of mortgages--and even subprime mortgages--are not under duress. However, it is fair to say that subprime difficulties have tipped the supply/demand balance of the real estate market in favor of buyers in a number of areas.

The wide geographic distribution of subprime mortgages suggests that prospective buyers in Minnesota do not have to limit their search for bargains--opportunities are likely to arise throughout the state.

Source
Minneapolis-St. Paul Star Tribune

About the Author
Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment industry executive.