Pending sales skyrocket over 40 percent as prices decline

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!

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

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.

FOR SALE- ONE OWNER HOBBIT HOME

Tired of the Rat Race? Why not try digging your own hole like this guy did in Wales!


Click here for more!

A Nice Little Streak

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?!?

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!

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%

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

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!

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

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 ?

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!

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

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

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?!?!?

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

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

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

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!"

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!

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?

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!

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

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

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!

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?

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!

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?

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

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

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

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

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

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

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

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?

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!

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

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

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

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

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."

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

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

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?

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

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

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

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

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!!!

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

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

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

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.