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Weekly Market Activity Report

2009-04-28T19:10:00.000-07:00

Here's the latest from MAAR

Low mortgage rates, high affordability and government programs designed to encourage home purchases are continuing to spur home sales this spring despite an iffy economy. The week ending April 18 was the fourth consecutive week of pending sales activity that was more than 20 percent higher than during the same week in 2008. There were 1,083 pending sales for the week, up 21.3 percent from this time last year. It was also the third consecutive week of 1,000-plus unit sales, a first-time occurrence since 2006.
All these sales are quickly whisking inventory off the market at a time when new listing inventory is not growing at its typically robust spring rate. The number of total homes for sale is down 18.4 percent from a year ago at 26,318. As a result, the gap between this year's supply of homes and that of previous years continues to grow.

More HERE.

Pending sales skyrocket over 40 percent as prices decline

2008-10-10T14:21:00.000-07:00

From MAAR:

Minneapolis, Minnesota (October 10, 2008) – Buyers flocked to the Twin Cities housing market in September to take advantage of attractive home prices and a sunsetting federal loan program, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc.

There were 4,036 pending sales in September, which represented a whopping 42.2 percent increase over September 2007's mark of 2,839. Closed sales, too, were up dramatically—34.9 percent higher for the same time period comparison. The last time there was a year-over-year pending sales increase even close to this large was in March of 1998 when the increase over March of 1997 was 38.6 percent.

"There really are some incredible buying opportunities out there and this is the surest sign yet," said Kevin Knudsen, MAAR President. "But we also need to keep in mind that September of last year was extremely slow, which makes these figures pop a little more."

Also adding to the influx of September buyers was "last call" activity before the October 1 dissolution of the FHA-sponsored seller-funded downpayment assistance program, which was the last of a dying breed of zero-down loan programs remaining on the market.

A hearty 41.6 percent of September's pending sales were lender-mediated foreclosures and short sales, up from 17.5 percent in September 2007. The increased market share of these bargain-priced properties led to further declines in home prices. The overall September median sales price of $189,900 fell from last year by 15.6 percent. Lender-mediated homes posted a median sales price of $146,000, a decrease of 11.5 percent from last year. Traditional properties had a September median sales price of $212,500, a decrease of 8.6 percent.

Due to the decline in home prices and another downtick in mortgage rates, the October Housing Affordability Index jettisoned upward from last month to 159, which is 21.4 percent higher than this time last year, and back up at extremely healthy levels following a few years of unsustainably low affordability. While challenging for sellers, this means a more accessible market for potential home buyers, thus the resurgence in sales activity.

"With all the uncertainties in the economy, it's hard to predict right now if the sales upturn will continue," said Steve Havig, MAAR President-Elect. "But the affordability and inventory choice picture is still very attractive, which bodes well for our long-term picture."

Party Time Continues!

2008-10-06T14:38:00.000-07:00

Here's the latest from MAAR:

The September sales party continued for the week ending September 27, as pending sales jumped by a whopping 58.4 percent from 2007. The extravagant nature of these sales increases will not likely continue through the fall, given the current economic uncertainties and an expected downward trend in consumer confidence. New listings also increased for the same time period, bumping up 9.9 percent from the same week last year—the first year-over-year increase in new listings since early July. Total inventory remains significantly down; there are roughly 3,000 fewer homes for sale now than at this time in 2007.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for several important metrics. The Supply-Demand Ratio (SDR)—a measurement of the number of homes for sale for each projected buyer—stood at 9.79 for October, down slightly from last October. The Percent of Original List Price Received at Sale dipped slightly to 92.2 percent in September, while the Average Days on Market Until Sale increased to 145, up 2.7 percent from last September.

September Song

2008-10-01T21:15:00.000-07:00

Her's the latest from MAAR:

September home sales in the Twin Cities housing market continue to post huge gains over 2007. For the week ending September 20, there were 42.8 percent more pending sales than the same week last year. Over the last seven weeks, there have been 5,866 signed purchase agreements, up more than 1,500 units from the 4,363 posted during this period in 2007. However, here are some items to keep in mind that temper the good news:

September 2007 was a particularly slow month, which inflates the appearance of this year's increase. Current sales levels are on par with September 2006.
Lender-mediated foreclosures and short sales are a growing part of the market. For the most recent week, 39.1 percent of pending sales were lender-mediated, compared to 13.4 percent for the same week last year.
Home sales in September of this year may be temporarily propped up by buyers taking advantage of the final days of the FHA seller-funded downpayment assistance program, which disappears on October 1.
The supply of homes for sale remains lower than last year—7.8 percent down from the same time last year for the most recent reporting week.

2008-09-27T17:06:00.001-07:00

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A Nice Little Streak

2008-09-22T14:51:00.000-07:00

Here's the latest from MAAR:

As we enter the fall season, buyer activity is still on a nice little streak, posting its sixth consecutive week of double-digit year-over-year growth in pending sales. During this six-week period, there have been 5,085 purchase agreements signed in the Twin Cities housing market compared to only 3,816 during this time in 2007. For the week ending September 13, there were 783 purchase agreements signed—a jump of 23.3 percent over the same time last year.

For that same week there were 1,864 new listings—a decline of 13.4 percent from the same week last year. The total number of homes currently for sale is 31,426, which is down 9.3 percent from this time in 2007. As it does every fall, total supply should continue to decline in the months ahead.

Who says all sequels are bad?!?

2008-09-16T21:18:00.000-07:00

Here's the latest from MAAR:

Like The Godfather: Part II, the Twin Cities housing market showed a surprisingly strong sequel to last week's huge upswing in pending sales. For the week ending September 6, there were 749 purchase agreements written—a rise of 49.8 percent from the same week in 2007. This comes on the heels of last week's then-unthinkably large increase of 51.3 percent.

There are factors at work that are exacerbating the appearance of this rebound and slightly tempering this good news. First, the sales slowdown in August and September of last year was historically extreme; current activity seems extraterrestially high, compared to 2007, but is actually only slightly above the pace of 2006. In addition, there is likely a short-term increase in sales activity as home buyers act now to take advantage of sunsetting seller-funded downpayment assistance on FHA mortgages. This program is currently the only zero-down loan option still available and is disappearing as of October 1, subject to a congressional rescue.

Other factors working to boost buyer activity include the newly authorized $7,500 federal tax credit for first-time homebuyers, home prices too good to pass on and downward pressure on interest rates.

Elsewhere in the market, the supply of homes for sale continues to shrink. There are currently 9.0 percent fewer homes on the market than there were a year ago. And we are almost dead even with the number of homes on the market at this time in 2006.

Holy Rebound, Batman!

2008-09-08T18:05:00.000-07:00

Here's the Latest from MAAR:

Like Adam West as Batman, the market for home sales in the Twin Cities went POW! during the week ending August 30. For the week, there were 965 purchase agreements signed—a whopping increase of 51.3 percent from the same week last year. That's the highest year-over-year increase in pending sales since we began tracking that figure on a weekly basis in 2004. Home-buying activity is particularly heavy relative to last year due in all likelihood to a) the historically sluggish showing in August of last year as the credit crunch took hold, b) a bevy of buyers taking advantage of the final days of FHA's seller-funded downpayment assistance program, which sunsets on October 1 of this year and (c) new home buyers getting off the fence and taking advantage of the new home buyer tax credit of up to $7,500.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for several key metrics. Days on Market Until Sale dipped slightly to 143 but remains up from last year by 5.8 percent. The Percent of Original List Price Received at Sale increased slightly to 92.7 but remains down from the healthier levels of the past several years. The Housing Affordability Index increased to 151, thanks to falling prices and interest rates.

The Months Supply of Inventory fell to 9.9 months. This means it will take the current crop of properties for sale approximately 9.9 months to completely sell through, given current sales rates. This is dead-even with this time last year, another indication that the market isn't continuing to shift in the buyer's favor anymore for the time being. A balanced market is thought to have a 5- to 6-month supply rate.

Pending Sales Up 27%

2008-09-03T20:48:00.000-07:00

Here's the latest from MAAR:

Once again, the big story in this week's activity report is the huge upswing in pending sales activity relative to one year ago. For the week ending August 23, there were 818 pending sales, an increase of 26.8 percent from the same week in 2007. Over the last three weeks, we have now posted 545 more pending sales than over the same three weeks last year.

Part of this year's increase is due to legitimate increases in demand brought about by attractive prices, still-healthy mortgage rates and a "last call" flurry of consumers utilizing FHA's seller-funded downpayment assistance program before it is discontinued on October 1. The other reason for the year-over-year surge is the Valley Fair-esque downward dive that activity took last year at this time amidst the initial media frenzy surrounding the now-infamous "credit crunch."

The supply of homes for sale continues to decrease, now down 7.7 percent from last year. For September, our Supply-Demand Ratio is 9.29, which means there are 9.29 homes for sale for each buyer in the market. This is a hearty 24.2 percent decline from last September and is due to the falling supply and rising demand.

Legitimately Robust Current Demand

2008-08-25T19:04:00.000-07:00

Here's the Latest from MAAR:

For the week ending August 16, 2008, there were a whopping 33.0 percent more pending sales than the same week last year—an increase of more than 200 units. This extremely strong showing is due to a combination of legitimately robust current demand and the uncharacteristically steep downward dive sales took last year after the credit markets began to constrict in August 2007. This week's figures are more in line with the equivalent (pre-credit crunch) time period in 2006—just 2.5 percent off that pace.

As for housing supply, the number of new listings on the market receded by 18.4 percent for the same time period comparison, and the total number of active properties for sale is currently 7.1 percent lower than at the same point last year.

Pending sales 21% higher than one year ago!

2008-08-18T17:00:00.000-07:00

Pop Those Corks!

Here's the latest from MAAR:

Pending sales for the week ending August 9 were a startling 21.0 percent higher than one year ago, posting 900 sales as compared to 744 a year ago. While one week of such robust increase doesn't justify the opening of stored champagne bottles, it is another welcome sign of reviving buyer demand. While a highly productive number in its own right, the year-over-year increase is somewhat amplified by just how slow August of last year was, as that is the specific month in which tightening lending standards began to take root.

New listings declined by 11.3 percent for the same time period comparison, and the total number of active properties for sale is currently 6.4 percent lower than it was one year ago. With foreclosure and short sale activity increasing, the declining supply underscores just how many traditional sellers are waiting this market out by not placing their homes up for sale.

Sales Tantalizing the Marketplace

2008-08-11T12:59:00.000-07:00

For the fifth consecutive week and ninth of the last twelve, there were more purchase agreements written on homes than one year previous.

Here's the Latest from MAAR:

For the week ending August 2, there were 820 pending sales—an increase of 2.2 percent from the same week in 2007. Over the last three months, pending sales have held relatively steady, posting an increase of 0.6 percent from the same period last year. With sales tantalizing the marketplace with slight upward jiggering over the past several weeks, some might want to predict that we've reached bottom. While the news is encouraging, it's a bit premature to stake that claim. Meanwhile, housing supply is clearly in decline. New listings from the most recently reported week were a stirring 19.8 percent lower than last year and were down 12.8 percent over the last three months.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for several key metrics. Days on Market Until Sale in July fell slightly to 146 but remains up 13.3 percent from July 2007. Percent of Original List Price Received at Sale decreased to 92.6 percent, also down from last year. Months Supply of Inventory is up 8.6 percent from last year at 10.5. And our Housing Affordability Index (HAI) fell 4 points from last month to 144 due to another increase in interest rates and seasonal increases in home prices. Despite the drop, the HAI remains much improved from 2006 and 2007.

A New Market Picture ?

2008-08-04T15:53:00.000-07:00

Here's the latest from MAAR:

There are fewer homes to choose from for today's prospective buyers than there were a year ago. There are currently 32,978 residential housing units up for sale in the Twin Cities region, down 5.5 percent-or about 2,000 units-from this time last year. The cause of the lessened supply is a decrease in new listings combined with more homes coming off the inventory list by way of "sold" signs. For the week ending July 26, there were only 1,816 new listings, a drop of 16.5 percent from one year ago. Newly signed purchase agreements (pending sales) for the same year-over-year comparison increased by 5.1 percent.

Less supply coupled with promising signs of demand have created a new market picture. In August, our Supply-Demand Ratio (SDR) indicates that there will be 8.68 homes for sale per buyer, a decrease of 4.2 percent from one year ago. This is the second consecutive month of downward year-over-year movement in this metric, which is a good thing. A well-balanced market for the month of August would show an SDR of about 5 homes for sale per buyer. We have a ways to go, but we're on the right track if this trend continues.

Housing and Economic Recovery Act of 2008 PASSED!

2008-07-30T10:17:00.000-07:00

FINALLY SOME GOOD NEWS!!!!!

H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the House on July 23, 2008, by a vote of 272-152. On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008. The bill includes the following provisions:

GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).

FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).

Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 8, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).

FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.

Seller-funded downpayment assistance programs – codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.

VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.

Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.

GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.

Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.

National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.

CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.

LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.

Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.

For more information, visit http://www.realtor.org/governmentaffairs.

Supply is Down like Grandma's Comforter

2008-07-28T14:46:00.000-07:00

Here's the latest from MAAR:

In the Twin Cities housing market, sales are flat like a New York pizza and supply is down like grandma's comforter. Fortunately for us, the data confirms our kitschy similes. Pending sales for the week ending July 19 are ahead of the same week last year by 3.8 percent, while new listings fell by 13.0 percent for the same time period—all positive signs of a market in transition.

The total number of active listings for sale currently sits at 33,410, (comfortably) down 1,722 units—or 4.9 percent—from this time last year. Since the number of new homes coming on the market remains in decline and sales appear to have hit bottom, we can expect total inventory to remain lower than last year for some time to come.

Less is More in Local Housing Market

2008-07-21T15:32:00.000-07:00

Here's the latest from MAAR:

Housing supply in the Twin Cities continues its descent. For the week ending July 12, there were 11.5 percent fewer new listings on the market than there were one year ago. Over the last three months, there have been roughly 4,000 fewer homes on the market than there were during the same period in 2007. The total number of properties for sale currently sits at 33,390—down 4.7 percent from this time last year.

The sales picture is slightly different, as activity has flattened after two years of downward movement. We are showing a slight 1.8 percent increase in pending sales from the same week last year. Over the last three months, there have been roughly 300 fewer pending sales—a decline of 2.7 percent.

Fireworks?!?!?

2008-07-14T18:51:00.000-07:00

Here's the latest from MAAR

Prospective homeowners appear to have celebrated our Independence holiday by buying a home. For the week ending July 5, there were 735 signed purchase agreements (pending sales), up 7.3 percent from the same week one year ago. New listings increased by 2.5 percent for the same time period comparison but took the expected dive from one week prior due to the 4th of July holiday.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for several important metrics:

Days on Market Until Sale fell from last month to 147 but is still 13.1 percent higher than a year ago, and the Percent of Original List Price Received at Sale increased to 92.8 percent. Both changes are additional signs that home sellers are beginning to experience some light relief.

