RISMEDIA, Oct. 28, 2008-The Emergency Economic Stabilization Act of 2008, also known as ‘the bailout bill’ that has been dominating headlines in recent weeks, has real estate leaders talking about its impact on the industry, real estate markets around the country and the overall effect on consumer confidence when it comes to buying and selling.
RISMedia recently interviewed several industry experts on the subject and is presenting their comments in a regularly occurring series called, “The Bailout-Looking Ahead.” Here, Michael Levitin, 2008 Chairman of the Houston Association of Realtors in Houston, Texas offers his thoughts about the bailout, what it means to consumers and the government’s new role in real estate.
RISMedia: What is your overall reaction to the bailout?
ML: The jury is still out on if this bailout will work. It’s nice to see the government involved to try and bolster a little consumer confidence and encourage people. However, I’m definitely taking a wait-and-see attitude.
Politics aside, this is a huge issue. We need bipartisanship-let’s talk about our problems. We can all learn from people with opposite views.
RISMedia: What will it take to get consumers back to buying and selling?
ML: People are going to have to feel that the country has optimism and a solution. The last eight years have been rough. To get consumers back to real estate, change has to happen and there has to be a plan for that.
RISMedia: What is happening in your market locally and how is the national discussion about real estate affecting that? What should the industry be doing to bolster consumer confidence?
ML: Here in Houston, for example, the average sales price is actually up. However, sales are down 15-17 percent-and we have a good job economy. But the problem is that everyone keeps talking about real estate being local. We always say that. But, there’s no way that Houstonians aren’t listening to what’s going on nationally. It’s still a problem and it’s still affecting us.
HAR does a wonderful job of getting people-including me-out in the media. We, as a group, try to tout Houston and all the great things about the local market. We’ve gotten that message across. However, it’s just not working anymore. This is national and people recognize that. When the stock market is tanking and there’s word of a bailout, it’s not local anymore.
RISMedia: What are your thoughts on the government’s new rights (within the bailout bill) to purchase foreclosed homes and refinance them at their current value so that homeowners can stay in the home?
ML: A few months ago I would have said let the banks solve it themselves. The problem now is so deep that someone’s going to have to step in and get the situation organized to a better extent than the way it is right now.
At some point in time, banks need to decide: do they need to keep people in homes at a lesser rate or go into foreclosure. There are some situations where banks should work with homeowners.
Everything starts with buying and selling a home. Having people lose their homes who shouldn’t, someone needs to get involved-that might just be government.
Wednesday, October 29, 2008
Friday, October 24, 2008
Feature Home of the Week
Fabulous family home built by Nedegaard in Plymouth. Plymouth was ranked Number 1 on CNN Money Best Places to Live 2008. 2.5 acres on private cul-de-sac. 3 seasons room, amusement room, billiards room, etc. New roof, gutters, and water softners.
This home will be open this Saturday October 25th from 12:00pm-2:30pm and on Sunday October 26th from 12:00pm to 2:00pm.
Click here for more photos and information about this listing.
Existing home sales see largest gain in years
A great article from MSNBC.com today:
Existing-home sales jump 5.5%
September number possible glimmer of hope housing bottoming out
msnbc.com staff and news service reports
updated 10:43 a.m. CT, Fri., Oct. 24, 2008
WASHINGTON - Sales of existing homes rose sharply in September, offering a glimmer of hope for the troubled housing market, but analysts cautioned that many of the sales were driven by foreclosures that are still pushing prices lower.
The National Association of Realtors said Friday that sales of existing homes rose by 5.5 percent in September compared to August, the best showing since a 5.6 percent increase in July 2003, during the five-year housing boom. It was the first year-over-year sales increase in since November 2005.
But home prices are still falling. The median sales price has dropped to $191,600, down by 9 percent from a year ago.
Lawrence Yun, chief economist for the Realtors, said a sales turnaround first seen in California was beginning to broaden to other regions of the country including Colorado, Kansas, Minnesota, Missouri and Rhode Island.
He said housing may be starting to find a bottom but the turnaround could be aborted by the near-certainty that the country has fallen into a recession.
Michelle Meyer, an analyst with Barclays Capital, said figures from the Realtors show that 35 to 40 percent of national home sales are “foreclosure-linked.”
