PATRICK REHKAMP: Hi, Cathy. Thanks for inviting me.
INTERVIEWER: Well, I’m glad you’re here. Hey, I get that The Business Journal reported where homebuyers are paying more above the listed price.
PATRICK REHKAMP: Yeah, to quickly backtrack, what we’ve seen is that the median home sales price in the Twin Cities area, which includes the suburbs, hit $375,000 in May. That’s depressing for many potential buyers and people looking to buy a home. But we do know that the median sales price was actually about $5,000 less than the median list price.
So the list prices are increasing faster than the asking price. That could be good news, that the market is getting weaker and people just won’t keep up or buyers won’t keep up with what sellers want.
PATRICK REHKAMP: Generally speaking, it’s still the suburbs. We’re looking at Waconia, even Saint Cloud, those houses tend to be the most profitable, the median sales price remains consistent. It looks like COVID and remote work is an important role for it. If you want a big house with a couple of bedrooms and two home offices, going out to Saint Michael, Waconia, even south of Shakopee, that’s where you’ll find it.
Homes in the direct urban core, Minneapolis and Saint Paul, have held steady. They haven’t been bad. But the real sale prices are explosive, even in the suburbs.
CATHY: Very good. Hey, let’s move on to the history of breweries. THC, at the beginning of the show because we were talking about the new cannabis edibles law that passed on July 1 in the state. And these THC-infused drinks are now legal, just like edibles. How are Twin Cities breweries taking advantage of this new law?
PATRICK REHKAMP: We know of one, Indeed Brewing Company in Northeast Minneapolis is moving into it. They are going to launch a non-alcoholic mineral water that contains 2 milligrams of THC. They are quite cunning. They follow the state legislature probably more than most other breweries. And a couple of years ago, they released one with CBD, which is the other component found in a lot of marijuana. So they have been aware of this. And they haven’t announced when yet, but soon is what they said.
CATHY: Okay. So the breweries, of course. I also mentioned the ciders. Cider production was up, up, up a lot last year, I understand. What’s going on with that?
PATRICK REHKAMP: So if you look at the alcohol industry as a whole, there are different segments that are hot and there are different segments that are slow. The cider is very hot. Minnesota cider is way up there. Last year 500,000 gallons were produced. That’s great. About 31% as of 2020. These are all local ciders as well. It is one of those segments that are really fashionable. Beer seems to be slowing down and people are turning to cider.
This can be a bit subjective, but Minnesota ciders tend to rank pretty well when it comes to quality. And people are reaching out to them. In general, it is a fairly small segment of the alcohol industry. If you look globally, at alcohol, the global alcohol market is about $88 billion. Cider accounts for about 10% of it. So it’s small. But there is plenty of room for growth. And we’re seeing it here in the state.
CATHY: Very good. Say, before you go, I see that Target and Best Buy, two Minnesota-based companies, are having big sales to compete with Amazon’s summer sales.
PATRICK REHKAMP: That’s right. So, Amazon Prime Day is where you can get a ton of deals online through Amazon. If you remember, it runs from July 12 to 13. Best Buy and Target, two local businesses are also getting on board. It’s a really competitive thing.
If you look at these markets right now or these companies, this is a really slow time of year for these retailers. It’s before back-to-school shopping starts. It’s long before the holidays. They do these super deals and they do it pretty well. We have seen it in the past. It’s a lot of money for them.
They talked about Amazon Prime, it was about $3.5 billion in sales just during those two days that they did it. Target hasn’t released similar numbers, but we know it’s big for them. And these things continue to grow as well as the income they mean for companies.
CATHY: Say, by the way. I heard it’s your birthday. A little bird told me that today was your birthday. So happy birthday.
PATRICK REHKAMP: Thank you. I got the best possible birthday present. My wonderful wife took care of the morning, she took care of the morning with our baby and took her to the nursery while I got some sleep. So–
CATHY: Oh. Nice. Nice.
PATRICK REHKAMP: That’s all I could ask for.
CATHY: Very good. Well, enjoy the rest of your birthday. Thanks, Patrick.
PATRICK REHKAMP: Thank you, Cathy. To learn more about those stories and other local business news, log on to mspbj.com.
CATHY: Alright, we’ll talk later. Thanks.
PATRICK REHKAMP: Thank you.
CATHY: Patrick Rehkamp is a reporter for The Minneapolis/Saint Paul Business Journal.