However, not all indicators are rosy, as the Months Supply of Inventory increased slightly to 10.6 months, up 11.0 percent from last July, and the Housing Affordability Index dipped slightly to 148 due to another increase in interest rates.

For a full and detailed look at the supply and demand environment in the Twin Cities housing market, take a look at the July 2008 Housing Supply Outlook.

On the Right Track

2008-07-07T20:12:00.000-07:00

Here's the latest from MAAR:

For the week ending June 28, pending sales in the Twin Cities housing market dipped slightly from the year previous, posting 43 fewer sales than the same week in 2007. New listings for the same time period comparison were only 6 listings higher, a meager 0.3 percent increase.

Our overall buyer trajectory this year is flat compared to a year ago. For 10 of the last 12 weeks, pending sales have been within 5 percent of 2007, either above or below. New listings, on the other hand, are showing dramatic downward movement. Over the last three months, we've posted 13.6 percent fewer listings than the same time last year.

This week's edition of the MAAR Weekly Market Activity Report features an updated Supply-Demand Ratio (SDR). The SDR for July fell slightly to 8.11, which means there are approximately 8.11 houses for each buyer in July. At 1.6 percent lower than July 2007, this is the first year-over-year decrease in SDR since MAAR began tracking the figure in 2004. Since SDR takes both supply and demand into consideration, this is the surest sign yet that the market is no longer charging headlong into the buyer's favor.

Market Continues to Level Out

2008-06-30T19:31:00.000-07:00

Here's the latest from MAAR:

New listings continue to lag behind last year's pace in the Twin Cities housing market. For the week ending June 21, new listings dropped by 10.6 percent compared to the same week in 2007. This is the sixteenth consecutive week of year-over-year decline, a period during which there have been a total 5,881 fewer new listings than one year ago. The total inventory of homes currently for sale is 2.6 percent lower than last year.

On the flip side, buyer demand remains relatively flat after over two years of heavy downward momentum. Pending sales for the week ending June 21 were 1.8 percent behind the same week last year, a decline of 16 sales. This is the 9th week in the last eleven where pending sales posted figures that were within 5 percent of one year ago, either above or below.

A Relatively Smooth Course

2008-06-23T16:18:00.000-07:00

Here's the Latest from MAAR:

Home sales are continuing along a relatively smooth course so far this summer, with newly signed purchase agreements (pending sales) increasing by 3.8 percent over last year for the week ending June 14. Over the last six weeks, pending sales are behind the same time period in 2007 by only 30 sales, or 0.6 percent. When you compare that to the consistent 15–20 percent declines of the last few years, this is welcome news.

Simply matching last year's numbers does not allow home sellers to celebrate recovering buyer interest in their properties. Plus, we need to keep some perspective on what types of sales are comprising this new stabilization of activity. A hearty 27.9 percent of purchase agreements from the last six weeks were made on lender-mediated foreclosures or short sales. Buyer activity is being propped up by the increased market share of these types of properties.

Traditional sales over the same six-week period are down 21.0 percent from last year, while lender-mediated sales are up 284.5 percent from 406 sales last year to 1,561 this year. So the traditional seller still faces some challenges—and some new and very different competition.

All told, heavy buyer interest in lender-mediated properties is viewed as a positive sign. We need the prevalent lender-mediated inventory to be absorbed before our market can return to some semblance of order. The sooner these properties are worked through the market cycle, the sooner that the mist of uncertainty they bring to negotiation, appraisal and home value will lift.

"Whoa, we're halfway there; whoa-oh, livin' on a prayer!"

2008-06-16T18:54:00.000-07:00

Here's the latest from MAAR (And Bon Jovi):

Bringing our market back to balance involves a two-step process: supply needs to draw down, demand needs to bounce back up. It's as simple as that. So far, 2008 is proving to be the year that we can confidently check the first item off this list, as the number of homes for sale continues to dwindle relative to one year ago. There are currently 33,219 homes for sale in the Twin Cities region, down a hearty 4.9 percent from one year ago, a year-over-year figure which should continue to drop in the months ahead. New listings for the week ending June 7 were down 13.9 percent from a year ago, while pending sales declined by a smaller 5.3 percent for the same time period comparison.

All in all, we're halfway there: supply is coming down, but demand is only flattening, not coming back up just yet. Regardless, the signs are encouraging.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for our Housing Affordability Index (HAI) and Months Supply of Inventory. The HAI dropped slightly to 149 due to another increase in interest rates, while inventory increased to 10.4 months of supply. This means that it will take 10.4 months to sell through our current inventory, should buyer activity remain constant and no homes new to the market are listed for sale.

Pending Sales Are Up 4.9 Percent!

2008-06-09T15:53:00.000-07:00

Here's the latest from MAAR

Sellers in the Twin Cities housing market continue to cut back on their output, while simultaneously we appear to have finally found the bottom for buyer activity. New listings for the week ending May 31 were a healthy 23.0 percent behind the same week in 2007, a drop of 522 units. For the same time period, pending sales increased by 4.9 percent over last year—the largest year-over-year increase in 117 weeks, and only the third recorded increase in that time. So even though home sales are still low by historical standards, they’re not falling any further for the time being.

This week’s edition of the MAAR Weekly Market Activity Report features update figures for two metrics. Days on Market Until Sale increased slight to 159, up 27.9 percent from a year ago, and Percent of Original List Price Received at Sale increased slightly to 92.6 percent. Expect the Percent of Original List Price Received at Sale to show further increases during the summer months, when sellers are more likely to receive offers that are closer to their asking prices than in winter.

Have we hit bottom, yet?

2008-06-02T14:00:00.000-07:00

Here's the latest from MAAR:

Our housing market is forming up; we can now see both the floor and ceiling. For the second consecutive week, pending sales activity in the Twin Cities market is flat compared to last year, dropping just 1.4 percent from a year ago for the week ending May 24. For the same time period comparison, new listings declined 6.4 percent and total listing supply actually declined, an anomaly for the spring market.

With sales halting their downward decline, new listings still sluggish and overall inventory leveled, the trends are coalescing around a clear picture: we have found the floor for buyer demand while hitting the ceiling of seller supply. Being at or near the bottom of the downward shift is certainly positive news, but keep in mind that the long upward climb out of our nadir will be gradual and measured.

This week's edition of the MAAR Weekly Market Activity Report features an updated Supply-Demand Ratio (SDR) figure for June 2008 of 8.23. This means that there are roughly 8.23 homes on the market for each buyer during the month of June, up 9.3 percent from June 2007.

First Time in 10 Months!

2008-05-27T14:51:00.001-07:00

Here's the latest from MAAR:

For the first time in ten months—and only the second time in the last two years—the number of purchase agreements (pending sales) signed for our most recent weekly activity set was slightly ahead of one year ago. There were 714 purchase agreements signed for the week ending May 17, which is 1.7 percent higher than one year ago. A hearty 27.5 percent of these sales were mediated by a financial institution as a foreclosure or short sale.

Over the last three months, the number of pending sales is still down 10.3 percent compared to 2007, and the number of new listings is down 13.9 percent for the same time period. The total number of homes for sale is 700 units behind this time last year—a year-over-year fall of 2.0 percent, a gap which should only widen as sellers continue to cut back on new listings.

X Marks the Spot

2008-05-19T18:58:00.000-07:00

Here's the latest from MAAR:

"X" marks the spot on your typical pirate treasure map, but it can also
be an intrepid signifier of a changing market. This edition of the MAAR
Weekly Market Activity Report shows off a big, bold, red "X" on our
"Last Three Months Inventory for Sale" graph (page 4). The diverging
trend lines are a marked indicator that the supply of homes has been
held at bay relative to recent years for the past several months. For the
week ending May 10, the number of new listings was 15.5 percent
behind last year. With new listings still sluggish, expect this trend to
continue.
Pending sales were down 5.3 percent compared to a year ago. Yes,
weekly pending sales are still battling to surpass last year's numbers,
but we hope to mark an uplifting "X" on our "Last Three Months
Weekly Pending Sales" (page 3) treasure map later this year.

Hope Springs Eternal for Twin Cities Real Estate

2008-05-12T18:46:00.001-07:00

Here's the latest Weekly Market Report from MAAR:

In Minnesota, warmer weather typically equates to listing increases. But compared to previous years, the run-up to the 2008 summer selling season in the Twin Cities housing market has been meek. The number of new listings for the week ending May 3 was 16.6 percent behind the same time last year—the ninth consecutive week of decline relative to a year ago. Buyer activity is also slower. Over the last three months, pending sales are hovering around a 16 percent year-over-year decline.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for several important metrics. As the spring season begins, the Average Days on Market Until Sale decreased to 154 while the Percent of Original List Price Received at Sale increased slightly to 91.7. The Housing Affordability Index decreased to 151, due to slight seasonal increases in sales price and interest rates. Finally, the Months Supply of Inventory increased to 10.2 months; a 5- to 6-month supply rate is considered indicative of a balanced market.

The Housing Crisis Is Over!

2008-05-07T19:11:00.000-07:00

It is...according to the Wall Street Journal.

Also, good news for Minneapolis Real Estate Investors: FREE MONEY!

Check it out HERE.

Ring the bell?

2008-05-05T12:44:00.000-07:00

Here's the latest from MAAR:

Ring the bell, sound the alarms, shout from the mountaintops: the number of homes for sale in the Twin Cities region as of today is less than the number for sale at this point last year, a new benchmark which marks an encouraging sign that the market is in an early stage of recovery.

This is the first time since MAAR began tracking inventory figures that we have been able to show a year-over-year decline in listing supply. There are currently 32,448 residential properties for sale, a decline of 134 units from this time in 2007. With sellers still holding back on putting their homes on the market (new listings are down 11.4 percent from last year over the last three months), this downward year-over-year trend in inventory should continue into the summer.

This week's edition of the MAAR Weekly Market Activity Report features a new figure for our Supply-Demand Ratio of 7.53, which means there are approximately 7.53 homes on the market for each buyer in May— up 12.9 percent from May 2007 when the figure was 6.67.

King Me!

2008-04-28T18:35:00.000-07:00

Here's the latest from MAAR:

For two years, home buyers in the Twin Cities housing market have behaved like medieval kings—looking down upon their vast and glistening kingdom of available homes for sale with a calm and dismissive eye, slowly selecting their properties without hurry or haste. While their reign is not yet over, there are some noticeable cracks in the walls of their castle.

Sellers are not putting homes on the market with anywhere close to the frequency with which they did the last four years. For the week ending April 19, there were only 2,152 new listings, down 19.6 percent from the same week last year. This marks the sixth week in the last seven with a double-digit percentage drop from 2007. The slowdown in buyer activity has also shown signs of abating, as the number of new purchase agreements signed for the week ending April 19 was 893, only 3 units behind the total of 896 seen this week last year. This is the second straight week of relatively flat year-over-year pending sales activity.

However, don't head out and buy that $80,000 Italian sports car you've always wanted just yet. It's important to bear in mind that:

foreclosure and short-sale activity is taking up a larger portion of our overall market activity than it did previously, which has the effect of propping these numbers up a bit, and
we're still 39.8 percent behind our 2005 sales pace at the peak of the boom cycle.
Flattening overall supply (only up 0.4 percent from this time last year) and encouraging trends in sales figures should serve as welcome signs that the market corrections we've experienced in the last two years are taking a turn. Some semblance of order may very well be restored to the "kingdom" in the next year.

For more info CLICK HERE.

Is Twin Cities Real Estate Market is Recovery Mode?

2008-04-21T19:28:00.000-07:00

Here's the latest from MAAR

The signs are early and nascent, but there are some promising early indicators that the Twin Cities housing market is beginning to correct and pull back from its two year-beeline in the buyer's favor. While affordability, interest rates and overall supply are still attractive, home sellers are cutting back on new listings substantially in 2008.

For the week ending April 12, there were 2,156 new listings, down a full 20.1 percent from the same week last year. That's the fifth week in the last six that we've seen double-digit percentage drops from 2007 activity. Newly signed purchase agreements (pending sales) are still behind last year also, posting a 3.8 percent decline.

While our market still faces a long road ahead to full recovery, the recent reduction in new supply is a positive beacon on the horizon and undoubtedly welcome news for home sellers

More info HERE.

Weekly Twin Cities Real Estate Market Activity Report

2008-04-15T21:18:00.000-07:00

Here's the latest from MAAR:

Spring inventory growth remains staid in the Twin Cities housing market as the annual influx of new properties for sale has not been as rambunctious as the levels seen over the last few springs. The total number of homes for sale in the metro area currently sits at 31,615 up only 3.0 percent from the same time last year—the lowest such year-over-year increase for some years. Home sales remain relatively slow as well, with newly signed purchase agreements (pending sales) from the last three months trailing the same period last year by 16.6 percent.

This week's edition of the MAAR Weekly Market Activity Report features an updated Housing Affordability Index (HAI) for April. The HAI fell slightly to 155 due to a seasonal increase in home prices in March but remains a healthy 16.6 percent above where it was two years ago. Softening prices, motivated sellers and a continuation of historically low interest rates have dramatically improved the affordability picture in recent months.

Weekly Twin Cities Real Estate Market Activity Report

2008-04-07T17:02:00.000-07:00

Recently I heard two things of interest. The first involves John McCain's proposal to fix the Housing Crisis: require Buyers to have higher down payments. To be honest, I was a bit flabbergasted by this proposal. Why would anyone want to make it even more difficult to get deals done than they already are in this market what with all the tighter lending restrictions and the already staggering market. This type of thing could be the knock out blow to Seller's out there and I, for one, hope ultimately cooler heads will prevail.

The second tidbit was the notion that has been floated around that the 3rd Quarter of this year (July-August-September) may signal the "bottom" of this current market downturn.

So while both of these remain to be seen, it should be a very interesting fall!

Meanwhile...

Here's the latest from MAAR...

The Twin Cities housing market is showing early signs of entering a positive phase of correction. The number of new listings entering the market for the week ending March 29 was 14.8 percent behind the same week last year, the fourth consecutive week of double-digit declines relative to last year. Unfortunately, pending sales remain lackadaisical (down 15.9 percent for the same time period comparison), so the total inventory of homes for sale continues to exhibit decelerating growth this spring season—an encouraging momentum change in our shifting supply-demand balance.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for several key metrics. In March, the Days on Market Until Sale held steady at 165 and the Percent of Original List Price Received at Sale dipped slightly to 91.0—both indicators of the continued advantage the buyer holds in this market. The April Months Supply of Inventory increased to 9.6 months, up 23.9 percent from this time last year. A market that's balanced between buyers and sellers would have roughly a 5- to 6-month supply of homes for sale. We haven't been there since 2005.