"While it is encouraging that foreclosures are clearing the market, it results in even lower home prices," she said in a note.
Patrick Newport, an economist with IHS Global Insight, agreed and said the sales bump is not sustainable.
"Distressed sales will remain a factor over the next few months," he said. "However, a tight labor market, tight credit and wide mortgage spreads should dampen demand enough to depress sales going forward."
Inventories of unsold existing homes dropped by 1.6 percent in September to 4.27 million units which would be a 9.9 months supply at the September sales pace, still a historically high level.
Yun, of the Realtors, urged Congress to pass a second stimulus package including measures that would bolster the housing market.
In a further effort to bolster the housing market and deal with record high levels of mortgage defaults, Shelia Bair, the head of the Federal Deposit Insurance Corp., is pushing Treasury to include in the $700 billion rescue package for the financial system a new program to prevent more mortgage foreclosures.
Under Bair's proposal, the government would provide guarantees for mortgages that have been reworked by banks to lower the payment schedules to more affordable levels.
The rise in September sales pushed activity to a seasonally adjusted annual rate of 5.18 million units last month. Sales were up 9.6 percent on a year-over-year basis before adjusting for seasonal changes.
By region of the country, sales soared by 16.8 percent in the West and rose a more moderate 4.4 percent in the Midwest and 2.2 percent in the South. The only region of the country which saw a decline was the Northeast, where sales fell by 1.1 percent.
Housing has been suffering through its worst downturn in decades following a five-year boom that ended in 2006. Since that time sales and prices have plummeted.
Builders have responded to the huge glut of unsold homes by sharply cutting back on construction as their confidence levels have fallen to record lows. The National Association of Home Builders is projecting that construction of new homes and apartments will total just 936,000 units for this year, which would be the weakest performance since 1945.
Existing-home sales jump 5.5%
September number possible glimmer of hope housing bottoming out
msnbc.com staff and news service reports
updated 10:43 a.m. CT, Fri., Oct. 24, 2008
WASHINGTON - Sales of existing homes rose sharply in September, offering a glimmer of hope for the troubled housing market, but analysts cautioned that many of the sales were driven by foreclosures that are still pushing prices lower.
The National Association of Realtors said Friday that sales of existing homes rose by 5.5 percent in September compared to August, the best showing since a 5.6 percent increase in July 2003, during the five-year housing boom. It was the first year-over-year sales increase in since November 2005.
But home prices are still falling. The median sales price has dropped to $191,600, down by 9 percent from a year ago.
Lawrence Yun, chief economist for the Realtors, said a sales turnaround first seen in California was beginning to broaden to other regions of the country including Colorado, Kansas, Minnesota, Missouri and Rhode Island.
He said housing may be starting to find a bottom but the turnaround could be aborted by the near-certainty that the country has fallen into a recession.
Michelle Meyer, an analyst with Barclays Capital, said figures from the Realtors show that 35 to 40 percent of national home sales are “foreclosure-linked.”
"While it is encouraging that foreclosures are clearing the market, it results in even lower home prices," she said in a note.
Patrick Newport, an economist with IHS Global Insight, agreed and said the sales bump is not sustainable.
"Distressed sales will remain a factor over the next few months," he said. "However, a tight labor market, tight credit and wide mortgage spreads should dampen demand enough to depress sales going forward."
Inventories of unsold existing homes dropped by 1.6 percent in September to 4.27 million units which would be a 9.9 months supply at the September sales pace, still a historically high level.
Yun, of the Realtors, urged Congress to pass a second stimulus package including measures that would bolster the housing market.
In a further effort to bolster the housing market and deal with record high levels of mortgage defaults, Shelia Bair, the head of the Federal Deposit Insurance Corp., is pushing Treasury to include in the $700 billion rescue package for the financial system a new program to prevent more mortgage foreclosures.
Under Bair's proposal, the government would provide guarantees for mortgages that have been reworked by banks to lower the payment schedules to more affordable levels.
The rise in September sales pushed activity to a seasonally adjusted annual rate of 5.18 million units last month. Sales were up 9.6 percent on a year-over-year basis before adjusting for seasonal changes.
