After two-plus years of a faltering market, a recent upswing in Twin Cities homes sales during the second half of 2008 is cause for some measured optimism heading into 2009. In the Twin Cities 13-county metro area, total pending sales for 2008 ended at 44,067, up 1.2 percent from 2007. This is the first year-over-year increase in pending sales since 2004. There were 38,746 closed home sales in 2008, down only 3.5 percent from 2007.
In the second half of the year, sales picked up momentum and haven't let up since due to tumbling mortgage rates and increased affordability. Since July, there have been 15.7 percent more pending sales than there were during the same time period last year, and the most recent month saw a year-over-year increase of almost 30 percent.
Home prices continued to decline, as expected. The overall 2008 median sales price was $195,000, down 13.3 percent from last year's mark of $225,000.
Reasons for this decline can be found by dissecting two unique segments in today's housing market: lender-mediated and traditional. In 2008, the median sales price of lender-mediated foreclosure and short sale properties was $145,000, a drop of 13.4 percent from 2007. The median sales price for traditional properties was $223,000, which was a much quieter decline of 4.1 percent from last year. In all of 2008, 31.7 percent of closed sales in the region were lender-mediated, up from 10.4 percent in 2007.
The number of new listings on the market during 2008 decreased by 10.9 percent compared to last year, a drop of over 10,000 listings from last year and the lowest showing since 2003. This has helped stem the tide of oversupply our market has been experiencing in recent years.
The number of new foreclosure and short sale listings in the fourth quarter of 2008 was actually 4.3 percent lower than the third quarter, which is the first downward quarterly movement in new lender-mediated listings since 2003.
Wednesday, January 21, 2009
Wednesday, January 14, 2009
Hello 2009
The New Year rang in with the normal post-holiday increase in new listings, but listings are still down from the same week last year. Pending sales for the week ending January 3 showed a strong increase during the year-end transition, rising nearly 40 percent compared to last year. Over the last three months of the year, pending sales were 18 percent higher than last year. Local housing inventory has reached its annual low point but looks to rebound in the opening months of 2009.
This week's edition of the MAAR Weekly Market Activity Report features updated figures from several important metrics:
• In December, Days on Market Until Sale dropped 6.3 percent compared to last year. The market appears to have reached a plateau in the amount of time needed to sell a house, and this welcome decline certainly could continue into the next year.
• Percent of Original List Price Received at Sale closed at 90.0 in December, 1.3 percent lower than last year.
• The new Housing Affordability Index (HAI) for January is extremely positive. Last month we stated that the HAI of 180 was the highest we had ever recorded. Now it's even higher, jumping an additional 12 points to 192. The rise reflects the help that interest rates and softer prices have given to the market. (Note: The decline in prices is driven by the significant amount of lender-mediated home sales and its benefit is not equal to all buyers.)
This week's edition of the MAAR Weekly Market Activity Report features updated figures from several important metrics:
• In December, Days on Market Until Sale dropped 6.3 percent compared to last year. The market appears to have reached a plateau in the amount of time needed to sell a house, and this welcome decline certainly could continue into the next year.
• Percent of Original List Price Received at Sale closed at 90.0 in December, 1.3 percent lower than last year.
• The new Housing Affordability Index (HAI) for January is extremely positive. Last month we stated that the HAI of 180 was the highest we had ever recorded. Now it's even higher, jumping an additional 12 points to 192. The rise reflects the help that interest rates and softer prices have given to the market. (Note: The decline in prices is driven by the significant amount of lender-mediated home sales and its benefit is not equal to all buyers.)
Monday, December 15, 2008
The housing market is going into hibernation mode.
As fall turns into winter—and winter turns dark and cold—activity in the Twin Cities housing market has entered its annual hibernation. On a weekly basis, new listings, total inventory and sales are all declining as consumers batten down the hatches and prepare for the holidays. Relative to this time last year, however, activity is stronger. For the week ending December 6, there were 597 signed purchase agreements (pending sales), which is up 27.6 percent over the same week last year. Roughly half of these sales—54.7 percent—were lender-mediated foreclosures or short sales.
On the supply side, new listings were relatively flat, up only 0.7 percent for the same time period comparison. The total supply of homes for sale currently sits at 27,035, down 8.2 percent compared to this time last year. Expect the decline in overall supply to continue into January. At the same time, expect the lender-mediated market share of that supply to increase.
