Even with temperatures cooling, the Twin Cities housing market remained in its summer swelter of a holding pattern for the week ending August 28. Signed purchase agreements topped off at 636, continuing a sub-700 trend that has gone on for 15 weeks in a row. Prior to that, we had 15 weeks in a row of 700 or more pending sales per week.
Think about that for a minute. There were more pending sales in the metro during the first full week of February than in the last full week of August. And last year at this time, we were consistently hitting 1,000 or more pendings throughout the summer.
All of this adjustment firmly points to the federal tax credit for first-time home buyers that was in full swing both at this time last year and during the winter and spring months of this year. We have returned to a world void of juicy government incentives.
The number of homes for sale has grown to 27,271, up 8.6 percent from the prior year. Increased supply plus declining demand has caused the Supply-Demand Ratio to grow 56 percent in one year's time. This boils down to greater opportunity for buyers and increased challenges for sellers. You're probably used to hearing that by now. We're certainly used to saying it.
The Twin Cities Housing market has seen some impressive highs and puzzling lows this year. Unfortunately, the lows have persisted through summer, despite low interest rates and a diverse and affordable housing stock.
Although New Listings are about where they were last year (near 1,600), Pending Sales remain as low as they've been all summer. The week ending August 14 bore just 631 signed purchase agreements, down 38.5 percent compared to last year. The three-month total for pendings is 8,018 compared to 13,830 last year, which is an even heftier decline of 42.0 percent.
Active Listings are up to 27,784, 8.1 percent more than last year. Growing inventory is not the result of too many homes coming on the market but rather a product of not enough homes going off the market. With Months Supply of Inventory now at 7.8, it still remains a buyer's market out there.
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 Mark Allen (Chief Executive Officer, Minneapolis Area Association of REALTORS®), audio recorded by Zach Foty and video produced by Chelsie Lopez.
Wednesday August 11th, 2010
Rogue Housing Market Still Recalibrating to the New Abnormal
The Twin Cities housing market has found itself in a bit of a holding pattern in recent months, and July is no exception. The $175,000 median sales price was a 2.3 percent increase over July 2009. Pending sales in July were down 37.6 percent compared to last year, which is certainly less than ideal but expected. Due to weakened buyer demand, inventory grew modestly to 27,249 active listings, an increase of 5.4 percent over last year.
Demand has stabilized and should slowly return in the coming months. We hope that it returns to the market before prices have a chance to respond to the growing inventory.
Traditional sellers enjoyed a 5.0 percent price increase to $222,500, foreclosure prices remained flat at $119,000 and short sales posted a 3.5 percent price gain to $147,000. The traditional and foreclosure submarkets had a significant decline in pending sales, while short sales actually had a small increase.
There were 3,226 signed purchase agreements in July, a decrease of 1,948 contracts from last July. Seller activity also slowed, with 6,926 new properties coming onto the market.
All active listings experienced a minor spike. The supply-demand ratio increased 63.5 percent to 8.64, primarily due to declining demand and not a surplus of new product. This means that there are about 8.6 homes available per buyer for August.
Although the tax credit ended over three months ago, its negative externalities are finally beginning to pass. March and April enjoyed a big boost in sales performance at the cost of May, June, July, and most likely several additional months.
The economy is currently driving the housing market and not vice versa. The housing sector once generated corresponding construction, manufacturing and other jobs which in turn fueled economic growth. That hasn't been the case of late.
For the week ending July 31, New Listings in the Twin Cities region were down 4.3 percent from last year, with 1,566 new properties coming onto the market. Pending Sales were down 34.3 percent from a year ago, as 651 purchase agreements were signed.
Over the last three months, there have been 13.4 fewer new listings than there were during the same period a year ago and 38.7 percent fewer pendings. This means increasing inventory. There were 27,627 Active Listings for Sale as of August 9, up 6.6 percent from the same point in 2009.
The growth in inventory, combined with slowed sales demand, means that the number of homes available per buyer in August has jumped to 8.64, up dramatically from the mark of 5.28 seen a year ago.
Whether May or June or July, we're finding it difficult to report anything new to you for the warm weather months of 2010. Week-in and week-out, we're showing a recurring pattern of behavior in the Twin Cities housing market, and the week ending July 24 isn't much different. Pending Sales are at 628 for the week, down 37.8 percent compared to last year, and Active Listings for Sale are at 27,661, up 5.4 percent.
