Minneapolis–St. Paul Real Estate Market Update

Real Estate Weekly Update
December 27, 2010


We don’t want to make excuses, okay, but it has been the snowiest December on record for the Twin Cities metropolitan area. We’re all too aware that our market metrics have provided some sting through much of 2010, and the snow and snow and more snow nudging us toward 2011 hasn’t helped.

There were 458 Pending Sales for the week ending December 18, marking a 14.1 percent drop from year-ago levels. Meanwhile, there was an 11.9 percent increase in New Listings for the same time period comparison.

Active Listings for Sale, at 22,956, continue to drop from week to week, but we are still 12.3 percent ahead of last year’s total number of  listings. Other challenges include:

• Days on Market Until Sale – up 10.1% to 140 days
• Percent of Original List Price Received at Sale – down 5.2% to 89.4%
• Supply Demand Ratio – up 17.5% to 9.72 houses per buyer
• Months Supply of Inventory – up 36.8% to 7.8 months

With two more weeks to report for 2010, we are ready for the mental refresher that will arrive with a new year.

As reported by the Minneapolis Area Association of Realtors.

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Minneapolis–St. Paul Real Estate Market Update

Real Estate Weekly Update
December 20, 2010

After a brief flirtation with black ink, we returned to year-over-year declines in buyer activity in the 13-county Twin Cities metro area. There were 522 Pending Sales for the week ending December 11. That’s a 3.7 percent dip from year-ago levels – a minuscule change when placed in the context of recent history.

Sellers introduced more homes to the marketplace than they did last year at this time, placing 1,053 new homes on the market for a 2.4 percent increase over 2009 levels.

This recipe has enabled year-over-year inventory growth even as that metric shrinks from month-to-month. The 23,349 active listings for sale presented 11.3 percent more options for buyers than last year, but the rate of growth has decelerated.

As we tally the returns from this historically snowy run toward 2011, don’t expect a colossal shift in buyer or seller activity for the closing weeks of December.

As reported by the Minneapolis Area Association of Realtors.

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Minneapolis–St. Paul Real Estate Market Update

Real Estate Weekly Update
December 13, 2010

Remember the week ending May 1? The weather was considerably warmer, there wasn’t more than two feet of snow on the ground and the optimism was high surrounding our professional sports teams. Things change.

That fateful week in May was also the last time our market recorded a year-over-year increase in weekly pending sales…until now.

For the week ending December 3, there were 606 pending sales, an increase of 10.0 percent from the same week last year. That’s the first year-over-year increase in 30 weeks. Whether this positive trend continues will depend upon job growth and other economic factors, but this small sign of hope is nice to see in December.

On the opposite end of the spectrum, new listings are consistently not matching last year’s marks — a welcome sign in this era of high supply. The 1,081 new listings for the most recent week is a decline of 13.8 percent from last year’s pace and marks the 11th week of the last 13 to post a year-over-year decline.

As reported by the Minneapolis Area Association of Realtors

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Minneapolis–St. Paul Real Estate Market Update

Real Estate Weekly Update
December 6, 2010

After more than six months of double-digit declines, the past three weeks have shown year-over-year sales declines of less than 6 percent. For the week ending November 27, buyers signed 377 purchase agreements, or 5.5 percent fewer than last year.

Let’s play with personification: Twin Cities Housing Market, this is Statistical Normalcy. You two met about eight months ago, but you haven’t seen each other in a while. We’ll let you catch up.

And that’s our running theme for the week. Sellers mimicked their activity from last year and tightened up to 2009’s trend line. Like Pending Sales, New Listings have narrowed the gap between this and last year’s numbers, but they experienced a notable slowdown due to the Thanksgiving holiday. There were 676 new properties entering the market for a 6.4 percent decrease from last year.

Inventory has been dropping at roughly the same rate as it did at this time in 2009. Currently, the 23,812 Active Listings represent a 9.8 percent supply spike compared to last year. Keep in mind that some sellers take property off the market at this time of year as a way to stop the play clock while buyers hibernate.

As reported by the Minneapolis Area Association of Realtors.