On the supply side, new listings were relatively flat, up only 0.7 percent for the same time period comparison. The total supply of homes for sale currently sits at 27,035, down 8.2 percent compared to this time last year. Expect the decline in overall supply to continue into January. At the same time, expect the lender-mediated market share of that supply to increase.
Tuesday, November 25, 2008
Most homes sales are lender mediated (foreclosures)
Weekly Market Activity Report
For 19 weeks out of the past 20, pending sales have been higher than during the equivalent week in 2007. There were 649 pending sales for the week ending November 15, up a healthy 19.1 percent from the same week last year. Of these newly signed purchase agreements, 53.5 percent were for lender-mediated foreclosure or short sale properties and 41.9 percent were listed at $150,000 or below. Over the last three months, there have been more than 25 percent more pending sales than during the same time in 2007. A healthy portion of these sales have been in the lower price ranges.
On the supply side, the inventory of homes for sale currently sits at 29,365, which is 9.0 percent lower than this time last year. New listings for the most recent reporting week were 9.0 percent lower than a year ago, and only 41.7 of new listings were lender-mediated.
The fact that a much higher proportion of sales are lender-mediated (53.5 percent) compared to new listings (41.7 percent) is an indication that foreclosures and short sales are not languishing on the open market. Although we still have a ways to go, this is a hopeful sign. The sooner the lender-mediated inventory is absorbed, the sooner our market can return to a traditional recovery process.
For 19 weeks out of the past 20, pending sales have been higher than during the equivalent week in 2007. There were 649 pending sales for the week ending November 15, up a healthy 19.1 percent from the same week last year. Of these newly signed purchase agreements, 53.5 percent were for lender-mediated foreclosure or short sale properties and 41.9 percent were listed at $150,000 or below. Over the last three months, there have been more than 25 percent more pending sales than during the same time in 2007. A healthy portion of these sales have been in the lower price ranges.
On the supply side, the inventory of homes for sale currently sits at 29,365, which is 9.0 percent lower than this time last year. New listings for the most recent reporting week were 9.0 percent lower than a year ago, and only 41.7 of new listings were lender-mediated.
The fact that a much higher proportion of sales are lender-mediated (53.5 percent) compared to new listings (41.7 percent) is an indication that foreclosures and short sales are not languishing on the open market. Although we still have a ways to go, this is a hopeful sign. The sooner the lender-mediated inventory is absorbed, the sooner our market can return to a traditional recovery process.
Monday, November 17, 2008
Foreclosures are where its at.
Weekly Market Activity Report
As the fall temperature persists at near freezing levels, home sales activity remains stubbornly higher than it was a year ago, despite weakened consumer confidence and a sluggish economy. Pending sales for the week ending November 8 were 16.9 percent higher than the same week in 2007, and over the last three months have been a robust 26.6 percent higher. Lender-mediated foreclosures and short sales in the lower price ranges are driving the swing upwards; 54.4 percent of the most recent reporting week's pending sales were lender-mediated and 43.2 percent were priced under $150,000.
Supply remains down from last year but appears to have reached a plateau of sorts. We have had roughly 9 percent fewer total homes for sale than at the same point last year for the last 5 consecutive weeks. New supply coming onto the market continues to slow its velocity and will likely remain commensurate in pace with fourth-quarter 2007. A total of 41.1 percent of new listings over the past week were lender-mediated.
As the fall temperature persists at near freezing levels, home sales activity remains stubbornly higher than it was a year ago, despite weakened consumer confidence and a sluggish economy. Pending sales for the week ending November 8 were 16.9 percent higher than the same week in 2007, and over the last three months have been a robust 26.6 percent higher. Lender-mediated foreclosures and short sales in the lower price ranges are driving the swing upwards; 54.4 percent of the most recent reporting week's pending sales were lender-mediated and 43.2 percent were priced under $150,000.
Supply remains down from last year but appears to have reached a plateau of sorts. We have had roughly 9 percent fewer total homes for sale than at the same point last year for the last 5 consecutive weeks. New supply coming onto the market continues to slow its velocity and will likely remain commensurate in pace with fourth-quarter 2007. A total of 41.1 percent of new listings over the past week were lender-mediated.