These percentage changes represent a bit of a holding pattern. In fact, we've been here since the expiration of the tax credit. There was a minor bump in Active Listings but it wasn't sufficient to convince us that we're heading toward another oversupply situation.
Days on Market and Months Supply of Inventory continue to indicate a favorable market for home buyers. But with interest rates remaining at historic lows, there appears to be no sense of urgency. We may see a minor kerfuffle in the market before the school year begins, but 1,000-plus pendings per week in August doesn't seem likely, let alone 800.
It’s been almost 3 months since the expiration of the federal home buyer tax credit and the market appears to have settled into something of a rhythm. With the dust settling, pending sales have become mostly fixed in the 500-to-600 per week range for the past 9 weeks.
While the dramatic drop from a year ago is certainly not positive, demand is at least holding relatively steady for the time being. The 626 purchase agreements signed for the week ending July 17 were 39.7 percent behind a year ago.For the same reporting week there were 1,618 new listings in the Twin Cities, down 10.0 percent from a year ago.
Inventory is rising due to slower demand. The 27,350 homes currently available for sale represent an increase of 4.8 percent from last year.
For the week ending July 10, the number of pending sales held steady with the week before but remained well behind last year's pace. The 545 signed agreements during the week represent a drop of 45.9 percent from last year at this time. That's the tenth consecutive week of year-over-year declines in buyer demand, a period that coincides with the loss of the federal tax credit for first-time home buyers.
The 1,542 new listings for the most recent reporting week are also down compared to last year but not to the extent of pendings, posting a decline of 17.4 percent from a year ago.
Inventory is up 4.4 percent from a year ago. Because the growing inventory is being greeted with slim buyer demand, the balance of buyers and sellers is shifting the market back in the buyer's favor. The July Supply-Demand Ratio of 7.44 means that there are 7.44 houses for each buyer this month, up 46.9 percent from the mark of 5.06 seen a year ago.
The post-tax credit malaise continues as the Twin Cities housing market comes to grips with the new normal. Pending Sales for the week ending June 26 were down 47.6 percent versus 2009 numbers from 1,121 a year ago to 587 now. New Listings are also down from a year ago, though not to the same extreme as Pending Sales, only dropping 6.5 percent from a year ago.
With demand weakening faster than new supply, the inventory of available homes is starting to grow. The current count of 27,526 homes is 3.2 percent higher than at this time last year.
The slight growth in total inventory is happening in the face of dropping demand, which means that the balance between buyers and sellers is shifting back in the buyer's favor. This is reflected in July's Supply Demand Ratio of 7.44, which was a ginormous 46.9 percent over last July and means that there are 7.44 homes available for each buyer during the month of July.
Pending sales in the Twin Cities housing market trended up for the first time in four weeks but remain substantially below 2009. For the week ending June 12 there were 674 signed purchase agreements, up from the mark of 527 the prior week but down dramatically from the mark of 1,210 seen during the same week a year ago.
This may be a sign that the drastic drops in sales seen in May and early June were simply temporary aftershock reactions to the tax-credit build up and that demand will slowly return over the course of the summer, but it’s far too early to say that with any certainty. We’ll be keeping a close eye on the numbers each week.
New listings moved upward for the same reporting week to 1,729, but remain 12.2 percent behind last year at this time. However, inventory has slowly climbed due to the decline in pending sales, currently sitting at 26,990 active listings, an increase of 1.1 percent from a year ago.
Remember how we've been saying that the Twin Cities housing market has been getting successively slower in home sales every week since the tax credit ended? Umm, yeah, well that's still happening.
Pending sales for the week ending June 5 were 57.0 percent behind the pace seen a year ago, dropping from 1,226 in 2009 to 527 today. This is the fifth consecutive week-to-week drop in signed contracts. While activity is down across the board, lender-mediated foreclosures and short sales are slowly increasing their market share of sales because traditional home sales have declined sharply. During this week last year, 37.8 percent of pending sales were lender-mediated; this year the share is 43.3 percent.
Thankfully, new supply is not growing in lock-step. The 1,521 new homes placed on the market for the most recent reporting week were 29.6 percent less than last year at this time. This has helped keep the Months Supply of Inventory metric at 6.9 months, down 9.3 percent from May 2009.