Click here for this week's full report. Visit Market Info for reports as far as the eye can see.

Weekly Twin Cities Real Estate Market Activity Report

2008-03-31T20:27:00.000-07:00

A note: my personal schedule has been very hectic over the past few weeks, anecdotal evidence as it may be it nonetheless may serve as an optimistic counterpoint to the consistent (although indisputable) Market Reports I reprint here from the Minneapolis Association of Realtors.

I mention this not only as a way of explaining (apologizing) for my lack of posts and the innovative content you have come to expect from A Realtor you can Relate to but also as a way of of saying to the Sellers: "There will be brighter days ahead."

In the coming days I hope to bring you more content and strategies that Buyers AND Sellers can use to navigate the current market.

Make no mistake, gentle reader, There Will Be More Run-On Sentences!

In the meantime here is

...the latest from MAAR:

Vamoosh! Home sellers in the Twin Cities are continuing their great disappearing act, with new listings on the market in 2008 sitting far below last year's rate. Over the last three months, there have been almost 2,500 fewer listings put on the market than there were a year ago—a drop of 9.5 percent.

Inventory is still more plentiful than ever. Despite the pullback, we still have a record high number of houses on the market for this time of year. So what's the takeaway here? Well, if we look closer, we can see that the inventory gap between now and one year ago is closing, and closing hard. We've gone from being up 12.6 percent from a year ago to only 5.5 percent up in the last 12 weeks.

Gut check: We must keep perspective on the challenging environment that sellers still face, despite the softening competition. The number of signed purchase agreements (pending sales) for the last three months is 17.7 percent behind the same period a year ago. There's fewer of everything.

Weekly Twin Cities Real Estate Market Activity Report

2008-03-24T18:55:00.000-07:00

Here's the Latest from MAAR:

Potential home buyers waiting for even more new inventory to hit the market may be waiting a long time. For the week ending March 15, there were almost 300 fewer properties put on the market in the Twin Cities than during the same week in 2007—a decline of 12.0 percent. And the number of new listings on the market in the last three months is 6.9 percent behind the same time one year ago. So while total inventory remains high, the frenzied peak of seller activity appears to be behind us.

The number of newly signed purchase agreements jumped significantly from the previous week; and for the same time period comparison last year was down only 8.9 percent. While this is a positive indication that buyers may be beginning to recognize the tremendous opportunities available, we are by no means out of the woods yet. Let's at least hope we're out of the snow.

Weekly Twin Cities Real Estate Market Activity Report

2008-03-17T15:18:00.000-07:00

Here's the latest from MAAR:

Still waiting! Buyer activity remains relatively lethargic in the Twin Cities
housing market. For the week ending March 8, the number of new
purchase agreements signed was 682, behind the same time last year
by 18.7 percent. Despite the deluge of properties available, rapidly
improving affordability, attractive interest rates and motivated sellers,
buyers appear to be unwilling or unable to take advantage of this
incredibly attractive buyer's market.

Click HERE for the full report! (pdf)

Buyers spring for falling home prices

2008-03-12T16:08:00.000-07:00

Housing affordability at its highest point in five years

Minneapolis, Minnesota (March 12, 2008) – Aggressive seller pricing and steadily improving buying opportunities continue to be the hallmarks of the 2008 Twin Cities housing market so far, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc.
The substantial corrective price declines first seen in January were further fleshed out in February, as the median sales price for the month of $195,060 is a decrease of 12.5 percent from the same month last year. With builders, banks and traditional home sellers facing a challenging environment, they have priced their product to move. And, at least in February, prospective home buyers are taking notice of the opportunities available. Pending and closed sales posted relatively robust figures in February compared to the tepid showings of the recent past. There were 3,087 purchase agreements signed and 2,009 sales closed—down only 10.2 and 13.6 percent from last year, respectively. This is a lesser decline than seen in recent months.

“It feels like the pendulum is finally starting to make the big swing,” said Kevin Knudsen, MAAR President. “The price corrections we need are working alongside great inventory selection. And the recent FHA loan limit increase is going to have a dramatic and positive effect on buyers searching for secure financing.”

The MAAR Housing Affordability Index (HAI) shot up eight points from last month to 157. That’s good for 16 points in the last two months and the healthiest HAI figure since 2003. Additionally, the number of homes for sale continues to post record levels despite a drop-off in new listing supply. At the end of February, there were 29,842 homes for sale, which amounts to 8.72 homes for each buyer expected during the upcoming month.

“This is arguably the most attractive buying environment we’ve seen in the Twin Cities in a decade,” said Knudsen.

A note to those scouting the market for rock-bottom prices: The decline in median sales price is just as much a function of what kinds of properties are being sold as it is a slashing of listing prices. According to MAAR’s February Housing Supply Outlook, there recently has been a large increase in the sales of properties priced under $150,000, which does have the effect of skewing the overall median sales price downward.

“By no means do we want to sugarcoat the news of declining prices,” said Steve Havig, MAAR President-Elect. “We have to keep perspective as to what these prices mean and recognize that they represent the kind of correction that we need.”

Established in 1887, the Minneapolis Area Association of REALTORS® (MAAR) is the leading regional advocate and provider of information services, research and education on the real estate industry for brokers, real estate professionals and the public. With more than 9,000 members, MAAR is one of the 25 largest local REALTOR® associations in the nation and serves the
Twin Cities 13-county metro area and western Wisconsin.

Weekly Market Activity Report

2008-03-10T19:12:00.000-07:00

Here's the latest from MAAR:

The number of new listings on the market has been relatively small so far in 2008. Over the last eight weeks, there have been roughly 1,200 fewer listings put on the market than during the same eight weeks in 2007—a decline of 6.7 percent. The decline in purchase agreement activity during the same period is on a more extreme decline, however—falling by 17.8 percent for the same time period comparison.

What buyers need to hear about is the significant improvement in affordability. Despite an increase in mortgage rates, the Housing Affordability Index (HAI) shot up dramatically for March to 157, the highest figure in five years! The HAI increased thanks to a decline in sales prices in February and increased consumer income. The home buying environment has been getting exponentially more attractive with each passing month, which is great news for those waiting on a real estate market rebound.

This week's MAAR Weekly Market Activity Report features updated figures for several important metrics. Days on Market Until Sale held steady at 165 in February, an increase of 12.2 percent from last year. The Percent of Original List Price Received at Sale increased slightly to 91.1 percent, and should continue to rise in the spring months as it does each year.

Are Foreclosure Numbers Inflated?

2008-03-07T12:22:00.000-08:00

Here's some interesting info making the rounds this week on the current state of Foreclosures:

If you listen to the news, you'd be lead to believe that a large portion of American homeowners are foreclosing on their homes, but is this really true? Are we being given accurate accounts of the foreclosure rates? In fact, according to an article in the January - February 2008 issue of Personal Real Estate Investor, the numbers being reported are grossly misleading. Turns out that "scoop beats accuracy".

Foreclosures are reported based on the number of filings. A filing is simply "the process of filing any legal document that marks a stage in the process from delinquency and NOI to the far from inevitable seizure, sale, and loss of a home by the delinquent borrower." In some states there are up to 2 filings and in others up to 3 filings. Then the number of filings is multiplied by the number of loans on the home. Therefore, if you have 3 filings and 2 loans on your home, that foreclosure is counted SIX TIMES! RealtyTrac, a company known for counting and tracking foreclosures, is working on a system to be more accurate. Rather than count filings, they have a way to count just addresses. This new method has decreased the number of published foreclosures by upwards of 30%.

In addition to the miscounted filings, there are the properties that never result in full foreclosure and seizure by the bank. These foreclosures either end in the homeowner coming to an agreement with the bank, or a third party sale, or the borrower simply finding a way to make their payments. These situations aren't deducted from the original number reported. In fact, only 40% of homes that begin the process of foreclosure actually end up in seizure by the bank.

The facts are:

More than 94.4 percent of all mortgages in the U.S. are current (per the Mortgage Bankers Association, 12/06/07).
4.9 percent of the total mortgage market is subprime loans with ARMs and of those 14.82 percent are in some stage of foreclosure. That's 15 percent of 5 percent?
The net effect as of 12/06/07 is that .078 percent of all homes in the U.S. have gone to absolute foreclosure. This is still less than a rounding error.

Needless to say, while foreclosures are up from past years, they are not as common as we are all lead to believe. Of course, the "scoop" supports all the news regarding the "dire housing" market, but the truth is comforting.

"America, We are being Misled", by Andrew Waite from Personal Real Estate Investor.
If you would like to read the entire article, you can contact me and request a copy.

GOOD NEWS! FHA RAISES LOAN LIMITS!

2008-03-06T11:43:00.000-08:00

HUD STATUTORY LOAN LIMITS FOR MINNESOTA
AS OF March 5, 2008

11 County Metro Other Counties
1-Unit $365,000* $271,050

2-Unit $467,250 $347,000

3-Unit $564,800 $419,400

4-Unit $701,900 $521,250

Thanks to Randi Livon at RMG for this update!

This may be just a temporary raise for 2008 so if you are interested you need to act fast!

Weekly Twin Cities Real Estate Market Activity Report

2008-03-03T19:26:00.001-08:00

Here's the latest from MAAR:

The greatest enemy of progress is not stagnation, but false progress. – Sydney J. Harris (1917–86), famed columnist

New listings for the week ending February 23 posted 1,832 units, down 10.1 percent from the same week in 2007. Signed purchase agreements (pending sales) declined from last year by 15.9 percent for the same timeframe comparison, posting 635 units. Despite the general decline in seller activity, the total number of homes for sale is ahead of this time last year by 9.8 percent. Also, this week's Weekly Market Activity Report features a new March Supply-Demand Ratio of 8.72 houses per buyer, up 38.4 percent from March 2007.

Looking for a silver lining to the weekly litany of grimacing news? Well, the seemingly endless swell in the growth of homes for sale has steadily declined. The Supply-Demand Ratio is the lowest it's been since June 2007. Housing affordability is at its highest point since 2004. And we're receiving anecdotal evidence of increased buyer traffic beyond seasonal norms over the past few weeks.

It ain't all bad news, folks. The word on the sheet may not yet match the work on the sheet, specifically pending sales, but ample supply, lower interest rates, weakening median prices and healthy affordability are all historical buyer opt-ins.

StarTribune Asks: What Sold Your House

2008-02-27T21:11:00.000-08:00

In this challenging market, everyone is looking for whatever edge they can get. The Strib is asking readers to submit their stories:

In today's challenging housing market, sellers can use a little luck. Do you have a selling superstition such as burying a statue of St. Joseph? Have other techniques brought you a buyer? What's worked for you? If you're willing to share your story with a reporter, send a note including your phone number to Lynn Underwood at Lunderwood@startribune.com.

When they come in I will print a link here. Also, feel free to email me YOUR Selling Stories to tjlarson@edinarealty.com.

Weekly Twin Cities Real Estate Market Activity Report

2008-02-25T18:16:00.000-08:00

Here's the Latest from MAAR:

With mercury dropping, snow falling, lips cracking, wet hair freezing, and cars stalling, February has mostly been an exercise in old-fashioned winter hibernation for those of us brave (or foolish) enough to live in the Twin Cities. The weather is by no means the only explanation for the lackluster showing of area home buyers—the uncertainty in the credit markets and dampened consumer confidence are obviously playing their own crucial roles—but it certainly isn't helping. That's why the uptick in temperatures seen in recent days is a welcome sight for home buyers, sellers and real estate brokers alike.

New listings for the week ending February 16 posted 1,859 units, down 8.3 percent from the same week in 2007. Signed purchase agreements (pending sales) declined from last year by 17.8 percent for the same time period comparison, posting 624 units. Despite the general decline in seller activity, the total number of homes for sale is ahead of this time last year by 12.1 percent.

Weekly Twin Cities Real Estate Market Activity Report

2008-02-18T16:46:00.000-08:00

Same Old Same Old...

Here's the Latest from MAAR:

As 2008 progresses, the picture remains relatively static. New listings are
holding steady with last year's pace, home sales remain sluggish and the total
inventory of houses for sale is at record levels—all of which points to a market in
the buyer's favor. Yes, it's been a challenge to think of fresh ways to say the
same thing every week: Sales down, inventory up. buyer's market, interest rates
low, prices low, affordability high, buy now!

"You can sense a change in the air."

2008-02-12T19:02:00.000-08:00

This press release from MAAR really sums up the current market:

Buoyed by buyer advantage and seller motivation, Twin Cities home prices continue their downward slope, resulting in improved affordability, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc.

The unignorable and ignoble news is that the January 2008 median sales price of $205,000 is a decrease of 8.9 percent from January 2007. While this is challenging news to a home owner banking on short-term value returns on their property, it's a hopeful sign of good times ahead for those who believe that the market needs accessibility before it can truly improve.

"In simplified terms, things need to go down before they can get up," said Kevin Knudsen, 2008 MAAR President. "Affordability will help kick-start the rebound. It's elementary supply and demand."

The MAAR Housing Affordability Index (HAI) shot up eight points from last month to 149, the healthiest HAI figure since 2004. Further, the number of homes for sale has tripled in the same time, creating what is arguably now the most attractive market for buyers this decade.

Despite the opportunities, home buyers remain relatively inactive. Newly signed purchase agreements (pending sales) posted 2,562 units in January, 20.7 percent behind one year ago. Similarly, closed sales declined by 21.3 percent for the same time period comparison.

Slowed sales means slowed inventory absorption, and the number of homes for sale continues to post record levels. At the end of January, there were 28,166 homes for sale, which amounts to 10.02 homes for each buyer expected during the upcoming month.

The number of new listings on the market is declining, posting 8,322 units in January. This is down 6.8 percent from January 2007, as sellers and builders continue to cut down on adding new supply.

"You can sense a change in the air," said Steve Havig, 2008 MAAR President-Elect. "Needed market corrections are accelerating, which will eventually bring buyers out of the woodwork."

Weekly Twin Cities Real Estate Market Activity Report

2008-02-11T17:09:00.000-08:00

Here's the latest on the Market from MAAR:

With both the temperature and the region's home prices dropping, home buyers who are willing to brave the harsh and cold meteorological landscape are finding the home buying environment quite warm and welcoming. The MAAR Housing Affordability Index (HAI), which measures how affordable Twin Cities housing is to its residents, jumped in February to 149—the highest level in nearly four years—thanks to continued declines in mortgage rates, a smorgasbord of homes to pick from and a seller psychology that is motivated to move and ready to negotiate.