By region of the country, sales soared by 16.8 percent in the West and rose a more moderate 4.4 percent in the Midwest and 2.2 percent in the South. The only region of the country which saw a decline was the Northeast, where sales fell by 1.1 percent.
Housing has been suffering through its worst downturn in decades following a five-year boom that ended in 2006. Since that time sales and prices have plummeted.
Builders have responded to the huge glut of unsold homes by sharply cutting back on construction as their confidence levels have fallen to record lows. The National Association of Home Builders is projecting that construction of new homes and apartments will total just 936,000 units for this year, which would be the weakest performance since 1945.
Wednesday, October 15, 2008
An Important Message from Todd Johnson, Edina Realty Mortgage President and CEO
To Our Customers,
The dramatic events taking place in the financial services industry and economy are historic in scope and proportion. You may be asking yourself, "What does this mean for me as a home buyer or home seller? When I want to obtain a mortgage, will there be funds available?”
The answer is simple: at Edina Realty Mortgage, it’s business as usual. Yes, we continue to originate mortgages for home purchases and refinances. Our wide product range features FHA, VA, MHFA, Conventional, Jumbo, Relocation, Renovation, and Reverse Mortgages. We are committed to helping as many customers as possible enjoy the personal and financial benefits of homeownership. We provide competitive, fully disclosed, and responsible and fair pricing for all borrowers.
A Solid, Stable and Secure Lender
We want to assure you that we remain a solid, stable, and secure mortgage lender. We are a well-capitalized company, and we hold fast to our long-standing responsible lending principles.
Edina Realty was one of the first real estate companies to offer integrated mortgage services more than twenty-five years ago. For over ten years, Edina Realty Mortgage has been a joint venture between Wells Fargo Home Mortgage (a division of Wells Fargo Bank, N.A.) and HomeServices of America, a Berkshire Hathaway Affiliate.
Wells Fargo Bank, N.A., is the only bank in the United States, and one of only two banks worldwide, to have the highest credit rating from both Moody’s Investors Services “AAA,” and Standard & Poor’s Rating Services, “AAA.”
We Are Committed to Your Successful Closing
We stand by our word. Our exclusive On-time Closing Guarantee1 ensures that you will close on time AND for the amount quoted on the Good Faith Estimate, or you will get money back. Are you already working with another lender? We will be happy to review your Good Faith Estimate and Truth-in-Lending Disclosure Statement. This no-obligation second opinion from us takes just few minutes, and we may be able to provide reductions in interest and/or closing costs.
As a responsible lending leader, we work closely with our customers to help you reach your personal and financial goals through homeownership. Our team works hard to know you, understand your needs, and listen to you. We put you at the center of everything we do. Thank you for trusting us with your business.
Todd Johnson
President and CEO
October 2008
The dramatic events taking place in the financial services industry and economy are historic in scope and proportion. You may be asking yourself, "What does this mean for me as a home buyer or home seller? When I want to obtain a mortgage, will there be funds available?”
The answer is simple: at Edina Realty Mortgage, it’s business as usual. Yes, we continue to originate mortgages for home purchases and refinances. Our wide product range features FHA, VA, MHFA, Conventional, Jumbo, Relocation, Renovation, and Reverse Mortgages. We are committed to helping as many customers as possible enjoy the personal and financial benefits of homeownership. We provide competitive, fully disclosed, and responsible and fair pricing for all borrowers.
A Solid, Stable and Secure Lender
We want to assure you that we remain a solid, stable, and secure mortgage lender. We are a well-capitalized company, and we hold fast to our long-standing responsible lending principles.
Edina Realty was one of the first real estate companies to offer integrated mortgage services more than twenty-five years ago. For over ten years, Edina Realty Mortgage has been a joint venture between Wells Fargo Home Mortgage (a division of Wells Fargo Bank, N.A.) and HomeServices of America, a Berkshire Hathaway Affiliate.
Wells Fargo Bank, N.A., is the only bank in the United States, and one of only two banks worldwide, to have the highest credit rating from both Moody’s Investors Services “AAA,” and Standard & Poor’s Rating Services, “AAA.”