As the weeks following the tax credit expiration unfold, buyer demand continues to slow. The 600 purchase agreements signed for the week ending May 29 were 34.6 percent below the previous year—the fourth consecutive week of year-over-year decline in Pending Sales.
Refreshed supply is also in decline, as New Listings posted a fifth consecutive week of year-over-year decline, landing at 1,474 for the most recent reporting week—a 5.9 percent decrease from a year ago.
Two other metrics for this week:
Days on Market – This stat continues its year-over-year downward trend, resting at 118 days for May 2010.
Percentage of Original List Price Received – This continues to grow, up 2.8 percent above last year at this time to 94.1 percent of the list price.
As expected, pending sales continued their post-tax credit deadline swoon in the Twin Cities housing market for the week ending May 15. There were 830 purchase agreements signed for the week, a large drop from the mark of 1,469 seen two weeks ago during the final week of the credit. The most recent week represents a 32.8 percent decrease from the same mark last year.
New Listings are also in decline, with the 1,582 posted for the week coming in at 19.3 percent behind a year ago. The decline in new supply is helping to offset some of the decline in sales, which is serving to hold inventory relatively steady for the time being.
It remains to be seen whether the large drop in activity is a temporary post-credit blip or a harbinger of a longer-term demand cool down. We'll continue to keep a hawk's eye on the numbers in the weeks ahead.
The expiration of the tax credit clearly motivated buyers to take action by April 30. Last week, there was a significant 31.2 percent jump in Pending Sales versus last year, bringing the total number of contracts written to 1,469. But for the first time this year the number of New Listings was down. A total of 1,803 of them entered the market, 11.5 percent lower than a year ago.
Some encouraging figures include a Days on Market count of 127, down 15.3 percent compared to last year, and Percent of Original List Price Received at Sale of 93.6 percent, up 4.0 percent over last year.
We expect buyer activity to continue over the coming weeks, although not with the same level of urgency due to the expired tax credits and a slight seasonal lull before we get into the heart of summer.
A bill that would allow homeowners who install energy-saving devices to claim rebates cleared the U.S. House of Representatives on Thursday, and now heads to the Senate for a separate vote. Full Story: Market Watch (may require free registration)
Tuesday May 4th, 2010
Weekly Market Report 5.03.2010
Well, the federal home buyer tax credit we've been talking about for the last 18 months has finally expired. All good (or bad, depending on your opinion) things must come to an end. Unfortunately, we won't have definitive evidence of how wild the final days of the credit were for another week as we wait for activity to be recorded in the MLS system.
In the meantime, we can still see that home sellers were far more active than home buyers for the week ending April 24, continuing a recent trend. There were 2,147 new listings during the week, an increase of 19.1 percent from a year ago. That's the seventh week of the last eight to show double-digit percentage increases in new listings.
Signed purchase agreements were also up but in a less extreme fashion. The 1,184 pending sales for the week were a 9.8 percent increase from a year ago.
As a result of the growth in new listings, we're projecting that the Supply-Demand Ratio for May 2010 will be 5.69 homes per buyer, a healthy balanced number but a smidge higher than the 5.23 mark of May 2009. Why point out such a subtle difference? Because that would be the first time we have seen a year-over-year increase since June 2008.
Home Prices Continue to Stabilize as Oversupply Issue Improves
For the third consecutive month, home prices in the Twin Cities 13-county metropolitan area showed a year-over-year increase. We haven’t seen three consecutive months of progressively increasing year-over-year growth since June 2004.
The March median sales price of $165,000 was a healthy 7.1 percent increase from $154,125 last March. That’s the strongest year-over-year increase since May 2005. Part of the reason for the stronger upward movement is that a lower share of home sales are foreclosures as compared to last March. Short sales are another story.
"There are definitely some promising indicators and several positive trends at this time," said Brad Fisher, President of the Minneapolis Area Association of REALTORS® (MAAR). "However, we need to keep a close eye on several submarkets, including short sales, new construction, and high-end properties."
The median sales price of traditional homes (excluding foreclosures and short sales) in March was $199,900, down $11,600 or 5.5 percent from $211,500 last March.
Foreclosures posted a slight 0.3 percent increase to $118,000, while short sale properties posted a 2.0 percent decline to $147,000. Although short sales have become the new problem child on the block, the 10.0 percent decline in bank-owned new listings after a period of unprecedented growth is good news for everyone.