For the week ending February 2, the number of new units on the market was 1,930—a full 10.2 percent behind the same week in 2007. The decline in listings was met by an even more hearty decline in signed purchase agreements, as pending sales fell by 28.7 percent for the same time period.

Besides the HAI, this week's edition of the MAAR Weekly Market Activity Report features updated figures for several other metrics. In January, the Days on Market Until Sale increased to 165 and the Percent of Original List Price Received at Sale fell to 90.9—both indicators of the continued advantage the buyer holds in this market. The February Months Supply of Inventory increased to 8.9 months, up 37.5 percent from this time last year. A market that's balanced between buyers and sellers would have roughly a 5- to 6-month supply of homes for sale.

Full report HERE.

Weekly Twin Cities Real Estate Market Activity Report

2008-02-04T14:34:00.000-08:00

LISTINGS UP, PENDING SALES DOWN, HUT HUT HUT!

Here's the latest from MAAR:

With the new year in full swing and the unofficial national holiday of Super Bowl XLII now under our pizza-and-beer-engorged belts, the number of homes for sale in the Twin Cities housing market is beginning its annual ascent. With just over 28,000 units on the market as of this morning, inventory is 11.8 percent higher than this time last year—a new record for this time of year. For the week ending January 26, there were 528 purchase agreements signed (pending sales), a decrease of 16.9 percent from the same week in 2007.

The net result of growing supply meeting cooled demand is a market titled in favor of the buyer—a dynamic we can clearly see in our new February 2008 Supply-Demand Ratio (SDR) of 10.02. This means that there are 10.02 houses on the market for every buyer expected this month, up 36.9 percent from February 2007—a tougher environment for sellers.

Consider the flip side of this coin. With a bounty of inventory to peruse, historically low interest rates, improving affordability and motivated sellers, this is truly one of the best times to buy real estate in recent history. Click here for this week's report.

For a closer look at how our changing market is affecting your specific community, take a look at "The 100," our localized market research tool. It offers free monthly market updates for 125 unique locales within the Twin Cities market. Year-end 2007 numbers are now available for each of these areas. Click here to access "The 100."

For a full, detailed look at how changing supply-demand dynamics are affecting various price ranges and property types in our regional housing market, take a look at our new January 2008 Housing Supply Outlook.

When Will We Know the Market Hit Bottom?

2008-01-30T15:09:00.000-08:00

This question comes up all the time and for good reason. Buyers want to know if they are buying at the right time or if they should wait until the market bottoms out. This is a pretty difficult question for anyone to answer whether they are a celebrated economist or a member of the Psychic Friends Network. When? I don't think anyone can say for certain. Perhaps later this year? Perhaps next week.

However, I did attend a very interesting seminar given by noted economist John Tuccillo where he presented a very specific formula that won't predict when this will occur but will show when it has come to pass.

That's the rub in all of this. You really only know you've hit bottom once you are no longer there. I know it seems like a bunch of mambo-jumbo but this is economics, people! It comes with the territory.

Anyway, Tucillo's take is this. There are three Signs of Recovery that you can watch for that will show the market is no longer in decline.

1. A Decline in New Listings
2. A Decline in the Days on Market
3. The Ratio of Sales Price to List Price Begins to Rise

It's pretty simple really. A decline in New Listings produced less inventory, reducing downward pressure on prices.

A decline in Days on Market shows houses are selling faster and the faster they sell the more likely the will sell closer to their List Price or in a Multiple Offer situation where Buyers try to outbid each other.

When the Sales Price to List Price ratio rises we know that Buyers are on board with what the Sellers are selling.

Tucillo said that you need about 3 straight months of this pattern to know that you are there and you can compare this month to last month, or the market a year ago, as a frame of reference.

OK so where are we right now?

1. Decline in New Listings
Looking at the latest figures from the Minneapolis Area Association of Realtors New Listings are down 1% over the past three months from where they were a year ago. So we are 1/3rd of the way there!

2. Decline in Days on Market
MAAR figures show we are UP 4.6% from one year ago -up to a sobering 158 Days on Market, on average, until sale.

3. The Ratio of Sales Price to List Price Begins to Rise
Right now this ratio is also in decline with homes selling for an average of 91.2% of the list price and this downward trend has been occurring since May of 2007 when it was 95.9%.

OK so, we have a ways to go but after hearing Mr. Tucillo speak I am a lot more encouraged about where we are at locally. He said we could likely see a couple more quarters of decline here but the signs of recovery will likely start to appear in the 4th quarter. He also is pretty convinced our national economy is heading for a recession but that it will be short and mild.

We'll have to see what happens...in the meantime I will continue to track these numbers so we will be able to say with confidence that we have passed the bottom.

Did I really just write that last sentence? No wonder I skipped out on Econ 101 when I was at the U!

Weekly Twin Cities Real Estate Market Activity Report

2008-01-28T17:13:00.000-08:00

The Dead of Winter...

With cold weather, high winds and relatively low consumer confidence, the Twin Cities housing market continues to experience low levels of buyer activity in January. Newly signed purchase agreements (pending sales) posted 485 units sold for the week ending January 19, a decline of 19.4 percent from this time last year. For the same time period comparison, new listings held relatively steady, posting 1,877 new units on the market. Roughly half of these are re-lists that have already been placed on the market at least once in the last 12 months.

Click here for this week's stats.

For a closer look at how our changing market is affecting your specific community, take a look at "The 100," our localized market research tool. It offers free monthly market updates for 125 unique locales within the Twin Cities market. Year-end 2007 numbers are now available for each of these areas.

Interesting Discussion on MNSpeak

2008-01-24T14:21:00.000-08:00

I always am interested in hearing different people's take on the current market and today over on MNspeak, a site I really enjoy there is a thread that is worth checking out.

In the coming weeks I hope to outline some tips and strategies I have seen as very effective for people interested in purchasing a second home for investment because the market is really becoming ripe for that kind of activity right now.

Stay tuned and stay warm!

Weekly Twin Cities Real Estate Market Activity Report

2008-01-22T11:44:00.000-08:00

Here's the latest from those wacky kids at MAAR:

"Plus ça change, plus c'est la même chose." – Alphonse Karr, French novelist

With the arrival of 2008, the Twin Cities housing market remained in its 2007-end holding pattern. Purchase agreements were lower and new listings held steady. For the week ending January 12, there were 4.8 percent fewer new listings on the market compared to last year at this time, while pending sales declined by 24.0 percent for the same time period. The total number of homes for sale in the region is beginning it's annual new year ascent, with 27,931 housing units on the market—up 12.2 percent from the same time last year.

This week's edition of the MAAR Weekly Market Activity Report features an updated January 2008 figure for the Months Supply of Inventory. The figure declined sharply to 8.3 months, as it usually does at the beginning of the year following the holiday inventory drop. The figure is 42.4 percent above this time last year.

For a full, detailed look at how changing supply-demand dynamics are affecting various price ranges and property types in our regional housing market, take a look at our new January 2008 Housing Supply Outlook.

Fed Slashes Interest Rates

2008-01-22T10:57:00.000-08:00

Here's the latest on today's rate cut which is sure to have big ramifications in the real estate market:

U.S. Treasury Secretary said this morning that an economic stimulus package is necessary and “as soon as possible”, as the global sell-off in stocks raises recessionary concerns here and abroad. Minutes before, Bank of America announced that its fourth quarter losses associated with sub-prime and CDO losses came in worse than expected at $5.28 billion, and commented firmly that credit risks remain highly elevated.

Separately, the Federal Reserve’s Open Market Committee this morning called for an emergency, inter-meeting rate cut of 75 basis points, reducing the rate from 4.25% to 3.50%, the largest cut by the FOMC since October of 1984, and the first inter-meeting rate cut since the Fed cut rates at the post-09/11 market re-open on September 17, 2001.

The Fed has now lowered rates by 1.75 points since September 18th of last year. The cut was not a complete surprise to the markets, and came just twelve days after U.S. Fed Chairman Ben Bernanke had stated that the Fed would remain “exceptionally alert and flexible.”

Banks have or will reduce the prime interest rate to 6.5% on this news, which will have a benefit impact to many credit facilities, including variable-rate home equity loans.

The Fed will meet as scheduled a week from today for a two-day meeting, and the market is still looking for additional easing by another 25 basis points, or more, as a downside risks to the economy and a recession are clearly an overarching concern.

A month ago, the market expected the Fed funds to reach 3.25 by year-end, and two weeks ago the market moved that year-end number even lower to 2.75%. Today, the futures market is looking for the Fed’s benchmark rate to be just above 2.0% by September.

The Dow at the open gapped down over 400 points, as expected, and has improved to minus 350 points just now. The ten year treasury stands at 3.54%, up 24/32s in price, and mortgage prices are up 11/32s in early trade. Obviously, mortgage rates will improve by 0.125% or more in a couple of hours when rates are updated.

Today’s rates may equal the lows set in June of 2003.

Toronto's Smallest House!!!

2008-01-18T11:00:00.001-08:00

A client sent me this. I am not sure where it came from but I thought it was a riot and a pretty cute home actually!

TORONTO 'S SMALLEST HOUSE IS FOR SALE ! ! !

It's nothing short of a "Glorified Tent" .. or is it?

If ...
..... You live alone or with one other person (or an extremely small dog) .. or if
..... You don't have much stuff (barely more than a homeless person) . or if
..... You miss that cute little apartment you lived in while teaching English in Japan

THEN THIS IS THE PLACE FOR YOU ! !

This house, located near the intersection of Dufferin Street and Rogers
Road is believed to be Toronto's smallest house. Occupying what used
to be a driveway, i t's a one bedroom, one bathroom home that sits on a
parcel of land 7.25 feet (2.2 metres) wide and 113.67 feet (34.6 metres)
long and has an interior area of just under 300 square feet (under 28
square metres).

Here's the living room, looking towards the back ...

Here's the kitchen. Note that despite the small space,
they've managed to fit a washer and dryer into the place.

Here's the bedroom. It comes with a Murphy be d,
which is a necessity in such a space. This is what it
looks like with the Murphy Bed down

And here the bedroom with the Murphy Bed retracted:

You also get some patio space out back.
Here it is, looking towards the front of the house:

And here's the patio looking towards the back:

Here are the home's "Listed Features":

* Completely re-done top-to-bottom, front-to-back!
* Tumbled stone entrance walk
* Renovated Bath
* Renovated Kitchen with newer stove, new cabinets and new stacked washer/dryer
* Bedroom with Murphy Bedd + "Built-Ins" ... (doubles as a den)!
* Walk-out to fenced patio
* 100 Amp service
* 2 Satellite Dishes and Receiver
* Window Air Conditioner Available

THE PRICE ? ? ?

You get all this for

$179,900.00!

Foreclosures Push Down Rents

2008-01-18T10:37:00.000-08:00

There's been a lot of talk how the market is becoming less friendly to renters. However, recent studies have shown just the opposite - and why not in the contrary, Topsy-Turvy market!

According to the National Association of Realtors, due to home owners trying to rent homes they can’t sell, rentals are abundant and prices are at bargain levels in areas hit hard by foreclosures.

Some home owners forced out by foreclosure are finding rental deals that are at "discounts of 50 percent to 70 percent off what they were paying on their mortgages," says Brenda F. Gerdes, who owns Management Specialists Inc. in Port St. Lucie, Fla.

There are 760,000 vacant condos and homes for sale nationwide beyond what the market could normally carry, in addition to a surplus of 350,000 vacant rental properties, according to Ron Witten, a Dallas-based housing analyst.

Declining employment and other signs of a possible recession don't bode well for landlords, since people who lose their jobs will resist paying higher rents or will move in with friends or family. Many displaced home owners forced out by foreclosures also are doubling up, says Mark Obrinsky, chief economist at the National Multi-Housing Council.

"Shadow inventory is coming out and competing against us for rentals," says Richard Campo, chief executive of Camden Property Trust, a Houston-based real-estate company that owns 70,000 apartments. That is weakening landlords' pricing power, he says, because home owners are less concerned about getting full market value.

Meanwhile, I have seen clients closing on the sale of their new homes with interest rates at 5.5%! Bottom line: there might never be a better time to buy than right now.

Weekly Twin Cities Real Estate Market Activity Report

2008-01-15T11:39:00.001-08:00

Holiday Hangover?

For the second straight week, the distractions of a holiday placed the Twin Cities housing market in a holding pattern. While new listings jumped from their holiday-reduced nadir the week before, they remain 25.8 percent behind the same week last year. Newly signed purchase agreements (pending sales) increased as well, but to a slighter degree than listings. Once again, the vagaries of the holiday mean these numbers have little meaning relative to the underlying market conditions.

Here's this week's numbers.

Weekly Twin Cities Real Estate Market Activity Report

2008-01-07T13:44:00.000-08:00

Weeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee!

Activity in the Twin Cities housing market saw a Valley Fair-esque drop for the week ending December 29, compared to the week before. Blame Santa Claus. New listings, pending sales and total inventory all fell at least several hundred units as Twin Citizens focused on celebrating the holiday season during the 12th snowiest December on record. Due to the unique weather and the vagaries of the Christmas holiday, little meaningful context can be gleaned from the decreased numbers.

However, we can utilize some updated figures for several key market measurements in this week's edition of the MAAR Weekly Market Activity Report. The Days on Market Before Sale increased to 158. Although this is higher than December 2006 by 4.6 percent, the figure will likely start to decrease as 2008 begins and the holiday season ends. The Percent of Original List Price Received at Sale fell slightly to 91.2 as buyers exerted their seasonal power during the slow December sales month. And our Supply-Demand Ratio for January fell to 10.46, which means there will be roughly 10.46 houses for every buyer in January.

Weekly Twin Cities Real Estate Market Activity Report

2007-12-31T16:00:00.000-08:00

OK I lied...This is the last one of the year.

Savvy buyers actively looking for a home to buy are in the driver's seat in the Twin Cities housing market. The supply of homes for sale continues to set records, with new listings for the week ending December 22 rising above the same week last year by 17.2 percent. Approximately 51 percent of these properties are re-lists that have already been on the market in 2007—a common ratio during the holiday season. Pending sales declined by 9.3 percent for the same time comparison. This is an improvement over the lackluster numbers seen last week.

HAPPY
NEW
YEAR!

"Champagne for my real friends...real pain for my sham friends."
-Tom Waits

Weekly Market Activity Report

2007-12-26T21:51:00.000-08:00

Here's the Last One of the Year:

As the year winds to a close, the supply of homes for sale remains plentiful, with 28,651 homes on the market in the region—an increase of 14.5 percent over this time last year. For the week ending December 15, there were 1,213 new listings added to the market, approximately half of which are re-lists that have already been placed on the market at least once in 2007. This is an increase of 8.0 percent in new listing activity compared to the same week last year; newly signed purchase agreements (pending sales) were 27.0 percent behind.