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Minneapolis–St. Paul Real Estate Market Update

Real Estate Weekly Update
November 29, 2010

For the week ending November 20, Pending Sales in the Twin Cities metropolitan area declined by just 4.1 percent from year-ago levels, marking the second week in a row where this year’s sales figures closely match last year’s numbers. There were 579 pendings for the week, and we have kept pace at about 600 sales per week for the past six months.

At 1,159, New Listings were 1.3 percent below 2009 levels. This year’s listing activity has occasionally strayed from last year’s trend line but has, for the most part, tracked along a fairly similar path.

As expected, the year-over-year inventory gains have been tapering off. As of November 29, the 24,423 active listings were 9.6 percent fewer than last year at this time. That’s the third consecutive week of decreasing inventory gains. This metric does a great job of illustrating the buyer-seller balance as the market prepares for hibernation.

As reported by the Minneapolis Area Association of Realtors.

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Minneapolis–St Paul Real Estate Market: November 2010

Where has the Twin Cities real estate market been and where is it heading? This monthly summary provides an overview of current trends and projections for future activity.

Narrated by Brad Fisher (2010 President, Minneapolis Area Association of REALTORS®), script written by David Arbit, audio recorded by Zach Foty and video produced by Chelsie Lopez.

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Minneapolis–St. Paul Real Estate Market Update

Real Estate Weekly Update
November 22, 2010

Despite the icy roads, year-over-year purchase demand gives the appearance of gaining some traction. For the week ending November 13, there were 577 Pending Sales in the Twin Cities metropolitan area, a small 4.3 percent decline from year-ago levels.

Don’t put too much stock in this closing gap of home buyer activity, as compared to 2009. This year’s home sales have remained relatively flat at winter levels since the tax credit expired last spring. Buyer activity declined at this time in 2009 and that’s driving down the year-over-year change. We’re just now entering the part of the calendar where this sales trend is to be expected.

After two weeks of flirting with black ink, seller activity is back in the red. The 1,144 new homes listed on the market was a 5.3 percent decrease from 2009 levels. Inventory increases seem to be tapering off, a seasonal expectation for this time of year. There are 24,849 homes for buyers to choose from, up 10.4 percent from year-ago levels. That’s the smallest inventory gain in seven weeks. If this trend continues, it will serve to help rebalance the Twin Cities housing market.

As reported by the Minneapolis Area Association of Realtors

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Minneapolis–St. Paul Real Estate Market Update

Real Estate Weekly Update
November 15, 2010

For the week ending November 6, the pending snow outlook worsened as the Pending Sales outlook improved. The 619 signed purchase agreements in the Twin Cities metropolitan area marked a 16.0 percent drop from the same week last year. That’s the smallest decline since the week ending May 8.

We do need to add some context to that piece of good news. We are not seeing an increase in sales activity this year so much as sales began to decline at this time last year. The post tax-credit demand vacuum will lose suction during the winter months but will likely reappear this spring.

Potential sellers had a relatively busy week, listing 1,399 new properties on the market for a 10.6 percent increase over last year. That’s the first significant increase in New Listings since the week ending April 24.

Although inventory levels were 11.3 percent higher than last year at 25,257 active listings, the rate of increase appears to be slowing. The Supply Demand Ratio has reached 10.82, its highest level since December 2008. This means there are currently about 11 homes available per buyer.

As reported by the Minneapolis Area Association of Realtors.

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Minneapolis–St Paul Real Estate Market: October 2010

Where has the Twin Cities real estate market been and where is it heading? This monthly summary provides an overview of current trends and projections for future activity. Narrated by Jeff Allen (Research Director, Minneapolis Area Association of REALTORS® and 10K Research | Marketing), audio recorded by Zach Foty and video produced by Chelsie Foty.
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Minneapolis-St. Paul Real Estate Market Update

Real Estate Weekly Update
October 18, 2010

As the temperature drop outside, grab your favorite hot beverage and let’s review the buyers and sellers weekly dance card. Current activity may look especially slow compared to last year’s tax-credit-induced performance.