We Are Committed to Your Successful Closing
We stand by our word. Our exclusive On-time Closing Guarantee1 ensures that you will close on time AND for the amount quoted on the Good Faith Estimate, or you will get money back. Are you already working with another lender? We will be happy to review your Good Faith Estimate and Truth-in-Lending Disclosure Statement. This no-obligation second opinion from us takes just few minutes, and we may be able to provide reductions in interest and/or closing costs.
As a responsible lending leader, we work closely with our customers to help you reach your personal and financial goals through homeownership. Our team works hard to know you, understand your needs, and listen to you. We put you at the center of everything we do. Thank you for trusting us with your business.
Todd Johnson
President and CEO
October 2008
Monday, October 13, 2008
Feature Home of the Week
Fabulous Brick contemporary colonial with four bedrooms and four bathrooms in Orono. Two story home with eleven foot ceilings and maple hardwood floors. Gourmet kitchen with granite and cherry wood. Located on a private 2+ acre lot with views of Lake Minnetonka. Orono School District.Link to more pictures, disclosures, floors plans, and inspection report
Foreclosures might have peaked in Minneapolis
By STEVE BRANDT, Star Tribune
October 3, 2008
The foreclosure boom appears to have peaked in first-hit and worst-hit Minneapolis -- even while it continues unabated in the rest of Hennepin County.
St. Paul also reports new sheriff's sales dropping in recent months.
New foreclosures in Minneapolis dropped 10 percent from a year ago during August. That's the second month of the last four in which foreclosures have been down from a year earlier.
"It's done in north Minneapolis," said one neighborhood leader, Roberta Englund, who has been in the center of the fight against mortgage fraud there. "I'm not saying there won't be any, but the north Minneapolis neighborhoods are substantially foreclosed. I don't think that we will see an uptick."
St. Paul reports a 16 percent drop in August, and a scant drop in September.
"We're not sure if that's a trend, but we're hoping it is," said Natalie Fedie, a spokeswoman for the city.
The reason for the drop, experts say, could be simply that the supply of houses headed toward foreclosure is drying up. But they also point out that the problems stemming from the foreclosures are not going away any time soon.
For the first eight months of 2008, sheriff's foreclosure sales for Minneapolis are up 15 percent from 2007. But for the most recent four-month period, they're up only 3 percent, compared with an increase of 72 percent in the rest of the county. St. Paul's foreclosures are up 11 percent for the year to date.
Those who deal with foreclosures daily say that the foreclosure epidemic seems to be stalling in Minneapolis in part because it got started there earlier.
Foreclosure prevention counselors say that poorer neighborhoods that were redlined out of conventional credit for years were the first targets of subprime lenders who sometimes offered loans with predatory features that made foreclosures more likely.
Moreover, after the foreclosure of thousands of Minneapolis homes, especially on the North Side, the supply is dwindling, some foreclosure specialists say.
"You look at some of these streets in north Minneapolis and 75 percent of the houses have been foreclosed, and there's only so many houses you can foreclose on," said Brandon Nessen, executive director of Minnesota ACORN, an organization that counsels people facing foreclosure.
Some housing specialists warn that although the number of foreclosures has plateaued in Minneapolis, the impact has not. That's because people who have been foreclosed on have up to six months to vacate their house after the sheriff's sale. So more houses are continuing to go vacant and become subject to vandalism even if foreclosures are leveling, according to Cheryl Peterson, foreclosure prevention manager for Twin Cities Habitat for Humanity.
The glut of vacant houses is overwhelming the government and nonprofit response because ordinary buyers are finding it hard to get mortgages during the Wall Street panic over soured subprime portfolios.
In Minneapolis, more than 7,500 properties have been auctioned by the Hennepin County Sheriff's Office since the beginning of 2006. In some cases, owners used the statutory six-month redemption period after the sale to refinance or sell the properties to stave off losing them. But most houses went to the hands of banks and sat empty, sometimes creating neighborhood eyesores or losing copper piping and other features to theft.
Minneapolis has used $11 million in state money and another $5.6 million just obtained through federal legislation to finance the purchase, rehab and resale of homes, mostly through the Greater Metropolitan Housing Corp.
GMHC has bought 78 homes, rehabbed 38 and resold 19, while the city's new Minneapolis Advantage program has helped another 45 people buy foreclosed homes. But those are a drop in the bucket compared with the more than 900 properties on the city's boarded and vacant properties list.