Reasons for Hope?

2007-12-20T11:49:00.000-08:00

It's been a challenging year for everyone in the Real Estate profession, Buyers, Sellers, Mortgage Brokers, Title Closers, Inspectors and on and on. I have seen a lot of my associates and friends really struggle to get by, myself included, in this changing marketplace. I have to believe that things will turn around, eventually. There are signs of hope: lower interest rates, reduction in inventory, better pricing. 2008 is unlikely to be a year of total rebound but I do think we will continue to see signs of a recovery. In the meantime, like you, I am thankful for my family and friends, who are always there in times of crisis. This year, more than ever, I wish them, and you, a very

HAPPY HOLIDAYS!

Weekly Twin Cities Real Estate Market Activity Report

2007-12-17T17:36:00.000-08:00

Gather 'Round the Festivus Pole!

The Twin Cities housing market has entered its annual winter holiday pause. New listings have been minimal, yet total inventory of homes for sale remains at record levels and the number of sellers continues to far outweigh the number of buyers. Conservative lending standards and decreased consumer confidence seem to be keeping home buyers away despite low mortgage rates, motivated sellers, improved housing affordability and great housing stock.

Over the last three months, newly signed purchase agreements have declined by 20.0 percent from the same period in 2006 and 34.3 percent since 2005. Meanwhile, new listings have declined by only 1.8 percent. The number of homes for sale has dropped 5,000 units in the last 12 weeks but remains 12.9 percent higher than this time last year.

The forecast calls for improved buyer activity, but it may take a year or two of gradual increases before comparisons to today's buying market are quantifiable.

CLICK HERE for the entire report.

December Market Update

2007-12-14T14:30:00.000-08:00

Visions of Sugar Plums Dance in Buyer's Heads...

Activity in real estate tends to remain slower during the busy holiday season as families focus on spending time together and plans are made for travel and holiday traditions. In preparation for the upcoming year, many people will use this time to begin thinking about home remodels, updates and getting their home ready for sale. Homes priced from $250,000 - $500,000 are currently moving better than any other price points in the market, and properties priced in the upper bracket continue to remain on the market longer. However, it’s important to note that homes continue to sell when they’re staged well and priced below the competing inventory.

We expect inventory levels to continue correcting to the number of buyers available in 2008 and we anticipate an ongoing slow change in the market throughout next year and into 2009. While credit standards are tighter, the market will continue to present great opportunities for buyers.

Always remember that real estate is local. Just like we don’t access national weather forecasts when we’re dressing for the day, we shouldn’t rely on national real estate reports to give us accurate information about our local markets. While national trends are important for economists to assess the economy, they are not all that useful in determining the metrics of a local market. A REALTOR® will always take into consideration many things when determining the value of a home, including the local competing inventory, location and nearby amenities.

Here's a few more interesting bits of info:

According to the National Association of REALTORs® (NAR), 2007 is on target to be the fifth best year on record for existing home sales (units).

Our market’s average home selling price is $266,000, down slightly (-.6 percent) compared to last year. We expect more price adjustments of 2 – 3 percent in 2008.

Builders are pricing inventory at or below existing residential, which is anywhere between a 10 – 20 percent drop in pricing. New construction inventory has declined nearly 20 percent this year. This is good news for thinning out the number of homes for sale, which, combined with the average selling price coming down, indicates that we’re poised for a slow, steady market comeback.

Homes priced from $250,000 - $500,000 are currently moving better than any other price points in the market.

Upper-bracket properties continue to remain on the market longer.

Improving Affordability in Minneapolis Real Estate?

2007-12-12T14:28:00.000-08:00

A bunch of new info regarding the November Housing Stats was released by MAAR today. Here's the highlights:

With home prices in seasonal decline and mortgage rates dropping, the buying environment is as good as it’s been since February 2005, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the RegionalMultiple Listing Service of Minnesota, Inc.

The MAAR Housing Affordability Index (HAI) increased to 141, the healthiest December HAI figure since 2003. The median sales price in November of $216,500 was 5.1 percent behind November of 2006, the largest such year-over-year decline in 2007. Since decreased affordability has been one of the leading causes of the current market malaise, these improvements bode well for the future.

Despite abundant inventory, motivated sellers and improving affordability, home buyers remain inactive. Newly signed purchase agreements (pending sales) posted 2,615 units in November, 21.0 percent behind November 2006. Similarly, closed sales declined by 19.3 percent for the same time period comparison.

The number of homes for sale has fallen by 4,000 units in the last two months. Despite the seasonal drop, inventory set a new November month-end record with 30,126 homes for sale and 13.44 homes for each buyer expected during the upcoming month.

• Declining home prices are often viewed as a negative phenomenon. In reality, lower prices bring attractive buying opportunities to the market and lay the foundation for a bright future.

• Right now, buyers are like awkward kids at a junior high dance—anxious and waiting for their favorite song. Meanwhile, the kids who recognize a good thing are already on the floor having fun.

• A revival in FHA loans, which had lost substantial market share to the risky subprime market, will provide funding for low-to-moderate income households at attractive rates.

• All of the conditions in our market are ideal for buying a home. Buyers who are waiting on the sidelines should seriously consider acting now. Otherwise, they might look back at this as a time of missed opportunity.

• Positive changes are still taking place. Affordability is improving, the lending environment is returning to solid fundamentals, interest rates are still historically low, and buyers now have a golden opportunity to purchase a home.

• Real estate is a cyclical business and fall is historically a slower time in our housing market.

• Sellers face a challenging market right now. But if you’re a first-time home buyer or a second-home buyer with no home to sell of your own, the market has been with opportunities.

• Downward pressure on home prices will continue into early next year as record inventory competes for a declining buyer pool.

• A quick and easy rebound in sales is not in the cards—our market’s recovery will be slow to start and gradual in its effect.

Weekly Twin Cities Real Estate Market Activity Report

2007-12-11T08:51:00.000-08:00

I'll take what's behind curtain number 3, Monte!

Sellers Continue to Say: "Let's Make a Deal!"

Home sales perked up for the week ending December 1, as buyers returned following their annual football-and-turkey Thanksgiving holiday. While the number of newly signed purchase agreements (pending sales) grew to 533, it was still behind the same week last year by 10.6 percent. The total inventory of homes for sale continues its seasonal drop, with 4,000 fewer units on the market now compared to eight weeks ago.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for several key metrics:

Average Days on Market Until Sale increased slightly to 148, a growth of 12.4 percent from one year ago. This figure should continue to grow through December before dropping in the first part of 2008 as more buyers return to the market.
The Percent of Original List Price Received at Sale dipped to 92.4 percent, indicating that seller willingness to negotiate continues to grow.
Mortgage Rates for the Twin Cities region fell slightly again to 6.2, which is having dramatic and positive effects on affordability.
The Housing Affordability Index (HAI) increased to 141 due to falling mortgage rates and home prices. This is the highest HAI mark since February 2005 and, if sustained, bodes well for the long-term health of our market.
Months Supply of Inventory decreased to 9.3 months, as seasonal declines in the number of homes for sale temporarily restrict inventory choice during the holiday season.

CLICK HERE for the complete report from MAAR.

Minneapolis Trends 3rd Quarter Report

2007-12-07T10:27:00.000-08:00

What's Happening Minneapolis?

For those curious about what the "pulse" of the city is during this housing downturn, a recent e-mail I got from the city, shows some very interesting developments. To wit:

Although the number of employed residents rose, the unemployment rate rose from 4.2% to 4.6%.

What industry has the highest average weekly wage?

Finance and Insurance at $2,803/week.

The lowest?

Accommodation and Food Trade at $350/week.

It was no surprise that the number of new construction residential permits decline sharply.

Housing sales were 13% slower than a year ago but prices were stable at $223,000.

Foreclosures and Boarded up buildings double in the last year but remain a small percentage of the over-all housing stock.

Nothing earth shattering but some good information nonetheless.

Here's a cool chart of Current Minneapolis Projects in Development.

Here's a link to the complete Minneapolis Trends Report.

Mortgage Rate Freeze?

2007-12-05T20:51:00.000-08:00

This is potentially very big news for anyone who signed onto a sub-prime loan in the past two years. Apparently the Bush Administration is brokering a 5 year freeze on the resets-the time when these loans are set to adjust.

Here's a part of the story:

The Bush administration has hammered out an agreement to freeze interest rates for certain subprime mortgages for five years to combat a soaring tide of foreclosures, congressional aides said Wednesday.

The aides, who spoke on condition of anonymity because the details have not yet been released, said the five-year moratorium represented a compromise between desires by banking regulators for a longer time frame of up to seven years and mortgage industry arguments that the freeze should last only one or two years.

Another person familiar with the matter said the rate-freeze plan would apply to borrowers with loans made at the start of 2005 through July 30 of this year with rates that are scheduled to rise between Jan. 1, 2008, and July 31, 2010.

I don't think I am being too cynical when I say I will believe it when I see it. That is a HUGE pile of money that Wall Street will be asked to leave on the table and I can't believe they would accept this willingly.

Stay tuned...

Attack of the Killer Monster Houses!

2007-12-04T09:05:00.000-08:00

Edina puts the Kabosh on the Kabooming of Houses

This article in the Strib is one of a series on this topic (they do sort of like to beat some subjects to pulp, see the mortgage/real estate "crisis" for more examples.)

I'm not sure how I feel about the idea of stopping this kind of development. As a good neighbor and architectural "purist" I am often put off by the look of some homes, usually new homes, are built in older neighborhoods. They seem to be out of place and out if scale.

On the other hand, there was a new house that is on my block that, although it is quite large, it is in a style that really seems to fit with the 1920's dominated styles on my street. It really looks like a lovely home and I might add, the place that was demoed to make way for it really needed to go. It was a tiny rambler, set way back on the lot like you see from time to time, that had been vacant for some time.

So there's the debate. Old vs. New. Tradition vs. Progress. It's an age-old dilemma and I think where you stand on it has more to do with your personal tastes than anything else. From a real estate standpoint, new construction is almost always a surefire way to raise the surrounding property values. I guess if your view of the lake or park is suddenly blocked by your new giant neighbor, that would be unfair, I know I would be angry...

So...perhaps rather than a moratorium the Cities should set up a committee of residents who could looks specifically at these projects on a case by case basis. I know there are already zoning committees but they are usually swamped with commercial issues. I don't know. Adding more hoops for people to jump through may be a bad idea.

Issues like this are sometimes easier to say: "Go ahead and build that....just not on my block!!!"

UPDATE: Edina remains home to "McMansions"

Weekly Twin Cities Real Estate Market Activity Report

2007-12-03T19:37:00.000-08:00

The Song Remains the Same

As expected, we are continuing to see a decline in home sales in the Twin Cities housing market. For the week ending November 24, there were 329 newly signed purchase agreements (pending sales), a decline of 32.2 percent from the same week last year. The severity of this sudden decline is abnormal enough to imply a statistical fluke caused by a small sample size and the vagaries of a major holiday week. How the market performs next week will provide a good indicator of its true direction.

This week's edition of the MAAR Weekly Market Activity Report features an updated Supply-Demand Ratio (SDR) for 2007. The figure increased to 13.44, which means that there are 13.44 homes on the market for every buyer in the month of December, an increase of 34.1 percent from last December. The SDR rises each year in the final months due to the dramatic decline in holiday season home buyers.

Click here for this week's full report.

Sandless Wood Floor Refinishing?

2007-11-29T21:10:00.000-08:00

^^^^^^^^^^^^^^^^^^^BEFORE^^^^^^^^^^^^^^^^^^^^^^^^^^
***********************AFTER!*********************************

I sell a lot of homes with hardwood floors. I have hardwood floors in my hose and I have been wondering when I can take my wife and child and 3 dogs and 1 cat on a cruise so that we can be out of the house for a week and I can pay someone a MILLION dollars to get my floors redone.

Yep. We're talking pure Fantasy Island.

But wait! I open my e-mail spam today and I read this:

Mr. Sandless™ makes refinishing wood floors quick, affordable and painless! There is no mess to clean up, no odors, and service is complete in just hours. We are always less expensive than sanding, and everything we use is kid and pet safe. There is no better way for your wood floor refinishing needs!

I checked out the WEBSITE and it looks legit! Could this be the answer to my hard wood dreams? I am curious, gentle readers, if any of you have used this service. If so, please post your comments here. If not...perhaps I will be the Guinea pig and check these guys out...

TODAY'S REDUCTION is TOMORROW'S GAIN

2007-11-28T22:19:00.000-08:00

I realize that the plural of "anecdotal" is not "data" but here's what I have seen in the market lately.

A house that sold Fall of 2006 now listed for $214,000.

A house that sold for $230,000 in 2004 now listed for $114,000.

A house that sold for $235,000 in 2005 now listed for $199,000.

It goes ON and ON and ON.

If you are a renter or a first time buyer or an investor I urge you to seriously consider some of the opportunities that are out there. I have never seen prices like this in my career and something tells me this can't last. Once the inventory gets thinned out prices will stabilize.

And the news is not bad for all Sellers. I still see properties that are competitively priced selling in MULTIPLE OFFERS. But if your equity is tapped out it's not a great time to be on the market.

And for Buyers consider this - TODAY'S REDUCTION is TOMORROW'S GAIN.

Whether or not you reap this windfall is entirely up to you...

Weekly Twin Cities Real Estate Market Activity Report

2007-11-26T21:15:00.000-08:00

Slow Train Comin'

Here's the Latest from MAAR:

Despite recent favorable drops in mortgage rates and improvement in housing affordability, buyer activity remains slow in the Twin Cities housing market. For the week ending November 17, there were 545 new purchase agreements signed, down 17.7 percent from the same week in 2006. As we enter the holiday season, sellers continue their annual pause, as the number of new listings on the market and the total number of homes for sale have been in a general seasonal decline for more than eight weeks.

Click HERE for the full report.

Local Mortgage Brokers Drop by Two-Thirds!

2007-11-20T14:02:00.000-08:00

Of all the sad and scary stats this one really defined what is happening in the local housing industry:

Minnesota Mortgage Association President Tim Bendel said his industry has taken a hit, too. Brokerage license applications came up for regular review at the end of last month, Bendel said, and early indications are the number of licenses dropped from 4,000 to about 1,400.

Wow. That is staggering. It seems the Day of Reckoning is here for the Realtor as well. Dues to the tune of about $400 bucks are due in the beginning of December and are required for anyone who wants to keep their license. I remember last year at this time the Executive Director of the Minnesota Association of Realtors was actively campaigning members NOT to renew in an effort to thin the herd. I have heard very little of that this year, it seems the market is doing that all on its own...