There were 5,051 signed purchase agreements in March, an increase of 14.6 percent from a year ago. The spring market continues to have a flurry of activity as we approach the April 30 deadline for the federal home buyer tax credit. Home sales are expected to continue to increase as buyers move to take advantage of this substantial market incentive.
This increased buyer activity has brought inventory down and restored some sense of equilibrium to the market. April’s supply-demand ratio of 4.39 means that there are 4.39 homes available per buyer for the month. In March 2008, that mark was 8.16. While the rate of inventory decline has been slowing in recent months, supply and demand is far more balanced than it was two years ago. This is a critical sign that the market is correcting oversupply.
"The oversupply issue has corrected in much of our market, and that has led to price stabilization," said MAAR President-Elect, Pat Paulson. "This provides reason for cautious optimism."
The Twin Cities housing market continues its spring dance as the 2010 weekly numbers outpace the equivalent weeks of 2009. New listings for the week ending March 27 were at 2,240, 29.4 percent higher than during the same week last year.
Pending sales are up 13.8 percent over last year, and we once again broke the magical "1,000 margin" with 1,049 purchase agreements.
A stat to start watching closely is the ever-shrinking Supply-Demand Ratio. The ratio is squatting at 4.39 homes per buyer. That's a lot less inventory than we've seen in recent years, indicating that buyers need to move quickly to get the home they want, especially in the lower price ranges where homes are selling the quickest.
The local housing market continues to mimic spring growth, as Twin Citizens emerge from their wintry cocoons just in time for the final days of the home buyer tax credit. For the week ending March 20, there were 2,277 new listings, up 28.8 percent from a year ago and marking the seventh consecutive week of strong year-over-year increases.
Pending sales dropped a bit from their high the previous week, but the 950 signed purchase agreements for the week were 10.2 percent ahead of where they were at this point last year.
As the tax credit's April 30 deadline looms, expect a flurry of home sales activity. Time will tell what happens when the credit has expired, but the next few weeks should be extremely active.
The $6,500 tax credit for move-up buyers appears to be stimulating some sellers to place their homes on the market in an attempt to sell them before the credit expires. For the week ending March 6, there were 2,279 new listings, an increase of 24.6 percent from a year ago. Every price range is seeing increased listing activity except for the two ends of the price spectrum: below $120,000 and above $1 million.
For the same reporting week, there were 809 accepted offers, which is a decline of 6.9 percent from a year ago. Over the last three months, pending sales have been just 2.0 percent higher than during the same period a year ago.
As a result of the strong new listings and flat pending sales, the inventory of available homes is rising faster this spring than it did last year. While there are still 8.2 percent fewer homes for sale right now than there were a year ago, that's a much smaller year-over-year decline than we've seen over the last two years.
Warming weather, affordability and approaching deadlines are activating the housing market. With less than 60 days left until the home buyer tax credit expires, buyers and sellers appear to be kicking it into a new gear. There were 1,715 new listings for the week ending February 27, an increase of 5.3 percent from a year ago and the fourth consecutive week of year-over-year increase. The $6,500 tax credit for move-up buyers appears to be stimulating some sellers to place their homes on the market in an attempt to sell them before the credit expires.
For the same reporting week, there were 868 accepted offers, which is a bump of 13.9 percent from a year ago. After several months of relatively flat home buying, the last two weeks have seen a jump as the credit deadline nears.
Days on Market continues to decrease, landing at 142 days in February. That was a 9.7 percent decrease from a year ago.
The Percent of Original Price Received at Sale stood at 92.3 percent in February, a 3.4 percent increase over the year prior.
Over the last three weeks, the number of new listings has grown at a stronger pace than we saw in 2009. For the week ending February 20, there were 1,833 new listings, an increase of 17.7 percent from a year ago. The recent uptick is likely a combination of the typical spring increase in activity coupled with the effects of the $6,500 tax credit available to move-up buyers. Consumers who have lived in their current residence for 5 of the last 8 years are eligible to receive the credit when they purchase a home before April 30.
Also for the week ending February 20, pending sales made a 9.9 percent year-over-year jump after staying even with last year for several consecutive weeks.
The Supply-Demand Ratio for March is 5.39, which means there are 5.39 homes available for each buyer. That's 6.9 percent below last year's number and is another indication of dwindling supply.