The credit crunch is forcing people to turn to a traditional tool for home finance that offers fewer protections for homeowners, the contract for deed. Although GMHC has made some use of this tool to bypass dried-up mortgage availability, some like Englund are concerned about property investors who are picking up devalued homes and selling them on contracts, often unrecorded despite a state law requiring that. Homeowners who miss contract payments lose their homes much quicker than those with mortgages.
October 3, 2008
The foreclosure boom appears to have peaked in first-hit and worst-hit Minneapolis -- even while it continues unabated in the rest of Hennepin County.
St. Paul also reports new sheriff's sales dropping in recent months.
New foreclosures in Minneapolis dropped 10 percent from a year ago during August. That's the second month of the last four in which foreclosures have been down from a year earlier.
"It's done in north Minneapolis," said one neighborhood leader, Roberta Englund, who has been in the center of the fight against mortgage fraud there. "I'm not saying there won't be any, but the north Minneapolis neighborhoods are substantially foreclosed. I don't think that we will see an uptick."
St. Paul reports a 16 percent drop in August, and a scant drop in September.
"We're not sure if that's a trend, but we're hoping it is," said Natalie Fedie, a spokeswoman for the city.
The reason for the drop, experts say, could be simply that the supply of houses headed toward foreclosure is drying up. But they also point out that the problems stemming from the foreclosures are not going away any time soon.
For the first eight months of 2008, sheriff's foreclosure sales for Minneapolis are up 15 percent from 2007. But for the most recent four-month period, they're up only 3 percent, compared with an increase of 72 percent in the rest of the county. St. Paul's foreclosures are up 11 percent for the year to date.
Those who deal with foreclosures daily say that the foreclosure epidemic seems to be stalling in Minneapolis in part because it got started there earlier.
Foreclosure prevention counselors say that poorer neighborhoods that were redlined out of conventional credit for years were the first targets of subprime lenders who sometimes offered loans with predatory features that made foreclosures more likely.
Moreover, after the foreclosure of thousands of Minneapolis homes, especially on the North Side, the supply is dwindling, some foreclosure specialists say.
"You look at some of these streets in north Minneapolis and 75 percent of the houses have been foreclosed, and there's only so many houses you can foreclose on," said Brandon Nessen, executive director of Minnesota ACORN, an organization that counsels people facing foreclosure.
Some housing specialists warn that although the number of foreclosures has plateaued in Minneapolis, the impact has not. That's because people who have been foreclosed on have up to six months to vacate their house after the sheriff's sale. So more houses are continuing to go vacant and become subject to vandalism even if foreclosures are leveling, according to Cheryl Peterson, foreclosure prevention manager for Twin Cities Habitat for Humanity.
The glut of vacant houses is overwhelming the government and nonprofit response because ordinary buyers are finding it hard to get mortgages during the Wall Street panic over soured subprime portfolios.
In Minneapolis, more than 7,500 properties have been auctioned by the Hennepin County Sheriff's Office since the beginning of 2006. In some cases, owners used the statutory six-month redemption period after the sale to refinance or sell the properties to stave off losing them. But most houses went to the hands of banks and sat empty, sometimes creating neighborhood eyesores or losing copper piping and other features to theft.
Minneapolis has used $11 million in state money and another $5.6 million just obtained through federal legislation to finance the purchase, rehab and resale of homes, mostly through the Greater Metropolitan Housing Corp.
GMHC has bought 78 homes, rehabbed 38 and resold 19, while the city's new Minneapolis Advantage program has helped another 45 people buy foreclosed homes. But those are a drop in the bucket compared with the more than 900 properties on the city's boarded and vacant properties list.
The credit crunch is forcing people to turn to a traditional tool for home finance that offers fewer protections for homeowners, the contract for deed. Although GMHC has made some use of this tool to bypass dried-up mortgage availability, some like Englund are concerned about property investors who are picking up devalued homes and selling them on contracts, often unrecorded despite a state law requiring that. Homeowners who miss contract payments lose their homes much quicker than those with mortgages.