Weekly Twin Cities Real Estate Market Activity Report

2007-11-19T17:32:00.000-08:00

Here's the latest from MAAR:

The rapid flattening in fourth-quarter sales can be viewed as a positive sign, as compared to the third quarter, when buyer activity was in rapid decline.

Over the last two weeks, newly signed purchase agreements (pending sales) are behind the same period in 2006 by 15.2 percent, as compared to the last three months when sales dropped by 21.5 percent. Recent listing activity has declined by 4.6 percent, as compared to last year. The total inventory of homes for sale is dropping as we near the holiday season.

CLICK HERE to see this week's stats.

November Market Update

2007-11-15T14:24:00.000-08:00

While we experienced exceptional activity in our local real estate markets from about 2001 - 2005, it’s important to remember that real estate is a cyclical business. Historically, the Midwest has always been slower than coastal markets, remaining steady and somewhat predictable; we tend not to undergo some of the extreme highs and lows that other markets do. And, similar to its cyclical nature, real estate is seasonal with activity slowing in autumn and around the holidays.

Builders and buyers continue to exercise caution, which has resulted in inventory growing at a slower pace than the record levels of 2006. In fact, while it’s still at historic highs, inventory is only 10 percent above this same time last year. This is good news for thinning out the number of homes for sale, which, combined with the average selling price coming down, indicates that we’re poised for a slow, steady market comeback. To help put the current market into perspective, we should recognize that according to the National Association of REALTORs® (NAR), 2007 will be the fifth highest year on record for existing homes sales!

We see motivated buyers and sellers, but at the same time, we’re now experiencing a return to more traditional, stricter lending practices that were in effect before the boom. According to NAR, conditions in the mortgage market are improving overall for consumers, which will help to release some pent up demand in early 2008. And, while tighter credit standards are believed to be a factor in the recent decline in home sales, the decline in home prices and interest rates have also helped keep housing affordable. While some sellers may wish for a higher sale price, it’s important to remember that most sellers are also buyers – and this market offers great buyer opportunities, whether it’s your first home, next home, vacation home, or an investment property.

Another Negative Strib Article about Real Estate

2007-11-13T23:11:00.000-08:00

Sometimes I wonder why I subscribe to this paper! Seriously they seem to get off on mentioning every possible negative twist the market takes. So here's the article for your perusal but I did want to highlight the interesting ray of hope it contains:

Sales of existing homes last month were down 17.7 percent from October 2006, but more purchase agreements were signed than in September, perhaps reason for optimism.

Hooray!

Weekly Twin Cities Real Estate Market Activity Report

2007-11-13T23:09:00.000-08:00

Here's the Latest from MAAR:

As mortgage rates decline and home sellers appear increasingly willing to accept moderate offers, home sales have picked up slightly in recent weeks. Newly signed purchase agreements (pending sales) for the week ending November 3 were behind last year at this time by only 13.6 percent. New listings on the market also increased, up 7.3 percent for the same time period comparison. This week's edition of MAAR's Weekly Market Activity Report features updated figures for several key metrics:

Days on Market Until Sale in October was 142 days, an increase of 20.3 percent from one year ago.
Percent of Original List Price Received at Sale declined further to 93.1 percent and should continue to fall until early 2008.
The November Housing Affordability Index increased dramatically to 138 due to declines in mortgage rates and home prices, an important trend for the long-term health and accessibility of our market.
Months Supply of Inventory declined slightly to 9.5 months due to the annual drop in the number of homes for sale that takes place in November.

We have also updated figures for The 100, our popular city-by-city market snapshots for more than 100 Twin Cities communities. view the latest figures for The 100

Tricks of the Trade Part 1

2007-11-07T22:13:00.000-08:00

Minneapolis Truth in Housing

All properties sold in Minneapolis, as well as several other communities in the metro, require a Truth in Sale of Housing Inspection Report.

In Minneapolis it works like this:

The Truth-in-Housing ordinance is meant to provide accurate information on the condition of property for sale and to help Minneapolis keep up the quality of housing available in the city.

Types of residence

Single-family houses
Duplexes
Townhouses
First-time condo conversions

Types of sales

Sale by owner
Sale by real estate agent
Real estate agent-assisted sale
Contract-for-deed
Other title transfer

The Truth in Housing Ordinance requires:

1. An evaluation to say what condition a house is in.

After February 26, 2007, a copy of the evaluation, the Certificate of Approval (if issued), the list of violations, can be found on the City of Minneapolis website.

2. Repairs must be made when a house is sold. (Learn more about required repairs.)

A licensed evaluator must complete a Truth in Housing evaluation and provide a disclosure report before any single-family house, duplex, townhouse, or first-time condo conversion can be shown to prospective buyers.

The Truth in Housing Evaluation, also known as the disclosure report, must be displayed on the property so potential buyers can look at it.

A re-inspection must be done after any required repairs have been completed. This is separate from the initial evaluation.

If you are ever curious about a specific property you see listed check out this Minneapolis Property Info page.

Not only can you see and print the latest Truth in Housing Inspection but you can also see a history of other permits that were pulled on the property.

Information is power! Your agent should always be getting you as much info as possible about the properties you are interested in and there are many resources available. Knowledge is power!

Could Mortgage Rates Drop to 5 Percent?

2007-11-06T23:10:00.000-08:00

Plus- Every Home to Come with Five Pound Box of Money!!!

OK... so this sounds too good to be true but someone, and not just someone (Bill Gross, chief investment officer of Pacific Investment Management Co - the Worlds LARGEST Bond Fund) said this on CNBC:

"The Federal Reserve cannot afford to let U.S. housing prices fall and will have to cut interest rates aggressively to prevent it from happening."

A Fed cannot afford to let homes go down by 10 to 15 percent like we saw in Japan. We've only begun to see the pain from the standpoint of the home owner in terms of those monthly payments. Defaults and delinquencies will increase as we extend throughout 2007 and then into 2008."

Gross expects the Fed to cut the federal funds short-term rate to 3.5 percent, which implies that the 30-year mortgage rates will come down to 5 percent to 5.5 percent.

So...will THAT finally be the straw that stirs the Buyer's drink?

Stay tuned...

Great Resources for Fixer Uppers!

2007-11-06T11:12:00.000-08:00

Communities Offer Grants & Loans to Fix Up Homes!

There are some TREMENDOUS opportunities in the current market. Not only are there foreclosures (which still are only a very small percentage of available homes -don't believe all the media hype!) but a number of other homes priced very low. A couple of years ago it seemed impossible to find anything under $200,000 and if you did it sold quickly in competitive offers or was beyond saving (needed too many repairs).

Now I am seeing single family homes around $150,000 - and below- that with some minor repairs and hard work can be made into gems. You have to look for GOOD BONES when looking at these kind of properties.

What are GOOD BONES?

1. Solid Mechanicals
Are the furnace, plumbing, electrical in decent shape? Look for copper pipes and make sure check to see if the electrical has been updated to 100 Amp circuits rather than 60 Amp fuses.

2. Demand Features
Is there hardwood under the carpet? Are there other features - built in buffet, breakfast nook, fireplace, that add intrinsic charm and value?

3. How's the Roof?
Replacing a roof can be expensive. The good news is that most will last 20 years. Looking at the roof you can usually tell if it looks old (but always hire an inspector) and you can check the City's records to see when the last permit was pulled to do the roof to determine the age.

4. What about Water Troubles?
If you detect a lot of water in the basement, which can often be addressed through landscaping, it can sometimes mean foundation or mold issues. Give it the "sniff test" and proceed with caution if things seem musty. Like my Inspector friend has told me several times: "If it's wet, there's mold. It's all just a matter of how much."

5. Truth in Housing Report
In Minneapolis, and other cities, a Truth in Housing Report is REQUIRED for all properties sold. Often times with estates and foreclosures the Seller requires the Buyer to assume these. Always check the cities' website -CLICK HERE FOR MINNEAPOLIS- for access to the Truth in Housing Report.

WHERE TO FIND HELP

Here is an excellent resource guide published by the city that lists all of the available loans for fixing up your home as well as programs to help pay the costs of city required repairs.

You can download it here: Housing Programs Resource Guide

Here are some other excellent resources for Buyers:

Association of Community Organizations for Reform Now Housing (ACORN)
-First time buyer classes, help with lending.

Community Action Partnership of Suburban Hennepin
-Programs include mortgage foreclosure prevention and rehab advice.

Minnesota Housing Finance Agency
-Housing assistance programs for low and moderate income residents including down payment assistance.

Community Neighborhood Housing Services
-A resource for St. Paul

Please contact me with any questions and Happy Hunting!

Housing Supply Outlook

2007-11-05T13:18:00.000-08:00

This Report bears spotlighting:

New construction listing inventory continues to drop as builders cut back on new projects and focus on selling existing units. The number of new constructionunits on the market has fallen by 17.5 percent when compared to this time last year and are being sold at 7.4 percent less per square foot.

Condominuims face a tough road ahead. Their sales have dropped the most of any property type, keeping their supply levels high despite a dropoff in new listings.

The middle-upper price ranges found between $250,000 and $500,000 are more stable than others, seeing far less growth in inventory than other price ranges and a relatively smaller drop in buyer demand.

Massive inventory growth is taking place in the lowest price ranges, possibly due to the role of subprime foreclosures.

CLICK HERE for the complete report.

Weekly Twin Cities Real Estate Market Activity Report

2007-11-05T13:13:00.000-08:00

Here's the Latest from MAAR:

With mortgage rates falling and a plentiful harvest of homes to choose from for area buyers, the pace of declining home sales in the Twin Cities has slowed slightly in recent weeks. Newly signed purchase agreements (pending sales) were behind this time last year by 16.7 percent for the week ending October 27, an improvement from the large declines seen in late September. While the inventory of homes for sale is still at a record high, it is beginning its annual autumnal drop and should continue to wane through the rest of 2007.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for Mortgage Rates and Supply-Demand Ratio. Rates have fallen dramatically in the last two months, teaming up with home price declines to create important improvements in affordability that will benefit our market down the road. The Supply-Demand Ratio of 11.22 means there are 11.22 homes on the market for every buyer.

For a detailed look at the way our changing market is affecting buyers and sellers in various submarkets affected by price range, property type and construction status, take a look at our Housing Supply Outlook. Dig deeper.

Mortgage Rates Continue to DROP!

2007-11-01T12:11:00.000-07:00

The buzz today is all about the latest Fed Cut to the rates:

Mortgage rates drop to five-month low

Mortgage rates hit lowest levels since May

Fed Cuts Rates a Quarter-point

So...while this no doubt is good news it will be interesting to see if the Strib manages to spins some GLOOM into this story. It probably won't be very hard - some of the stories are already blaming the poor housing market for the rate decline. Interesting dichotomy at work there!

In any event, those looking to BUY are finding it a bit eassier today than yesterday and that can do nothing but help break the ice!

Local Link Round Up

2007-10-29T12:24:00.000-07:00

Lost of Local Real Estate Stories in the media this past weekend and...none of it good...imagine that!

Here's a sampling:

Will Congress pass relief for delinquent homeowners?

Wave of foreclosures hits renters

Struggling to escape the subprime swamp

Vacant homes rise to record

At least someone seems to be benefiting from all of this...the newspapers!

The good news is that usually by the time the media is at such a feeding frenzy they worst is over. I think we have hit bottom.

The future is BRIGHT!

Weekly Twin Cities Real Estate Market Activity Report

2007-10-29T12:23:00.000-07:00

Here's the latest from MAAR:

As the fall season progresses and we move toward winter, the number of homes for sale in the Twin Cities is in the midst of its annual decline. Total inventory in the 13-county region has fallen by almost 2,000 units in the last two months and should continue to drop through the remainder of 2007. Despite the seasonal dip, home sellers who choose to leave their homes on the market will still face a tough market, as the number of buyers is relatively low. Newly signed purchase agreements (pending sales) for the week ending October 20 were behind the same week last year by 18.1 percent.

For an easy-to-use and consumer-friendly look at the local housing market, take a look at our Monthly Indicators.

Foreclosures - Too Good to be True?

2007-10-25T21:06:00.000-07:00

There's been A LOT of attention by the media lately regarding the mounting numbers of foreclosed properties that are available on the market. Recently there was an auction held were something like 150 metro area homes were auctioned off. Consequently I have been getting lots of calls from my clients asking if these deals they are reading about are too good to be true.

My short answer is - yes.

If you look closely at some of the deals mentioned recently in the Strib you will see that while it's true some properties sold at auction for perhaps as much as 50% less then they sold for just a few years ago there are factors that were really glossed over.

1. Condition
Most foreclosure properties are a mess. It takes a keen eye to separate the simple problems that can be fixed by a lay-person and the complex ones that might require lots and lots of money and time to fix.

2. Location
Most of the Super Bargains mentioned in the story are in locations that have seen rough times. Sometimes that means a higher crime rate and potential property damage. So not only did you just buy yourself a bunch of repair headaches you also might have found yourself in a location that will make it very difficult to recoup the money you spent fixing the place up.

3.Over-Priced Homes
People may want to ask why these "deals" look so good now and the answer is during the Boom there were quite a few properties that sold for way above market value. Then -BAM- the market slows down and the real market price re-emerges. Often times people believe that what goes down must go back up again -and fast - that the price will jump back up again in a few short months.

Unfortunately it doesn't work that way. Not usually. The steep rise in prices we saw from the late 1990's thru the early 2000's didn't happen over night. It takes time. Patience, Grasshopper. That is part of the reason we find ourselves in this current state: unrealistic seller expectations.

Will prices go up? Yes. They always have and they always will OVER TIME. You need to have that essential ingredient. Real Estate is NOT a get rich quick scheme.

How can you increase your odds?

Pay close attention to LOCATION and CONDITION.

Especially LOCATION, LOCATION, LOCATION! It's a cliche' for a reason. It matters! You can have the greatest house in the world but if it it in a tough location - Good Luck! And in a market with so much inventory (read: Competition) you have to be in absolute Tip Top Condition. The cheap fixes no longer work. Buyer's can sniff out quality finishing. Shabby, mismatched kitchen cupboards? Nope. Worn Carpet? Get rid of it. Outdated appliances? That's a No-No.

If I sound harsh I don't mean to be but just because I'm a Realtor doesn't mean I can't be Real! Contact me for more tips on how you can afford the pitfalls and have success in this changing and challenging market.

Featured Listing - Nokomis 2 Story Colonial!

2007-10-23T10:52:00.000-07:00

NEW FEATURE!

LISTING OF THE WEEK

Lost in all of the GLOOM and DOOM reporting of the local housing market is the SIMPLE FACT that there some GREAT DEALS for Buyers in the current market.

In an effort to flip the script and get some positivity I have decided to start a new feature here where I put the spotlight on a different listing each week. Your comments on price and condition,as always, are welcome!