The Twin Cities housing market in early 2010 looks pretty much like it did in early 2009. How similar? Over the last three months, there have been 7,189 signed purchase agreements; there were 7,186 a year ago during the same time period. Eerie, no? Robotic precision.
For the week ending February 13, there were 711 pending sales, down 2.7 percent from last year, and new listings posted 1,764 units, up 4.9 percent from a year ago. The only thing that's really changed much is the supply of available homes, which continues to dwindle relative to a year ago. The current stock of 22,271 available homes represents a 12.4 percent decline from a year ago.
WASHINGTON—U.S. home construction and industrial production both rose in January, government reports showed Wednesday, providing further evidence of the economy's gradual recovery.
Housing starts climbed 2.8% to a seasonally adjusted 591,000 annual rate compared with the prior month as builders recovered from a bout of bad weather, the Commerce Department said. However, new building permits dropped, a sign the housing sector is improving slowly.
The Twin Cities housing market at the beginning of 2010 continues to look similar to the Twin Cities housing market at the beginning of 2009. There were 1,848 new listings for the week ending February 6, a 3.8 percent increase from the same week last year. On a similar track, there were 780 pending sales for the same week, 4.7 percent above last year.
With supply dropping—now at 5.5 months of availability—it may be that potential buyers are all too familiar with the inventory they have to choose from, especially in the lower price ranges where sales have been through the roof in the last year and inventory has dropped quickly.
We sent out a news release last week. Highlights are given below in top 10 format because a lot of fancy communications experts say that you're more likely to look at data when presented in a top ten list. David Letterman has built a career around this notion
After 41 consecutive months, the Twin Cities housing market finally posted a median sales price that was higher than the same month a year ago.
The January median sales price of $157,000 was a 1.3 percent increase from last January's mark of $155,000. That's the first year-over-year increase since July 2006.
The median sales price of traditional homes (excluding foreclosures and short sales) in January was $198,000, down 7.9 percent from a year ago.
Lender-mediated properties posted a January figure of $125,000, an increase of 3.3 percent from a year ago.
There were 2,736 signed purchase agreements in January, a dip of 3.2 percent from a year ago. That's the second consecutive month of year-over-year decline in pending sales, though the declines have been small to this point.
The Federal Home Buyer Tax Credit and extremely low mortgage rates have been the two main drivers of the market's recent momentum and, unfortunately, both of those market boosters may be near their eventual end.
The tax credit expires on April 30 and likely will not be extended.
The Federal Reserve intends to stop buying mortgage-backed securities in the near future, a move that will likely lead to an increase in mortgage rates.
Unless the end of the tax credit and actions by The Fed are effectively offset by other economic improvements, we can expect downward pressure on home sales in the months ahead.
A lot of progress has been made in the last year, but the recovery process isn't over.
As winter continues its streak of cold and snow, sales activity in the Twin Cities housing market is moving along at a pace you'd expect for the season and at about the same pace as a year ago. Pending sales for the week ending January 30 came in at 650, down very slightly from the mark of 673 seen during the same week last year. Over the last three months, there have been 7,038 signed purchase agreements, up a sliver-sized 0.7 percent from a year ago.
Despite the tax credit being made available to current homeowners, new listing activity has yet to show any noticeable jump. The 1,584 new listings for the most recent reporting week represent a dip of 3.1 percent from a year ago. Total inventory of available homes is still down from last year by 16.5 percent.
In related news, Days on Market Until Sale is still dropping while the Percent of Original List Price Received at Sale is still growing. While that's good news on both fronts for home sellers in general, different price points and neighborhoods are experiencing dramatically different market conditions.
Click here for the full Weekly Market Activity Report.
Tuesday February 2nd, 2010
Weekly Market Report 2.1.2010
From The Skinny
The January 2010 Twin Cities housing market has shaped up to be nearly identical to January 2009.
Pending sales are down slightly from a year ago, but not by much.
New listings are down slightly from a year ago, but not much.
Inventory is rising slowly, but not much.
After the roller coaster ride the local market has experienced over the last four years, perhaps "not by much" is a welcome respite.
There were 558 signed purchase agreements for the week ending January 23, down 2.3 percent from a year ago.
New listings posted 1,522 units, down 0.6 percent from a year ago.
The current inventory of active listings is 20,629, down 17.5 percent from a year ago.
The February 2010 Supply-Demand Ratio sits at 6.99, which means there are 6.99 homes available for each buyer. That's a drop of 8.5 percent from a year ago and the lowest February mark since 2006.