Big Discounts Push Increase in September Home Sales
By JIM BUCHTA, Star Tribune
October 10, 2008
With the stock market skidding and the credit markets in disarray, Marissa McDonald and Travis Gehling are paying close attention to what's happening in the economy. None of that, however, will deter them from buying a house, McDonald said, as they drove to an inspection on a house they plan to buy in Cottage Grove.
The first-timers said that sellers were offering serious discounts on just about all of the 20 or so houses they looked at during the past couple of months, and they're hoping to get a 7.5 percent discount on the one they plan to buy.
Such discounts and a flood of clearance-priced foreclosures helped drive a 42 percent increase in pending home sales last month compared with a year ago, the third consecutive month of year-over-year increases, according to data released Friday by Twin Cities-area Realtors associations. Whether that translates into a long-term recovery against a backdrop of economic uncertainty remains to be seen.
Among sales that closed in September, the median sale price declined 15.6 percent, to $189,000.
Much of that decline was caused by a steady increase in foreclosures and "short sales" -- sales where lenders agree to a sale for less than what is owed on the mortgage -- that are moving through the market. Almost 42 percent of September pending sales were these lender-mediated transactions, up from 17.5 percent last year at this time, according to the Minneapolis Area Association of Realtors.
The distressed sales are putting tremendous downward pressure on sale prices across the board. The median sale price of lender-mediated transactions only was $146,000, 11.5 percent decline over 2007, and even the sale price of traditional homes fell 8.6 percent.
Such declines are an indication that sellers are offering steep discounts. During September, sellers on average received 92.2 percent of their asking price; just two years ago they got 96 percent.
The September spike in pending sales will help the market regain some ground after a very slow start to the year. So far this year, pending sales are now running neck-and-neck with last year.
Although a 42 percent increase sounds impressive, the 4,036 pending sales last month were less than the five-year September average of 4,138. The increase was due in part to a particularly slow September 2007, which was the slowest September in a decade.
Dogged by record numbers of distressed sales, the market is also getting a boost from a slowdown in listing activity. Last month the number of new listings to hit the market was 4.2 percent behind last year at this time and 13.2 percent below 2006. That's a trend that's been underway for most of the last half of this year; so far this year new listings are off 11.2 percent compared with last year.
While sellers are certainly cursing the market and the flood of bargain-priced foreclosures they're competing with, the fundamentals for buyers like Gehling and McDonald who have good credit and cash for a down payment remain strong. Mortgage interest rates have remained relatively stable and near 30-year lows, there are nearly 10 houses on the market for every buyer and the government is offering a $7,500 tax credit for first-time buyers. And that's why the housing affordability index rose to 159, its highest level since the spring of 2003.
With consumer confidence waning but discounts on the rise, the market is becoming increasingly nuanced as segments of the market improve while others decline. In Minneapolis, for example, there was nearly a 40 percent increase in the number of closed sales last month, but nearly a 24 percent decline in the median sale price.
Data were even more extreme in St. Paul, where the number of sales in September rose nearly 44 percent from 202 during 2007 to 290 last month with the median sale price falling 28 percent. The same was true in several suburbs, where there were fewer sales, but many striking examples of huge increases. The number of sales in Richfield, for one, doubled from 26 to 52.
October 10, 2008
With the stock market skidding and the credit markets in disarray, Marissa McDonald and Travis Gehling are paying close attention to what's happening in the economy. None of that, however, will deter them from buying a house, McDonald said, as they drove to an inspection on a house they plan to buy in Cottage Grove.
The first-timers said that sellers were offering serious discounts on just about all of the 20 or so houses they looked at during the past couple of months, and they're hoping to get a 7.5 percent discount on the one they plan to buy.
Such discounts and a flood of clearance-priced foreclosures helped drive a 42 percent increase in pending home sales last month compared with a year ago, the third consecutive month of year-over-year increases, according to data released Friday by Twin Cities-area Realtors associations. Whether that translates into a long-term recovery against a backdrop of economic uncertainty remains to be seen.
Among sales that closed in September, the median sale price declined 15.6 percent, to $189,000.
Much of that decline was caused by a steady increase in foreclosures and "short sales" -- sales where lenders agree to a sale for less than what is owed on the mortgage -- that are moving through the market. Almost 42 percent of September pending sales were these lender-mediated transactions, up from 17.5 percent last year at this time, according to the Minneapolis Area Association of Realtors.