For the week ending October 9, sellers picked up their tempo by introducing 1,479 new listings to the marketplace. The year-over-year comparison gap continues to narrow as this figure represents 4.1 percent fewer new homes than last year at this time. Buyers continue dancing to a slower beat. The 523 pending sales for the week were 44.8 percent fewer than last year–the largest decline in 13 weeks.

inventory levels are still high with seller activity on the rise and buyer activity remaining sluggish. There were 26,866 active listings as of October 18. Keep a close watch on this metric, as it emphasizes the dynamic balance between supply and demand—the most critical forces affecting the market.

There is some good news. Housing affordability is at 220, an all-time high. The availability of low-interest rates combined with low-cost homes combined have created an extraordinary buying opportunity.

Statistics provided by the Minneapolis Area Association of REALTORS®.

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Rethinking Homeownership: A Long-Term View

This post is courtesy of one of the lenders I utilize, Kate Wilson, of Fairway Independent Mortgage. She and her team work with all buyers and are especially knowledgeable about first-time buyer programs.
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Guest Author: Kate Wilson of Fairway Independent Mortgage

We have a magazine rack for our clients in our lobby. I was really hesitant to put out the September 6th edition of Time Magazine because the front cover read: Rethinking Homeownership: Why Owning a Home May no Longer Make Economic Sense.
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I can think of a lot of things that don’t make much economic sense but I sure wouldn’t put buying a house in that category. I have some pretty strong convictions about why homeownership is important and a lot of them start with common sense. I take the long-term view:
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There are tax advantages to homeownership that you don’t get when you rent. Once you have a fixed rate mortgage, the principal and interest payment will not change over time. Your rent will and you have no control over just how much those rent increases might be. Both the interest and the property taxes are deductible but only your landlord gets to deduct them when you rent.
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At the end of the day, a house is a forced savings account. If you pay all of the payments, at the end of the loan term, you own the asset. You can save yourself a lot of interest and get there faster by making one extra Principal and Interest Payment a year. It’ll take about 7 years off of a 30 year loan. If you pay rent for 30 years, your landlord will own the asset and use it to pay for his Long Term Care, not yours.
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Your mortgage should not outlive your retirement age even if you’re buying up. Mortgages come in terms of 10, 15, 20, 25, and 30 years. Consider this: If you’re buying up, keep your mortgage in sync with your overall financial plan and objectives. If you’re considering a move, take the age you want to retire and subtract from it your current age and see how much you’ll qualify for using that amortization period. There’s no prepayment penalty for first mortgages these days so even if you take out a 30-year mortgage to protect against a ‘what if’ scenario, figure out how much extra principal it takes to repay it according to your retirement timeline and just do it.
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Home equity lines of credit for vacations or the purchase of cars are a bad idea. You’ll be paying for that vacation long after the memories have faded. The car started to depreciate the minute you drove it off the lot and you’ll be paying for the old one even after it’s eligible for vintage plates.  In the meantime, you will probably have to buy another car and pay for it while you’re still paying for the trade in.
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The most common sense reason I can think of for homeownership has nothing to do with it making economic sense. When you own your home, you are free to make it fit your lifestyle and a reflection of who you are. Landlords call such changes ‘damages’ and keep your deposit or kick you out. If the landlord decides to sell and you have to move, you can lose years of accumulated emotional net worth.

Other than graduating from college, having my kids, and marrying my sweetheart, I can’t think of a better decision I’ve made in my life than becoming a home owner. Your thoughts?

Kate Wilson

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I agree with what Kate has written here which is why I asked her if she was agreeable to my posting her thoughts here. We’d both be interested to know your thoughts. Share them by adding a comment below. (The typeface color for Leave a Comment is green so it doesn’t stand out immediately but it’s at the end of the list of tag words at the bottom of this entry.)

Learn more about Kate Wilson and her team here: www.katewilson.com

Kate Walsh
REALTOR®
Lakes Area Realty
612.220.3309
info@designhouse9.com
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Minneapolis—St. Paul Real Estate Market Update

Real Estate Weekly Update
October 12, 2010

We’re used to seeing housing activity slow down at this time of year. Trouble is,
this seasonal slowdown is amplified when compared to a front-loaded 2010
selling season and a comparably strong tax-credit-driven 4th quarter 2009
selling season. The net effect is that year-over-year changes are comparing an
incentive period to a non-incentive period. Keep that in mind in the coming
weeks when looking over the latest housing market figures.