The first full week of reporting for the Twin Cities housing market is in and while there are a few "green shoots," it's becoming clear so far that the market won't see the same spectacular growth in sales it saw at the beginning of 2009.
There were 520 pending sales for the week ending January 9, down 1.7 percent from the same week in 2009. That's the seventh week of the last nine to see fewer sales than the prior year, a time period that coincides closely with the initial expiration date of the first-time home buyer tax credit. However, we’re still 21.2 percent higher than the pace in 2008 for that period.
As you likely know, the credit's been expanded to include a $6,500 incentive for buyers who have owned a home for five years of the last eight. Since we can safely assume that many of these buyers will need to sell their home first before buying a new one and receiving the credit, we can look to our new listings numbers to see how much effect the new credit is having. So far, it doesn't appear to be much.
Over the last three months, the number of new listings has been 11.7 percent behind the same period one year prior. With many looking for continued "seedlings" of hope in the local housing market, this isn't welcome news. As always, we'll be keeping a close eye on things and reporting back what we see.
The January 2010 Housing Supply Outlook just hit the internetz. As usual, here's some quick takeaways on key market conditions.
5. Its a magic number. The last time there was only 5.0 months of supply or less in the Twin Cities housing market, the month was March of 2006. George Bush was president, Kanye West was known more for his talent than his eccentricities and the market was on the cusp of a 24-month slide in home sales and prices. Flash forward to January 2010, and we're back down to 5.0 months of supply.
The biggest drops in supply can be found the lower price ranges, where homes are selling quickly. For perspective, there's only 2.6 months of supply under $120,000, while there's 30.2 months of supply above $1 million.
Home prices are still soft across the board, but the largest declines in price in 2009 can be found in the condominium segment, where the average sales price for the year was 17.1 percent lower than in 2008.
The last week of 2009 found the Twin Cities housing market singing "Auld Lang Syne" and taking a breather. For the first time in four years, the active listing inventory dropped below 20,000. Chiming in the New Year at 18,980, inventory is at its lowest point since April 2005 and is 22 percent below last year at this time. Also of note, January's Supply-Demand Ratio of 6.69 houses per buyer is 20.6 percent behind a year ago.
New listings for the week ending December 26 dropped 18.9 percent from last year to 446. The 392 purchase agreements for the week were up a merry 53.1 percent above the previous year; while a significant jump, this reflects a small sample size.
We expect 2010 to begin slowly as car starting becomes more important than house hunting during the frigid conditions we're presently experiencing in the metro area.
The post-Thanksgiving bump is in effect for the Twin Cities housing market. The week ending December 5 saw pending sales swing upward from the previous week by 152 to settle at 551. This is 7.7 percent less than last year at this time, marking the third week of the last four to post pending sales numbers lower than a year ago. The aftermath of the tax credit's initial expiration date is combining with the typical holiday slowdown to bring sales down.
Two other important metrics:
Months Supply of Inventory – At 5.7, this is the lowest MSI in more than two years and a full 32.9 percent below last year. This bodes well for sellers in general, but the higher price ranges are still buyer's markets.
Housing Affordability Index – At 207 and improving, this is welcome news. This means that the average family income in the Twin Cities region is 207 percent of what it takes to qualify to purchase the median priced home.
Extremely heavy buyer activity and shrinking inventory led to strengthening Twin Cities home prices in November.
The November median sales price of $170,000 was a slight increase from October—a rare occurrence in this month that typically marks the beginning of a temporary winter price swoon. This mark is 2.9 percent behind last October, the lowest year-over-year price decline in more than two years.
This is the surest sign we've seen yet that we're on recovery road. We've seen sales growing for almost a year and a half, and prices are starting to reflect that, particularly in the lower price ranges.
The median sales price of traditional homes (excluding foreclosures and short sales) in November was $190,000, down 15.6 percent from a year ago. Since a heavy share of buyers in November were likely first-timers who typically buy in the more affordable price ranges, prices in the traditional segment have been weighted downward. Foreclosures posted a November figure of $127,500, up 2.0 percent from a year ago, while short sales prices were at $143,500, down 15.6 percent from a year ago.
There were 2,987 signed purchase agreements in November, a big dip from October due to seasonal trends and to the tax credit's initial expiration date. That's still up 10.2 percent from a year ago—the 17th consecutive month of year-over-year increases in pending sales. Closed sales posted a whopping 67.0 percent jump from a year ago, again due to the tax credit.