4813 15th Ave S

Open this Sunday 1-3

CLICK HERE FOR MORE INFO!

CLICK HERE FOR 360 Tour!

MLS REMARKS: Beautiful 2-sty traditional Colonial w/excellent curb appeal. Demand area 1/2 blk off M'haha Pkwy. Over $35K in new low-maint prof landscaping! Hdwd flrs, charming Oak built-ins, piano windows, updtd kit, 3 BR on 1 lvl, 3-season PO & new paver patio. LISTING INFORMATION (Last Updated 10/23/2007 12:47 PM):

County:

Hennepin

Foundation Size:

616 Sq. Ft.

Number Bedrooms:

Subdivision:

Boulevard Terrace

Baths (Full & Partial):

Year Built:

1926

Approx. Sq. Ft.:

1320

Exterior Type:

Metal, Vinyl

Garage

Property Style:

2 Story

Property Type:

Single Family

Stories:

Lot Size:

0.11 Acres

SCHOOL INFORMATION:

School District:

MINNEAPOLIS - 1

ADDITIONAL INFORMATION:

Above Ground Square Feet:

1320 Sq. Ft.

Development Name:

Boulevard Terrace

Finished Area:

1320 Sq. Ft.

Sewer Type:

City Sewer - Connected

Water Type:

City Water - Connected

INTERIOR FEATURES:

Appliances:

Dishwasher, Disposal, Dryer, Exhaust Fan/Hood, Microwave, Range, Refrigerator, Washer

Cooling Type:

Window Air Conditioning

Floor Styles:

Hardwood, Tile

Heating Delivery:

Other

Heating Source:

Gas Heat

Basement Description: Full
Number of Fireplaces: 1
Fireplace Description: Living Room, Wood Burning
Handicap Features Description: None

Additional Interior Features: Kitchen Window, Local Area Network, Multiple Phone Lines, Natural Woodwork, Washer/Dryer Hookup, 3 BR on One Level

ROOM INFORMATION:

Bedroom, Upper	14x10 Feet
Bedroom, Upper	12x9 Feet
Bedroom, Upper	18x10 Feet

Dining Room, Main	12x11 Feet
Kitchen, Main	11x11 Feet
Living Room, Main	21x11 Feet
Three Season Porch, Main	17x12 Feet

Number of Full Baths: 1
Number of 3/4 Baths: 1

ADDITIONAL ROOM INFORMATION:
Dining Description: Eat In Kitchen, Separate/Formal Dining Room
Bath Description: 3/4 Basement, Upper Level Bath

EXTERIOR FEATURES:

Garage Spaces:

Parking Description:

Detached Garage

Patio

Roof Type:

Asphalt

LOT FEATURES:

Lot Size:

0.11 Acres

Lot Dimensions:

122x40

Fence Description: Wood
Other Lot Features: Road Frontage- City, Curbs, Paved Streets, Sidewalks. City Bus (w/in 6 blks)

COMMUNITY AMENITIES:

Amenities:

Bus Line

FINANCIAL CONSIDERATIONS:

Assessments:

Homestead

Price:

$349,900

Tax Amount:

$4,086

Tax Year:

2007

Tax/Property ID:

H1402824130048

Terms:

Cash, Conventional, DVA, FHA

Weekly Twin Cities Real Estate Market Activity Report

2007-10-22T17:57:00.000-07:00

Here's the latest from MAAR:

Buyers remain firmly in the driver's seat in the Twin Cities housing market, but sellers have begun to do a little backseat driving. Over the past three months, sellers have put 6.0 percent less homes on the market than they did for the same period last year. And for the week ending October 13—our most recent reporting period—they put 7.9 percent less homes on the market. While inventory is still at record highs and sellers are still competing for a smaller pool of buyers, signs of slowing seller activity are welcome news for an oversupplied housing market.

Newly signed purchase agreements (pending sales) for the last three months have declined by 20.5 percent relative to the same period in 2006, with the most recent reporting week seeing an 18.3 percent decline. The total number of active listings on the market has begun its annual autumn drop, with incremental dips each week for the last 5 weeks.

To get a simple and easy-to-understand look at overall conditions in the Twin Cities housing market, take a gander at our Monthly Indicators tool.

The Long View

2007-10-18T16:43:00.000-07:00

Lawrence Yun, Chief Economist of the NAR has this to say about the current Real Estate Market:

“How much have real estate investors lost due to the housing market bust?”

That was the (highly loaded) question posed to me recently by a producer of one of the major evening news programs. The show wanted to run a story about the "pains" being felt in the market.

Hmm. Well, exactly how much real pain are we talking about? Let's look at a couple of examples. An investor who bought a property in Las Vegas five years ago would be ahead by $150,000; up $200,000 in Miami. The average investor nationwide – up $54,000. Only the recent buyers (flippers) who bought last year in few specific markets would have encountered a loss.

Not All Losses Are Created Equal
I’m not discounting the discomfort of those who lost big, especially lenders and hedge funds who had large exposures to subprime loans. Investors in homebuilder stocks have certainly experienced pains. But nearly all real estate investors who have a reasonable holding period are doing quite fine. Some of these fortunate buyers who got into the market several years ago will still consider a modest give back as a loss without considering the large gains reaped during the housing boom. That’s the nature of the human mind. A gain of $190,000 in Miami feels like a $10,000 loss considering that the gain had been $200,000.

A Home is Not a Stock Certificate -- Thank God!
Foreclosures are rising and construction workers are being laid off. REALTORS® are feeling the pinch as well. The median income of a typical REALTOR® has been falling due to the correction in sales transactions. However, consumers and homeowners who are in it for the long-term are once again coming out well ahead.

Because of the power of leveraging, $10,000 used for a down payment on a typically priced home in the United States at a typical appreciation rate of 5 percent will return $110,000 after 10 years. The same $10,000 invested in the stock market appreciating 10 percent annually will result in $23,600. No wonder the data from the Federal Reserve show consistent results year-after-year of the staggering difference in net worth between homeowners and renters. A typical homeowner had $184,400 in net worth versus only $4,000 for a typical renter.

The Spooky Thing
The lack of buyer confidence to enter the market has been the one principal reason in holding back home sales. Many would-be buyers are spooked of a possible home price decline. And the media is fueling that fear. Some of the most popular market gurus who offer their advice on television and other media say so. Caution is in order, however. As a recent Barron’s article pointed out, stock picks made by one such expert actually underperformed the market.

Opportunities to Seize
It’s also important to point out that times of crisis often turn out to have been times of opportunity in hindsight. With over four million net new job additions in the past two years– the time frame during which home sales have steadily fallen – a significant pent-up demand has developed. Home sales and home prices will be higher in 2008 compared to 2007. And, as with any investment, look longer term. Those investing in a home and keeping it for a typical holding period of six to ten years will likely see their investment pay off; those homes will have been a good investment.

As for stocks, they are not the enemy of real estate. Many REALTORS® own stocks. (So do many economists!) The latest NAR research on vacation-home buyers reveals that many of them rely on stock market wealth to fund that second-home purchase. Stocks and real estate both promote the importance of private ownership.

Where to Throw the Darts
Of course, with housing figures down, all eyes at looking to the stock market. Indeed, the stock market is at an all-time high. That's terrific in and of itself and reflects confidence in the U.S. economic outlook. Just be careful about taking specific advice from any hyper-emotional TV personality. Darts should not be thrown at publicity posters of any "mad money" host. You’ll likely have just as good of luck by reining in your emotions (and money) and throwing them randomly on the financial pages of your newspaper for your next stock pickings.

The Airport Noise Settlement has been APPROVED!

2007-10-16T17:59:00.000-07:00

Minneapolis Approves

Airport Settlement

$127 million Agreement Provides Airport Noise Protection for 9,560 Metro Homes

Oct. 16, 2007 (MINNEAPOLIS) –Minneapolis Mayor R.T. Rybak today signed the unanimous City Council action to approve a proposed settlement that will provide significant and meaningful relief from airport noise pollution for residents in the cities of Minneapolis, Richfield and Eagan.

“More than 9,000 residents, most who live in Minneapolis, will now get significant protection from airport noise pollution,” Mayor Rybak said. “That was part of the original deal for expanding the airport more than a decade ago. When that promise was broken, we stood up for our citizens and today we delivered for those people who have waited too long for justice.”

“This forever changes the relationship between an airport and its surrounding neighborhoods that were ignored for too long,” Rybak added. “The airport is critically important to this city and state and we want it to succeed, but that success needs to be accomplished in partnership with the people and neighborhoods most affected.”

The settlement stems from an airport noise lawsuit brought in 2005 against the Metropolitan Airports Commission (MAC) by the three cities and the Minneapolis Public Housing Authority. The $127 million settlement provides $100 million more in noise relief than the MAC originally offered and is nearly double the amount in a proposed settlement of a separate class action lawsuit.

“This settlement has been a long time in the making and provides significant noise relief for the residents of South Minneapolis,” said City Council Member Scott Benson (Ward 11). “As with any compromise, it is acceptable but not fully satisfactory to either side. While not everyone who was promised full relief will receive it, this settlement provides more homes with more benefits sooner than any other alternative.”

“This isn’t about putting money into people’s pockets,” said City Council Member Sandy Colvin Roy (Ward 12). “This money will be invested into Minneapolis’ housing stock, which is an essential part of the city’s infrastructure. Sheltering the most affected residents from airport noise will stabilize parts of the community, and in the process will benefit the city as whole.”

Richfield and Eagan will consider the settlement at their respective city council meetings tonight. Mayor Rybak said that he looks forward to working with leaders in all three cities to communicate the impact of this settlement for the affected residents.

If approved by all three cities, the settlement also requires that three conditions be met:

Judge Stephen Aldrich must approve the proposed consent decree.
The Federal Aviation Authority (FAA) must sign off on the settlement no later than November 30, 2007.
Plaintiffs in the separate airport noise class action suit must structure the terms of their settlement in a manner consistent with the cities’ lawsuit, and this must occur within 90 days of the issuance of the judge’s consent decree.

The proposed settlement agreement between the cities and the MAC offers significant noise relief to airport neighbors. Specifically, the settlement calls for the MAC to:

Provide noise protection to homes in the 63-65+ DNL (day/night noise level) in the 2007 noise contour. There are around 450 homes in this DNL eligible to receive a 5 decibel noise reduction package. To reduce jet noise by 5 decibels inside a home, noise mitigation may involve air conditioning, wall insulation, new windows and doors, roof baffles, furnace, ductwork, etc. This work would occur between November 1, 2008 and December 31, 2009.

Install central air conditioning in one, two and three-family homes in the 60-62 DNL noise contour created in 2007 if they do not have air conditioning. These homes would also receive insulation and other noise mitigation improvements up to a value of $4,000 from a pre-established menu of possible improvements. Households in this noise contour that already have air conditioning would be allowed to select from a pre-established menu of improvements up to a value of $14,000. The noise protection menu to be established in the future would likely include items such as insulation, sealing and caulking, acoustical windows, etc. This work would be done between December 1, 2008 and December 1, 2012. This noise contour encompasses more than 5,340 eligible homes.

Install permanent, through-the-wall air conditioning units and acoustical air conditioning covers in apartment and condominium buildings in the 60-64 DNL noise contour. Roughly 1,930 units are located within this 2007 noise contour. This work would be done between December 1, 2008 and December 1, 2010.

Provide an estimated $6 million to cover the costs of noise mitigation work for homes located between the 2007 and 2005 60 DNL noise contours. This could include up to 1,835 homes. Reimbursement would only be provided for work done after the date of the settlement, not for past noise abatement improvements.

The noise mitigation work outlined in the settlement includes an inflation factor to cover rising costs for future work over the next five years. Additional terms of the settlement agreement call for MAC to pay $2.25 million to the plaintiffs for reimbursement of attorney’s costs.

Weekly Twin Cities Real Estate Market Activity Report

2007-10-15T23:07:00.000-07:00

Here's the latest from MAAR:

Despite an environment of improving affordability, motivated sellers, low interest rates and a large amount of homes to choose from, buyer hesitancy in the Twin Cities and national housing markets continues. While enjoying a nice rebound from the previous tepid weeks, Twin Cities pending sales were behind this time last year by 20.9 percent for the week ending October 6. New listings on the market were even with last year for the same time comparison.

This week's edition of the MAAR Weekly Market Activity Report features an updated October 2007 Months Supply of Inventory figure of 9.9 months. This means that it will take the current inventory of homes on the market roughly 9.9 months to sell through completely. The largest growth in supply in the last year has been in the lower price ranges.

Click the logo for more info!

New Monthly Market Update

2007-10-15T11:11:00.000-07:00

Edina Realty now offers a concise, easy to digest Monthly Market Update. You can see the highlights above or click here for this months report.

One of Every 16 Americans is Buying a Home This Year

2007-10-11T22:46:00.000-07:00

One of Every 16 Americans is Buying a Home This Year!

That really floor me when I read that stat! I had to repeat it! Also, according to the NAR's head number cruncher Lawrence Yun, 2007 will end up being the 5th highest year on record.

OK can you tell I am searching for a silver lining? Well, while I am at it here's a few more gems from Yun:

Mortgage Rates Will Stablize Favorably
Despite the headline news coverage of turmoil in the mortgage market, mortgage rates have actually been falling for borrowers who take out prime conforming loans. Because these borrowers account for the majority of home buyers, affordability conditions for most buyers have improved. FHA loans – the traditional financing vehicle for low-and-moderate income households – have also begun to build market interest and momentum. FHA loans offer very attractive rates nearly comparable to those of conforming loan rates and save homeowners a bundle – about $180,000 in lower interest payments over a 30-year loan cycle compared to high-interest rate subprime loans. A near-certain legislative change that will allow higher FHA loan limits in high cost areas will further free up the mortgage market to offer safer alternative products (i.e., FHA loans) and away from subprime loans. It is important to note, though, that subprime loans may make sense for some home buyers such as young couples with large income potential but little downpayment. But the subprime market share at most should be no more than 5% rather than the 20% market share of recent years.

While mortgage rates look good for conforming and FHA loan clients, the same is not true for jumbo loan borrowers. Without the backing of a guarantee by Fannie Mae and Freddie Mac, bond investors are shying away from jumbo loans. As a result, interest rates on these large loans have increased and will significantly hold back home sales in the high cost housing areas like California. The whiplash will be short-term, however. After sorting through the numbers, bond investors will likely conclude that jumbos are quite safe – even without the government guarantees. A million dollar borrower generally has solid credit and pays bills on time. Any temporary legislative change in raising the loan limit well above the current $417,000 or in permitting the GSEs to purchase jumbos loans to include in their portfolios will mitigate the crisis. (The median prices will artificially trend lower during the period of jumbo loan crisis just due to fewer higher priced home sale transactions).