For the week ending October 2, sellers placed 5.3 percent fewer homes on the
market. In sum, 1,541 new properties came online during the week. By
comparison, over the past three months, the average decline between this and
last year’s activity is 9.1 percent.

The 630 pending sales during the week were 39.6 percent fewer than the same
week last year. Since the second week of June, the percentage decline in
buyer activity from the same week last year has ranged between 48 and 34
percent. That’s not a pretty picture for the most recent four-month period.
Inventory continued along its growth path, checking in at 27,033 as of October
12. This was an 11.0 percent increase over last year at this time, which is the
largest increase since the final week of January 2008. Market times and
negotiations are starting to reflect this trend.

As reported by the Minneapolis Area Association of Realtors

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Mortgage Interest Rates: So Low!

Interest Rates for October 8, 2010

This information came through my email today. Are you ready to buy?
If so, call me and I’ll help you find a home that suits your needs.

Kate Walsh
REALTOR®
612.220.3309
Lakes Area Realty

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15-Year Term 30-Year Term
Interest Rate APR Interest Rate APR
Conventional 3.375% 3.653% 3.875% 4.033%
FHA 3.500% 4.017% 3.875% 4.646%
VA 3.500% 3.762% 4.000% 4.269%
USDA N/A 4.000% 4.437%
Rate Scenarios: Conventional: Rate based on $200,000.00 primary home purchase; $160,000.00 loan amount, 80% LTV (20% down payment), 740 Credit Score, DTI of 41%, and Escrowing RE Taxes & Homeowners Insurance.
FHA: Rate based on $200,000.00 primary home purchase; $193,000.00 base loan amount, 96.5% LTV (3.5% down payment), 660 Credit Score, DTI of 41%, and Escrowing RE Taxes & Homeowners Insurance.
VA: Rate based on $200,000.00 primary home purchase; $200,000.00 base loan amount, 100% LTV (0% down payment), 660 Credit Score, DTI of 41%, and Escrowing RE Taxes & Homeowners Insurance.
USDA: Rate based on $200,000.00 primary home purchase; $200,000.00 base loan amount, 100% LTV (0% down payment), 620 Credit Score, DTI of 41%, and Escrowing RE Taxes & Homeowners Insurance.
* Interest rates listed above are calculated with 0 points,
a 25 day lock period and are subject to change at any time.

Minneapolis—St Paul Real Estate Market: September 2010

Where has the Twin Cities real estate market been and where is it heading? This monthly summary provides an overview of current trends and projections for future activity. Narrated by Cari Linn (Secretary, Minneapolis Area Association of REALTORS®), audio recorded by Zach Foty and video produced by Chelsie Foty.
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Minneapolis—St. Paul Real Estate Market Update

Real Estate Weekly Update
October 4, 2010

In the Twin Cities metropolitan area, the frost that some of us found on our lawns also kept the housing market in a sort of frozen state. For the week ending September 25, sellers placed 1,382 new homes on the market, which was 19.9 percent fewer than last year at this time. Over the past three months, listing activity has been an average of 9.2 percent under last year’s levels.

Buyer activity produced 41.7 percent fewer purchase agreements than last year
at this time. There were 616 contracts signed. Pending Sales are still mimicking last year’s activity, except with roughly 400 fewer sales. For the three-month average, the decline rests at 39.0 percent below 2009 levels.

Be aware that we’re in an apples-to-oranges comparison period since the tax
credit was in force last year at this time. Year-over-year comparisons may
appear artificially low due to a market incentive that no longer exists.
Inventory levels are a crucial metric to watch, as they tell the story of whether
listings overwhelm the market during times of slow purchase demand. As of
October 4, there were 26,915 active listings on the market, 9.8 percent more
than the same week in 2009.

As reported by the Minneapolis Area Association of Realtors

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2010 Parade of Homes Dream Home

4602 Bruce Avenue
Edina MN

It’s the last two days of the Parade of Homes.
See this Parade Dream Home Oct 2-3.

This new home was built by Refined. What is particularly nice about this home is the well-designed floor plan, the spacious but not over-sized rooms, and the highly attractive detailing and finishes. It’s a very inviting and comfortable home.