The Months Supply of Inventory has dropped to 5.7 months, the lowest mark since April 2006. Traditional homes have 7.6 months of supply, foreclosures have 1.4 months and short sales have 12.8 months.
Supply is dropping in the traditional and foreclosure markets. Short sale supply is stagnant because of the headaches involved in purchasing them. The process needs to improve, but industry and government efforts that are coming soon could help.
Tuesday December 8th, 2009
Weekly Market Report 12.07.2009
From The Skinny
The local housing market experienced the traditional Turkey Day drop off for the week ending November 28 as Twin Citizens focused more on turkey and stuffing than purchase agreements and closing dates.
Even taking into account the expected holiday drop, market activity in the last few weeks has slowed considerably from the breakneck pace we saw during the first 10 months of the year, likely due to the passing of the home buyer tax credit’s initial deadline. There were 5.9 percent fewer pending sales compared to the same week in 2008. That’s only the second week of year-over-year decrease in all of 2009 (the first was two weeks earlier).
Now for the good news: Days on Market before Sale dropped 14.5 percent to 127, and the Percentage of Original List Price trended positive over last year to 94.3. These two metrics should shore up sellers who are weathering the current economic storm.
When compared to the previous week's dive, pending sales held strong during a time of typical seasonal swoon. For the week ending November 21, there were 604 purchase agreements, a 5.2 percent increase over the same week in 2008 and the first time in a month not to show a week-over-week plunge in sales activity.
Although sales are up over last year, they have slowed considerably from October's tax credit gold rush. With the winter season before us, sales will likely continue their respite into 2010.
The Twin Cities housing market continues to post strong pending sales figures as fall progresses. For the week ending October 31 there were 826 pending sales. That’s down from the week before but 42.9 percent greater than the same week last year.
The extension and expansion of the tax credit means that first-time home buyer activity will remain strong, but don't bank on the same blockbuster numbers we have seen this year. If you were a potential first-time home buyer who was qualified to purchase in 2009, odds are good that you already bought. The fact that the income limits have been raised for eligibility does help since it widens the credit's availability.
The $6,500 credit for second-time buyers will spur some sellers to put their homes on the market who had previously been on the fence. New listings will likely strengthen this winter and into early 2010 as a result.
Some updated numbers for this month:
Days on Market is still shrinking, down to 128. That’s 9.4 percent below last October
The Percent of Original List Price Received bumped up to 94.6.
The Housing Affordability Index increased to 202, up 25.5 percent increase over 2008.
This bill not only extends the existing tax credit but it offers a $6500 tax credit to current homeowners. For a brief overview of the bill go to: National Association of Realtors.
Monday November 2nd, 2009
Homebuyer Tax Credit Extension Vote
From The New York TImes
Call it a mini-stimulus.
Senate Democrats say they finally have their procedural ducks in a row to pass an extension of unemployment benefits as well as some tax breaks that backers hope will help the economy.
After weeks of delays because of a fight with Republicans over amendments, Senator Harry Reid, the Nevada Democrat and majority leader, said he expects the Senate this week to approve an extra 14 weeks of unemployment aid for those who have exhausted their benefits. People out of work in states where the unemployment rate is more than 8.5 percent would get up to 20 weeks.
"We have a million people - one million people - who are eligible for this," Mr. Reid said.
In addition to the unemployment aid, the measure would keep alive the $8,000 tax credit for first-time homebuyers that is scheduled to expire at the end of the month. Under a bipartisan agreement, people who have lived in their current home for at least five years would also become eligible for a new $6,500 tax credit if they buy a new house.
KARE11 Extra 10-26-09 - Short Sales in the Twin Cities
KARE11 had a segment on short sales. Very good explanation.
Wednesday October 28th, 2009
Weekly Market Report 10.26.2009
From The Skinny
The end of the first-time home buyers tax credit looms just 30 days beyond a Halloween horizon, and home sales remain strong in the lead-up to tricks and treats and the impending tax credit DEADline. For the week ending October 17, there were 954 signed purchase agreements, howling upward 54.4 percent from a year ago. Almost two-thirds of these pending sales were priced below $190,000—evidence that first-time buyers are carrying a heavy share of the activity.