The distressed sales are putting tremendous downward pressure on sale prices across the board. The median sale price of lender-mediated transactions only was $146,000, 11.5 percent decline over 2007, and even the sale price of traditional homes fell 8.6 percent.
Such declines are an indication that sellers are offering steep discounts. During September, sellers on average received 92.2 percent of their asking price; just two years ago they got 96 percent.
The September spike in pending sales will help the market regain some ground after a very slow start to the year. So far this year, pending sales are now running neck-and-neck with last year.
Although a 42 percent increase sounds impressive, the 4,036 pending sales last month were less than the five-year September average of 4,138. The increase was due in part to a particularly slow September 2007, which was the slowest September in a decade.
Dogged by record numbers of distressed sales, the market is also getting a boost from a slowdown in listing activity. Last month the number of new listings to hit the market was 4.2 percent behind last year at this time and 13.2 percent below 2006. That's a trend that's been underway for most of the last half of this year; so far this year new listings are off 11.2 percent compared with last year.
While sellers are certainly cursing the market and the flood of bargain-priced foreclosures they're competing with, the fundamentals for buyers like Gehling and McDonald who have good credit and cash for a down payment remain strong. Mortgage interest rates have remained relatively stable and near 30-year lows, there are nearly 10 houses on the market for every buyer and the government is offering a $7,500 tax credit for first-time buyers. And that's why the housing affordability index rose to 159, its highest level since the spring of 2003.
With consumer confidence waning but discounts on the rise, the market is becoming increasingly nuanced as segments of the market improve while others decline. In Minneapolis, for example, there was nearly a 40 percent increase in the number of closed sales last month, but nearly a 24 percent decline in the median sale price.
Data were even more extreme in St. Paul, where the number of sales in September rose nearly 44 percent from 202 during 2007 to 290 last month with the median sale price falling 28 percent. The same was true in several suburbs, where there were fewer sales, but many striking examples of huge increases. The number of sales in Richfield, for one, doubled from 26 to 52.
Friday, October 10, 2008
More on the Hwy 12 Schedule
As of mid-September, MnDOT officials have indicated that construction is on schedule to allow the newly constructed Highway 12 to be open to traffic in mid-November.
Phase 3 construction on the west end where County Road 6 and Highway 12 intersect has included construction of a new bridge, exit and entrance ramps to the new highway, retaining walls, stormwater ponds and relocation of the intersection with County Road 6. At the east end at the intersection of Highway 12 and Wayzata Boulevard, construction of the flyover bridge and retaining walls is progressing nicely.
Once the new Highway 12 opens to traffic, the connection of existing Highway 12 to County Road 6 will be closed and detoured. The proposed detour will be County Road 6 to Willow Drive to Wayzata Blvd. This construction stage will remove the temporary connection of existing Highway 12 to County Road 6, construct the permanent roadway for that connection, construct the median barrier on the new Highway 12, and construct the east pond. Completion of this work is expected in May 2009.
According to Mn DOT's Highway 12 Reconstruction Project website the existing Luce Line Trail Bridge over existing Highway 12 will be removed and replaced with a salvaged bridge from the previous contract. This work may require that existing Highway 12 be closed for periods of time to remove the existing bridge and install the new bridge. This work is dependent upon the Highway 12 bypass being open with all movements at the County Road 6 interchange being available. This stage will begin in April of 2009 and be completed in May of 2009.
Phase 3 construction on the west end where County Road 6 and Highway 12 intersect has included construction of a new bridge, exit and entrance ramps to the new highway, retaining walls, stormwater ponds and relocation of the intersection with County Road 6. At the east end at the intersection of Highway 12 and Wayzata Boulevard, construction of the flyover bridge and retaining walls is progressing nicely.
Once the new Highway 12 opens to traffic, the connection of existing Highway 12 to County Road 6 will be closed and detoured. The proposed detour will be County Road 6 to Willow Drive to Wayzata Blvd. This construction stage will remove the temporary connection of existing Highway 12 to County Road 6, construct the permanent roadway for that connection, construct the median barrier on the new Highway 12, and construct the east pond. Completion of this work is expected in May 2009.
