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®.
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.
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.
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 of the Minneapolis Area Association of REALTORS®), audio recorded by Zach Foty and video produced by Chelsie Foty.
Here’s an interesting article from The Associated Press on the housing market, both national and local.
Housing recovery is about timing and location
By J.W. ELPHINSTONE (AP) – 5 hours ago
NEW YORK — If you bought a home in San Francisco in the past year, it might feel like the housing slump is over. Bay area home prices have shot up 18 percent in the past year.
But someone next door who bought in 2006 may have suffered a 35 percent loss in value. And if you’re a Las Vegas homeowner, there’s been no good news in four years.
The latest report on home prices confirms that real estate is all about timing and location.
Nationally, home values rose 1.3 percent in May from April, according to the Standard & Poor’s/Case-Shiller 20-city home price index released Tuesday. And 19 of 20 cities showed price gains month over month.
Yet conditions are hardly uniform across the country. Some cities, such as San Francisco and Washington, have less area to build out and better job markets, so they have suffered less or in some cases recovered more quickly. Even cities like Phoenix and Las Vegas, which endured some of the worst losses after the housing bubble burst, are seeing vastly different trends over the past year.
“Generally, in any recovery, there is always parts of the country that lead the way and certain parts that lag behind,” said Jonathan Basile, vice president of economics at Credit Suisse. “To understand why, you have to look at the economies of those areas and how much building went on to help determine why one outperforms and others underperforms.”
Take the metro areas in Las Vegas, Phoenix and Miami. Home values soared in all three cities during the early part of the last decade, then plummeted in the last few years. All three have struggled with high foreclosures.
Yet over the past year, while home prices rose 7.2 percent in Phoenix, they ticked up only 1.2 percent in the Miami and fell 6.5 percent in Las Vegas.
Part of the reason is that Phoenix has a healthier job market than the other two cities. Its metro area had an 8.7 percent unemployment rate in May, one point lower than the national average.
Las Vegas, meanwhile, had a 14.1 percent unemployment rate in May, while Miami had an 11.2 percent rate. That left fewer households in position to take advantage of government tax credits for homebuyers that expired in April and the lowest mortgage rates in decades.
Prices in Las Vegas have lost more than half their value since peaking in August 2006. And the long-term picture isn’t rosy either. Home values there have risen a mere 2 percent since 2000, according to S&P/Case-Shiller.
Miami home prices are up 46 percent since the beginning of the decade, but just 1 percent over the past year. High-end sales have helped boost the median price. In the last three months, there were five sales between $8.7 million and $15 million. There have been only 27 of those in the past nine years, said Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors Inc.
And prices could drop quickly in Miami over the next year. Nearly 23 percent of those homeowners with a mortgage in the area have either missed three consecutive payments or were in foreclosure, according to Moody’s Analytics. That compares with 10 percent in Phoenix and 15 percent in Las Vegas.
“Just like in the housing boom period you had significant divergence by regions, in the early periods of recovery, we’re seeing similar divergence,” said Zach Pandl, analyst at Nomura Global Economics. “But it’s not exactly the same cities in these groups.”
Of all cities, San Francisco has shown the sharpest turnaround. After values plunged 46 percent to their low in March of last year, they have regained 21 percent, the best performance in the S&P/Case-Shiller report.
Doug Duncan, chief economist at mortgage giant Fannie Mae, said housing is healthier in big cities in the Northeast and on the West Coast because they have limited land for construction and better local economies.
With desirable San Francisco, “you have an ocean on one side and some mountains on the other side,” he said.
State homebuying tax credits and a shorter foreclosure process also have helped California housing markets.
Federal tax credits for homebuyers helped prop up prices in cities like Minneapolis where the median home price is just under $170,000. Home values there rose nearly 3 percent in May from April and nearly 13 percent from last year, S&P/Case-Shiller showed.
“But the wind has been taken out of our sails since the expiration and prices are flattening out, especially for entry-level homes,” said Pam Kowalski with Counselor Realty in Minneapolis.
Most economists don’t expect the price increases to last through the year. And many predict prices will fall through the rest of the year. A high number of foreclosures will continue to weigh on prices in many areas, and job uncertainty and tight credit are still keeping many would-be buyers sidelined.
“I bet in six months, 15 to 20 cities will have falling prices,” said IHS Global Insight economist Patrick Newport. He predicts prices will fall a further 6 percent to 8 percent before turning around next year.
The pain, though, likely won’t be equally shared.
AP Business Writers Christopher S. Rugaber and Alan Zibel in Washington contributed to this report.
Today I’m reading reports of interest rates at 4.375% for a 30-year fixed loan and 3.875% for a 15-year fixed loan. These are incredible rates! Call me if you’d like to discuss your real estate possibilities. I’m happy to be of service in making your dream come true.
Home sales in the Twin Cities housing market took another dip as the hangover from the tax credit expiration continued. For the week ending May 22, there were 624 pending sales, a precipitous drop of 42.5 percent from a year ago.
The biggest drops in sales since the credit ended can be seen in the traditional seller market (i.e., anything that’s not a foreclosure or short sale) and in the middle price ranges from $150,000 to $350,000. Pending sales have dropped in those ranges from 1,085 the week the credit ended to 384 for the week ending May 22. In sum, it may be a difficult summer market for home sellers.
The good news is that new supply is also slowing, which means the market
is already self-correcting to avoid a surge in unneeded inventory. New listings fell to 1,581 for the same reporting week, a decline of 15.8 percent from this time last year.
The Supply-Demand Ratio has been updated for June and shows a figure of 5.05, which means there are 5.05 homes for sale for each buyer in the month. That’s a 10.9 percent increase over the mark seen a year ago and is a result of the decline in buyer activity.