The strong sales we've seen over the last 15 months mean that our inventory of available homes has shrunk like the heads in a witches' brew. The 23,896 homes on the market right now represents a 21.2 percent decrease from the decidedly more scary market of 2008, and it is the lowest mark at this point in the year since 2004.
Expect home sales to begin dropping as tax credit qualifiers finish their mad rush to the closing table, but unlike those camp counselors at Crystal Lake, we'll all make it out of this market alive.
According to this Associated Press report, the White House is concerned about the over all cost.
WASHINGTON — Key congressional leaders want to extend the tax credit for first-time homebuyers beyond its scheduled end-of-November expiration despite complaints of fraud and Obama administration concerns about the costs.
Housing and Urban Development Secretary Shaun Donovan says the administration is not sold on the idea. For the past several weeks, Obama administration officials have been talking about possibly extending the credit to help spur the economy and create jobs. But at a congressional hearing Tuesday, Donovan said the administration needs better cost estimates."To truly understand the costs, we will not know that until Americans have filed their tax returns," Donovan told the Senate Banking Committee. "We believe it's critical to have the information necessary to make a fully informed decision about the costs."
The fall Twin Cities housing market has been full of wild things, mostly first-time home buyers stampeding to take advantage of the federal tax credit before it expires on November 30. The week ending October 10 was no different than others we've seen this fall. There were 947 signed purchase agreements for the week, a 37.6 percent increase over the same week last year.
At 1,543 new listings we're down 4.4 percent from the same week a year ago. The trend continues: New listings haven't been keeping up with the amount of sales, bringing total housing supply down dramatically in the Twin Cities. There are currently 24,901 homes on the market, 21.0 percent less than a year ago.
The rumpus is likely to subside as we near the November 30 tax credit deadline, silencing the sales activity of the market's most active buyers.
Autumn may be bringing colder temperatures (and snow, too: what’s up with that?!?) but the Twin Cities housing market is still hot. Contrary to the typical fall slowdown, pending sales are gaining weekly momentum as home buyers take advantage of the final days of the Federal tax credit.
For the week ending October 3, signed purchase agreements were a stunning 61.2 percent higher than last year, jumping from 647 to 1,043. New listings are a different story, however, down 8.0 percent below the previous year. Total active listings remain sluggish compared to a year ago, with the 24,354 on the market representing a 20.9 percent drop from a year ago.
There are some new stats this week that help bring some perspective on just how much better things have gotten for sellers in the last year:
Days on Market Until Sale: at 129 days is 11 percent below last year.
Percent of Original List Price Received at Sale: at 93.9 percent is 1.8 percent higher than last year.
Months Supply of Inventory: at 6.6 is 30.5 percent lower than last year and inching closer to a balanced market.
All three indicators are important reflections of market shift. However, we can’t minimize that sellers still face tough conditions, especially in the higher price ranges where sales are still on a downward trend.
Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.87 percent with an average 0.7 point for the week ending October 8, 2009, down from last week when it averaged 4.94 percent. Last year at this time, the 30-year FRM averaged 5.94 percent. The last time the 30-year FRM was lower was the week ending May 21, 2009, when it averaged 4.82 percent.
Great article from the Minneapolis Area Associaton of Realtors® The Skinny
Tick Tock On The Tax Credit Means More "Last Call" Buyers
Buyer activity took a step up in September as the final days of the federal tax credit for first-time home buyers ticked toward a November 30 deadline, contrary to the typical September slowdown in the Twin Cities housing market.
There were 4,986 signed purchase agreements during the month, up 23.5 percent from a year ago—the 15th consecutive month of year-over-year increases in pending sales. Since first-time home buyers don't typically go high end, a healthy portion of these sales are taking place in price ranges below $200,000.
The influx of new buyers has helped home prices increase over the course of the year. The September median sales price of $170,000 represents a slight dip from the prior month, but the dip is less extreme than what has been typical. Compared to last September, it's a 10.5 percent decline—the lowest year-over-year decline in 17 months.
The median sales price of traditional homes in June was $200,712, down 5.3 percent from a year ago. Lender-mediated homes posted a May figure of $127,000, down 12.4 percent from a year ago. Lender-mediated foreclosures and short sales made up 39.2 percent of the month's pending sales.
Foreclosures are being sold roughly three times more frequently than short sales, thus the inventory of available foreclosures is dropping more quickly than short sales.