Pent-Up Demand Will be Unleashed
Consider this – four million net job additions in the past two years during the housing market slump. Yet, home sales have fallen. As home sales fell, people doubled and tripled up because apartment rents increased at their highest pace in five years. These people are waiting to buy a home. Then there are the approximately two million marriages that occur each year. Those newlyweds are waiting to buy a home. About four million babies are born each year – forcing some families to consider trading up from a smaller house or condo to a larger one.

Homebuilders Take Heed
The inventory of both new and existing homes is at high levels. Builders have already cut back production and are encouraged to cut back even further. The market needs less inventory additions in a time of transition. Wall Street should and will punish any builders who add to inventory in the current market. Why build only to lose money on the home? With builders cutting back, inventory will fall. Some home owners of vacant homes will also consider the juicier rent growth and take their “empty” home off the market. In addition, many owners are in a no hurry to sell their home that they actually occupy (except perhaps for those in the few areas of the country that are losing jobs), and they may also choose to delay listing their home for sale or de-list it. Unleashing of that pent-up demand for home buying will also eat into inventory.

Drawing Down the Inventory
The law of (lower) supply and (higher) demand will then firm up home prices. The media will be forced to report on the price gains. Many potential buyers, with solid financial wherewithal, will regain confidence. The wheels of housing turn faster and faster. The full unleashing of the pent-up demand could mean about two million additional homeowners. Such absorption into the marketplace will bring down the current existing-home inventory of four million units and the new home inventory of one million units to a total of three million homes (new and existing) available for sale. That level of inventory equates to a 5-6 months’ supply – generally considered a balanced market condition.

Balanced Gains Ahead
As the housing market recovers, potential home buyers (both first-timers and repeat purchasers) will gain more confidence in the housing sector. This, in turn, will drive more demand for homeownership, helping to keep inventory at or slightly below market balance and spur additional increases in home price appreciation. In sum, a closing of the subprime market does not directly mean equally lower home sales. FHA/VA and conforming government-backed loans will pick up a large chunk of the former subprime market. The jumbo loan concerns will be mitigated over time with better market knowledge, and will be assisted by changes in legislation permitting higher loan limits. Pent-up demand is strong. Inventory will move in the right direction. Builders are assisting by holding back production. A market recovery in 2008. Back-to-the-historical norm in 2009.

Good News/Bad News -Less Buyers/Better Buys

2007-10-10T09:26:00.000-07:00

This latest Press Release from MAAR addresses the most recent Market Statistics

Tighter Credit Standards, Typical Fall Slowdown Shrink Buyer Pool

Housing Affordability Improves

Minneapolis, Minnesota (October 10, 2007) – Tighter credit standards are a factor in the recent decline in home sales in September, according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc. Buyer activity fell in an environment of abundant choice, improved interest rates and motivated sellers. Newly signed purchase agreements (pending sales) in September fell relative to the same month last year by 24.4 percent, posting 2,839 unit sales. Similarly, closed sales are down 22.6 percent for the same time comparison.

“The consumer’s interest in real estate is always strong, as evidenced by the popularity of real estate shows on television,” said Deb Greene, president of MAAR. “We see motivated buyers and sellers in our market, but at the same time we’re now experiencing a return to more traditional, stricter lending practices that were in effect before the boom.” Greene also stated that lenders are placing more scrutiny on appraisals, income, employment history, and other factors, which is resulting in reduced home purchasing power for some buyers.

Builders and sellers continued to pull back in response to the market. New listings in September were down 9.4 percent from September 2006, the eighth consecutive month of year-over-year declines in listings. Year-to-date, there has been 3.2 percent fewer homes placed on the market than this time in 2006. This is good news for thinning out inventory and returning to a more balanced market.

The median sales price in September was $225,000, down 2.1 percent from last year. The Percent of Original List Price Received at Sale also declined slightly to 94.2 percent. Nationally, home prices have increased for the first time in 13 months, according to the National Association of REALTORS®. “In this buyer’s market, sellers should listen to buyer feedback and the honest and frank pricing advice of a professional REALTOR®,” said Greene.

Interest rates are near 45-year lows and declined further in September, and the MAAR Housing Affordability Index improved to 131 in October—both encouraging signs. Improvements in affordability will help lay a healthier foundation for the eventual market turnaround.

Kevin Knudsen, president-elect of MAAR said, “We need to remember that there are still positive changes taking place. Affordability is improving, the lending environment is returning to solid fundamentals, interest rates are still historically low, and buyers now have a golden opportunity to purchase a home. A time of ‘crisis’ often turns out to have been a time of opportunity in hindsight.”

Weekly Twin Cities Real Estate Market Activity Report

2007-10-09T18:54:00.000-07:00

Here's the latest from MAAR:

With consumer confidence in residential real estate in the doldrums, the Twin Cities housing market is seeing a new downward surge in home sales in recent weeks. For the week ending September 29, new purchase agreements (pending sales) fell from the same week last year by 33.1 percent. This is on the heels of a 26.3 percent drop last week vs. the same week in 2006.

The downward velocity in buyer activity appeared to have bottomed out in the first half of 2007, but August and September have shown further decreases as uncertainties in the mortgage industry have intensified. Keeping a close eye on real estate activity in the weeks ahead will give us an indication of where this road will lead. Thankfully, the decline in seller activity has also accelerated, with new listings down by 15.7 percent for the same time period.

This week's edition of the MAAR Weekly Market Activity Report features updated figures for our Housing Affordability Index (HAI) and the Percent of Original List Price Received at Sale. The HAI increased 4 points to 131 due to a slight drop in interest rates and home prices. Affordability is essential to the future health of our market, so this improvement is greeted with optimism. The Percent of Original List Price Received at Sale dropped slightly to 94.2 percent, and should continue to decline as the annual winter slowdown creates additional short-term downward pressure on home prices.

Want to see how localized submarkets are being affected by the changing market? Take a look at "The 100," our free monthly market update tool for over 100 Twin Cities communities, including the interior neighborhoods of Minneapolis and Saint Paul. It has just been updated with new data through September.

Click here to access "The 100."

Went to a Garden Party...

2007-10-07T13:26:00.000-07:00

Took my darling Lily to her first birthday party last week for her friend Ezra. She and I had a great time on this father daughter outing. When you first have a child you really have no idea of the challenges -and joys- each day will bring. This pic was taken by Allison Kuznia - Thanks Allison!

Pending Real Estate Sales Index at "Lowest Ever"

2007-10-02T13:50:00.000-07:00

I would laugh if didn't actually make me CRY but the news just keeps getting worse and worse for the real estate market.

To wit:

The National Association of Realtors said Tuesday its seasonally adjusted index of pending sales for existing homes fell 6.5 percent from July and 21.5 percent from a year ago.

August's reading of 85.5 was below analysts' expectations and the lowest ever for the index, which started in January 2001. Analysts surveyed by Briefing.com had predicted the index would fall by 2 percent from July.

Wow. This is approaching historic (and hysteric!) proportions! Since the "Index" only dates back to the already booming year of 2001 it really is not THAT big of a deal. Still, all indications are that we are in a market that is in a state of Free Fall and there really is no end in sight. It will be interesting to see where we are once the dust settles, say in 2 or 3 years!

In the meantime, there are incredible deals for Buyers out there. And if you're a Seller priced RIGHT you will do quite well. Everyone else? As Bette Davis said in "all About Eve": "Fasten your seatbelts, it's going to be a bumpy night!"

Weekly Twin Cities Real Estate Market Activity Report

2007-10-01T18:13:00.000-07:00

While sellers continue to list fewer homes, buyers remain firmly in control in the Twin Cities housing market. New listings on the market for the week ending September 16 were behind the same time last year by 11.4 percent, while newly signed purchase agreements (pending sales) fell by 26.3 percent for the same time period. With slow sales comes decreased inventory absorption; the number of homes for sale is 9.9 percent higher than at this time in 2006.

This week's edition of the MAAR Weekly Market Activity Report features updated October 2007 figures for our Supply-Demand Ratio (SDR) and Mortgage Rates. The SDR increased slightly to 10.47, which means there are currently 10.47 homes on the market for every buyer—a new October record. Following the key interest rate cut from the U.S. Federal Reserve, rates dropped slightly from last month to 6.7 percent. With home prices declining moderately, further rate declines would improve affordability.

Click the logo below or click here for this week's full report, and visit MAAR's Market Stats and Research page for more real estate market information.

Chilly Minneapolis is Hot With Young Professionals!

2007-09-27T09:41:00.000-07:00

MNSpeak Rejected This So I Will Post it Here!

Chilly Minneapolis is Hot
With Young Professionals

It's always funny to see how outsiders view your fair city. This article from the Real Estate Journal is about how Minneapolis has become a HOT SPOT for 20 something professionals. The article states that "more than 11,000 adults age 20-29 moved to the Twin Cities (Minneapolis-St. Paul) from out of the state in 2005, almost double from 6,000 in 2004 according to the U.S. Census Bureau's 2005 American Community Survey. Last year's growth was slightly less frantic: 7,489 new residents moved to the Twin Cities from out of state..."

Why are the kids moving here? Apparently the fact that we talk funny, close up shop early and are pretty much a boring town are the driving forces! To wit:

"It's such a get-out-there and do something culture," says Ms. Appleton. She says that while Minneapolis isn't a "go out every night" atmosphere, she has taken advantage of cuisine, art and volunteer opportunities.

Yes. Come for the Frozen Tundra, stay for the Salvation Army!

After a year in Minneapolis, Mr. Klein says the city is still feels it's like six blocks plucked out of Chicago, but that he has adapted to the smaller circles of society. "It's not overwhelming and I like that," he says.

Reminds of the Wee Britain gag on "Arrested Development."

"(These people) are part of a recent influx of young adults in this chilly city more known for the Mall of America and funny accents than its trendy arts scene and nightlife.

Well, we like it here! Yeah sure. You bet'cha! Also, the article discusses the torture that newcomers must endure:

Newcomers also must confront the social hurdles of being a "transplant" -- a term widely used in Minnesota to describe outsiders. Adrienne LaPointe, a 29-year-old originally from Michigan, says she was warned that many Minnesotans spend their entire lives in the state, gleaning their social circles from as early as middle and high school.

"There are two separate social societies here: people who grew up in Minnesota and everybody else," she says. Undeterred, Ms. LaPointe joined more than 500 people who are part of a social-networking group started in the 1990s for non-natives called I'm Not From Here.

I was thinking of starting a support group called: You Ain't From Around These Parts, Are You?

Weekly Twin Cities Real Estate Market Activity Report

2007-09-24T14:53:00.000-07:00

Here's this week's MAAR report:

This week's edition of the MAAR Weekly Market Activity Report features an exciting new format. We are now providing a much more readable set of graphs for new listings, pending sales and active listing inventory designed to make it easier to note important trends in the market. Additionally, our Days on Market measurement has been switched to utilize the more accurate cumulative days on market measurement, which takes into account previous listing contracts over the past twelve months. The Days on Market Until Sale for August 2007 was 135, up 25.0 percent from August of 2006.

And don't forget, our new and improved Housing Supply Outlook is now found separate from the Weekly Market Activity Report. The new format is chock-full of powerful information that tells the important stories found where price range, property type and construction status meet to create dynamic and unique submarkets. Click here for the September 2007 Housing Supply Outlook.

Housing Supply Outlook

2007-09-19T22:08:00.001-07:00

MAAR Creates Awesome Charts!

The market may be kicking our collective behinds but MAAR continues to kick out awesome research tools.

Here is there most recent - the Housing Supply Outlook.

The stats show some interesting developments including:

Builders have dramatically decreased production in response to changing
market conditions. Total new construction inventory has fallen by 15.3 percent
when compared to this time last year.

The average price per square foot of all new construction units is down 7.9
percent, confirming that builders are reducing prices to sell their excess
inventory.

Condominuims have the highest months' supply of any property type. This
growing imbalance is almost entirely due to a large dropoff in sales of new
construction condominiums, down 37.4 percent from this time last year.
Single-family detached homes are holding their value better than other property
types. Their current supply in months is the lowest, their sales rate has declined
the least, and their average sales price is down only 0.7 percent from this time
last year.

Massive inventory growth is taking place in the lowest price ranges, possibly due
to the role of subprime foreclosures.

Champagne & Cookies!

2007-09-18T12:46:00.000-07:00

From CNN/Money:

Fed Cuts Rates in Effort to Boost Slumping Housing Market

The Federal Reserve's aggressive half-point cut Tuesday could provide support for a slumping housing market.

A quarter-point drop had already been priced into the market for Treasury bills and other instruments tied to mortgage rates, according to Richard DeKaser, chief economist for National City Corp. The deeper cut means mortgage rates may have a little more room to fall, giving support to prices.

The Fed Funds rate affects a range of consumer loans, including home equity and mortgages. Lower mortgage rates would add to the number of home buyers able to afford to make purchases, increasing demand for properties and buoying home prices. Buyers generally care less about the actual purchase price than they do about the size of their payments. If rates drop, so will monthly debt obligations.

Interest rates for conforming loans - those of no more than $417,000 - are already reasonably low, averaging 6.31 percent for a 30-year fixed rate loan.

But an important class of loans that might benefit from the big cut: the high-ticket home mortgages known as non-conforming or jumbo loans. These loans have no guaranteed secondary market because they exceed the $417,000 cap and Freddie Mac and Fannie Mae will not buy them.

With investors wary about any loan perceived as carrying the least bit of risk, jumbo rates have risen in recent months. They carry rates about a full point higher than conforming loans. Jumbos are especially important in high-priced housing markets such as New York, California, Washington D.C. and Boston.

Jumbo rates may come down if the cut makes consumers more confident, according to Mark Zandi, chief economist for Moody's Economy.com.

Weekly Twin Cities Real Estate Market Activity Report

2007-09-17T21:39:00.001-07:00

Here's the latest from MAAR:

Twin Cities consumers didn't do much laboring to purchase a home over Labor Day weekend, as sales activity for the week ending September 8 was down significantly. There were only 500 new purchase agreements signed in the metropolitan area during the week, the lowest number since the beginning of 2007. New listings increased slightly from the previous week, likely buoyed by post-holiday relistings.

This edition of the MAAR Weekly Market Activity Report (WMAR) features a new Months Supply of Inventory figure of 9.9 months, which means it will take 9.9 months for the inventory for sale at the beginning of September to sell through completely. This measurement takes the place of our Housing Supply Outlook, which has been expanded, enhanced and given its own spotlight separate from the WMAR. We are now able to provide detailed measurements of supply and demand by property type, construction status and price range, as well as where these important variables intersect.

Click here to view the September 2007 edition of our new and improved Housing Supply Outlook.

Click the chart or click here for this week's full report.