Tuesday, November 11, 2008
Ignore the news, our market is different and its looking up.
Weekly Market Activity Report
There is further evidence that home sellers (both traditional and lender-mediated) in the Twin Cities housing market are becoming more successful in attracting buyer interest by pricing their properties attractively from the get-go. This is having the bonus effect of limiting further extension of market time and reducing the number of price concessions. For instance, the Average Days on Market Until Sale in October was 141, down from last year by 0.8 percent. This is the first year-over-year decline in market time since we began tracking the figures in 2006.
Similarly, the Percent of Original List Price Received at Sale in October sat at 91.3 percent. While still down from last year, it is only down 1.9 percent, compared to the more robust drops of 4 percent or higher seen during most of 2008. In other words, the market is still tilted in the buyer's favor, but sellers and banks are responding with more realistic prices at the time of first listing.
For the week ending November 1, there were 21 percent fewer new listings than there were at this time last year, and 1.4 percent fewer pending sales. This is the first downward year-over-year movement in pending sales since June.
The Housing Affordability Index has increased slightly in November to 161, while November's Months Supply of Inventory shows a drop to 9 months.
There is further evidence that home sellers (both traditional and lender-mediated) in the Twin Cities housing market are becoming more successful in attracting buyer interest by pricing their properties attractively from the get-go. This is having the bonus effect of limiting further extension of market time and reducing the number of price concessions. For instance, the Average Days on Market Until Sale in October was 141, down from last year by 0.8 percent. This is the first year-over-year decline in market time since we began tracking the figures in 2006.
Similarly, the Percent of Original List Price Received at Sale in October sat at 91.3 percent. While still down from last year, it is only down 1.9 percent, compared to the more robust drops of 4 percent or higher seen during most of 2008. In other words, the market is still tilted in the buyer's favor, but sellers and banks are responding with more realistic prices at the time of first listing.
For the week ending November 1, there were 21 percent fewer new listings than there were at this time last year, and 1.4 percent fewer pending sales. This is the first downward year-over-year movement in pending sales since June.
The Housing Affordability Index has increased slightly in November to 161, while November's Months Supply of Inventory shows a drop to 9 months.
Tuesday, November 4, 2008
Housing market is slowly getting better in MN
Weekly Market Activity Report
The big letdown in home sales that many of us have expected following the recent drops in consumer confidence has yet to materialize in the Twin Cities housing market. For the week ending October 25, there were 602 pending sales, up 17.1 percent over the same week last year. Despite the uncertainties swirling in the general economy, home sales continue to post year-over-year increases every week. Lender-mediated sales continue to grow market share, as 51.1 percent of pending sales for the most recent reporting week were foreclosures or short sales, which should mean continued declines in median sales prices.
New listings for the same week were down 2.0 percent from the same week in 2007, and the total number of active homes for sale is down by 9.2 percent year-over-year.
This week's edition of the MAAR Weekly Market Activity Report features an updated Supply-Demand Ratio for November of 10.72, which means that there will be approximately 10.72 houses for every buyer during the month of November. This is down 13.9 percent from November 2007's figure of 12.45.
The big letdown in home sales that many of us have expected following the recent drops in consumer confidence has yet to materialize in the Twin Cities housing market. For the week ending October 25, there were 602 pending sales, up 17.1 percent over the same week last year. Despite the uncertainties swirling in the general economy, home sales continue to post year-over-year increases every week. Lender-mediated sales continue to grow market share, as 51.1 percent of pending sales for the most recent reporting week were foreclosures or short sales, which should mean continued declines in median sales prices.
New listings for the same week were down 2.0 percent from the same week in 2007, and the total number of active homes for sale is down by 9.2 percent year-over-year.
This week's edition of the MAAR Weekly Market Activity Report features an updated Supply-Demand Ratio for November of 10.72, which means that there will be approximately 10.72 houses for every buyer during the month of November. This is down 13.9 percent from November 2007's figure of 12.45.
Monday, October 27, 2008
Stock Market down, how about buying a bank owned home?
Weekly Market Activity Report
Home sales in the Twin Cities housing market continue to post healthy increases over last year, though the upward movement isn't as powerful as it was during September. For the week ending October 18, there were 618 signed purchase agreements (pending sales)—an increase of 9.6 percent over the same week last year and the 16th consecutive week of year-over-year upward movement. Foreclosures and short sales continue to comprise a sizable chunk of the market.
