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.