Interior window wall adds a distinctive touch.

Refined builds new homes in established neighborhoods and seamlessly blends the new home with the existing surrounding architecture. The partners in the company  have worked in the luxury custom home industry. The exquisite quality of design and materials shows throughout this home. Click on the photos below to see them larger.

Formal Dining Room

Fireplace in Living Room

Kitchen
Master Bedroom
Master Bathroom
Lower Level Entertaining Areas
Bar in Lower Level

Classic Design that Fits into Neighborhood

Refined LLC’s website

Parade of Homes Website

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“How To” Staging Video with Barbara Corcoran

Barbara Corcoran discusses how to stage a home.

Barbara Corcoran is the real estate contributor to NBC’s Today Show. She operated a multi-billion dollar real estate business in New York City for many years. This video was made in 2007 and much of what she says is still valid today in our current marketplace.

Staging Tips Summary:

  • The first impression of your home is from the curb. Spruce up your exterior: landscaping, doors, mailbox, hardware, paint, etc. Use three colors for the exterior of your home: one color for the walls, a second color for the trim and a third color for your front door. This provides depth and interest to the exterior.
  • Buyers form an impression upon entering the home. What do they see? Too much stuff or just enough? Or perhaps too little stuff that leaves the room feeling cold and uninviting? I’ve had buyers look at the living room and kitchen and decide they don’t need to see the rest of the house.
  • People respond positively to natural light. Open or remove curtains, trim hedges, use light paint colors on walls if need be. Light sells homes. During fall and winter when it gets dark earlier, make sure you use the brightest possible wattage in your fixtures and that all the bulbs work. Use multiple light sources if possible, especially in bedrooms (ceiling fixtures and lamps).
  • The kitchen is the most important room in a house. Barbara says there’s no reason to make major improvements because you’ll never get the money back. I think this depends on the house, the kitchen and other factors such as desirability of neighborhood and how the rest of the house stacks up. Clearing counters of too much stuff works here just as it does throughout the rest of the house. A fresh coat of paint on the cabinets might be a good thing depending on your cabinets and the condition of the rest of your kitchen.
  • The bathroom can be the second most important room. Both the kitchen and bath tend to be big expense items when it comes to remodeling. A clean and uncluttered bath is, in most cases, all that is needed for selling.
  • Bedrooms should look peaceful and clean. New bedding might be in order to freshen the space. This can be an inexpensive update and you can take the bedding to your new place.
  • Yes, buyers look in your linen closet. A clean and organized linen closet goes a long way. It’s worth the time spent on it.
  • Barbara says to stop smoking. This might be something a smoker can do (smoke outdoors) but if the smoke has permeated the walls and furnishings, more will need to be done. Most sellers aren’t likely to remove pets. The best bet is to keep your house clean and to open the windows (weather permitting). I personally do not care for air fresheners and potpourri. These create an artificial smell and make me wonder what smell the owner is trying to mask. A clean house is best and does not smell. When it comes to air quality, no odor is best.
  • The arrangement of your furniture can make your spaces more or less appealing. This is best addressed on a house by house basis rather than here in this post. I work with my sellers to create inviting rooms using the furnishings they already have. This works most of the time.
  • When in doubt, think these three things for your home: Neutral, clean, and classic.

Do you have more questions about staging or preparing your home for the market? Feel free to give me a call for a consultation.

Kate Walsh
Lakes Area Realty
612.220.3309
info@designhouse9.com

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Minneapolis—St. Paul Real Estate Market Update

Real Estate Weekly Update
September 13, 2010

The Twin Cities residential real estate market’s paralysis continues. New listings were down 12.8 percent compared to last year at this time for the week ending September 4, 2010. Even so, more properties came on the market this past week than the week ending August 28th—a time when the school year normally slows seller activity.

Pending Sales were up slightly from the previous four weeks but remain 35.9 percent behind where we were at this time in 2009. This has been the case all summer long.

Active Listings for Sale are now 8.9 percent ahead of last year. Percent of Original List Price Received at Sale leaned toward buyers last month. Good news for home hunters; even more challenges for those looking to sell.

Statistical information provided by the Minneapolis Area Association of Realtors

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