New listings for the same time period comparison were 18.1 percent lower, which represents the 30th week of the last 33 to have downward movement in new listing supply. The total inventory of homes for sale sits at 30,343, which is about 3,000 less than at this same time in 2007. Inventory should continue to fall through the remainder of the year but won't fall as far as previous years given the higher number of foreclosures and short sales, which tend to stay on the market irregardless of snow depth and subzero temperatures.
Home sales in the Twin Cities housing market continue to post healthy increases over last year, though the upward movement isn't as powerful as it was during September. For the week ending October 18, there were 618 signed purchase agreements (pending sales)—an increase of 9.6 percent over the same week last year and the 16th consecutive week of year-over-year upward movement. Foreclosures and short sales continue to comprise a sizable chunk of the market.
New listings for the same time period comparison were 18.1 percent lower, which represents the 30th week of the last 33 to have downward movement in new listing supply. The total inventory of homes for sale sits at 30,343, which is about 3,000 less than at this same time in 2007. Inventory should continue to fall through the remainder of the year but won't fall as far as previous years given the higher number of foreclosures and short sales, which tend to stay on the market irregardless of snow depth and subzero temperatures.
Tuesday, October 21, 2008
Homes sales are still up, inventory is down, The housing market is looking good.
Home sales continued their recent upward streak for the week ending October 11, with pending sales posting a 21.1 percent increase over the same week in 2007. While this doesn't keep pace with the extreme increases seen throughout September, it remains a positive indicator of recent buyer demand. Almost half of the properties bought during the week in question were lender-mediated foreclosures or short sales—47.3 percent, to be exact.
On the supply side, things look decidedly different. New listings declined by 10.0 percent for the same time period comparison and are down 11.5 percent over the last three months. The total supply of active homes for sale sits at 30,495, which is 9.4 percent below this time last year. Inventory should decline through the remainder of the year as traditional home sellers take their homes off the market with greater frequency during the fall and winter months, waiting for the inherent optimism and renewed spirit of spring's thaw.
On the supply side, things look decidedly different. New listings declined by 10.0 percent for the same time period comparison and are down 11.5 percent over the last three months. The total supply of active homes for sale sits at 30,495, which is 9.4 percent below this time last year. Inventory should decline through the remainder of the year as traditional home sellers take their homes off the market with greater frequency during the fall and winter months, waiting for the inherent optimism and renewed spirit of spring's thaw.
Monday, October 20, 2008
New MN Law for Carbon Monoxide Alarms
It is quite possible that MN Stat. 299.51 snuck up on you and your clients like carbon monoxide - silently. Although this new state mandate had received some attention during the legislative session, word of the new law (effective August 1, 2008 for existing single-family homes) and its application has not spread throughout the industry.
What is it? The new carbon monoxide (CO) alarm law requires that "every single-family dwelling and every dwelling unit in a multifamily dwelling" have "an approved and operational carbon monoxide alarm installed within ten feet of each room lawfully used for sleeping purposes." (See MN Stat. 299.51) This law was effective as of August 1, 2007 for newly constructed homes, and just became effective August 1, 2008 for all existing single-family dwelling units. It becomes effective in August 1, 2009 for existing multifamily dwelling units. The alarms must be an approved device (conforming to UL2034 standards), and may be hardwired, plugged in, or battery-powered (if attached to the wall).
Time to go shopping at your local Home Depot, Ace Hardware, Menards or any other store that carries house hold items.
What is it? The new carbon monoxide (CO) alarm law requires that "every single-family dwelling and every dwelling unit in a multifamily dwelling" have "an approved and operational carbon monoxide alarm installed within ten feet of each room lawfully used for sleeping purposes." (See MN Stat. 299.51) This law was effective as of August 1, 2007 for newly constructed homes, and just became effective August 1, 2008 for all existing single-family dwelling units. It becomes effective in August 1, 2009 for existing multifamily dwelling units. The alarms must be an approved device (conforming to UL2034 standards), and may be hardwired, plugged in, or battery-powered (if attached to the wall).
Time to go shopping at your local Home Depot, Ace Hardware, Menards or any other store that carries house hold items.
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