According to Mn DOT's Highway 12 Reconstruction Project website the existing Luce Line Trail Bridge over existing Highway 12 will be removed and replaced with a salvaged bridge from the previous contract. This work may require that existing Highway 12 be closed for periods of time to remove the existing bridge and install the new bridge. This work is dependent upon the Highway 12 bypass being open with all movements at the County Road 6 interchange being available. This stage will begin in April of 2009 and be completed in May of 2009.
Thursday, October 9, 2008
Third Quarter Market Update
Sales activity in the Twin Cities housing market in August showed a 15 percent increase in pended sales year-over-year for the second consecutive month. And the good news is that the number of homes for sale in the 13 county metro area is down 9.2 percent from August of last year. This trend is what we need to have continue to help stabilize home prices.
In September, according to the Minneapolis Area Association of REALTORS®, we saw large increases in activity in the lower price ranges. This is most likely the result of foreclosure and short sale activity as well as widespread discounting. In September, the absorption rate was 9.9 months. This is even with last year and the first time in four years that there hasn’t been a year-over-year increase. Affordability also bodes well for the housing market. With decline in interest rates and price pressures, affordability is 19 percent ahead of last year at this time.
These past few weeks we have experienced an economic hiccup and the total effect on the housing market is still unknown. Financial institution bankruptcy, money market concerns, government bail outs --- we expect all of this to affect our industry. Some anticipate mortgage rates to go down even further and in the short term, we see credit standards holding steady and very likely to continue to tighten.
Click here to see the closed transactions for the past 12 months.
In September, according to the Minneapolis Area Association of REALTORS®, we saw large increases in activity in the lower price ranges. This is most likely the result of foreclosure and short sale activity as well as widespread discounting. In September, the absorption rate was 9.9 months. This is even with last year and the first time in four years that there hasn’t been a year-over-year increase. Affordability also bodes well for the housing market. With decline in interest rates and price pressures, affordability is 19 percent ahead of last year at this time.
These past few weeks we have experienced an economic hiccup and the total effect on the housing market is still unknown. Financial institution bankruptcy, money market concerns, government bail outs --- we expect all of this to affect our industry. Some anticipate mortgage rates to go down even further and in the short term, we see credit standards holding steady and very likely to continue to tighten.
Click here to see the closed transactions for the past 12 months.
Carbon Monoxide Detectors
New carbon monoxide detector law:
To summarize the law, carbon monoxide detectors must be installed within 10 feet of every “sleeping room” in a single-family home as of August 1, 2008. Although the word “installed” makes it sound as if the detector must be hard-wired, that is not the case; it can also be a plug-in unit or a battery operated unit attached to a wall.
Some readers understood the MNAR email to state that sellers are required to install these detectors prior to every sale, and that buyer are entitled to receive them as part of any transaction. Unfortunately, that is misleading. While every owner of property is required to install the appropriate number of units, the units are not necessarily part of the transaction. Think about it this way: if a carbon monoxide detector is hard-wired, it is a fixture that will be sold with the real estate. If it is not hard-wired, it is personal property and comes with the sale only if it is specifically negotiated into the purchase agreement.
So it’s not true that a buyer is entitled to a carbon monoxide unit in every sale. But we expect that there may be some confusion about this in the weeks to come. If you run into a dispute about this in one of your transactions, we encourage you to keep some perspective: it’s probably not worth jeopardizing a deal over an item that costs about $30.
To summarize the law, carbon monoxide detectors must be installed within 10 feet of every “sleeping room” in a single-family home as of August 1, 2008. Although the word “installed” makes it sound as if the detector must be hard-wired, that is not the case; it can also be a plug-in unit or a battery operated unit attached to a wall.
Some readers understood the MNAR email to state that sellers are required to install these detectors prior to every sale, and that buyer are entitled to receive them as part of any transaction. Unfortunately, that is misleading. While every owner of property is required to install the appropriate number of units, the units are not necessarily part of the transaction. Think about it this way: if a carbon monoxide detector is hard-wired, it is a fixture that will be sold with the real estate. If it is not hard-wired, it is personal property and comes with the sale only if it is specifically negotiated into the purchase agreement.
So it’s not true that a buyer is entitled to a carbon monoxide unit in every sale. But we expect that there may be some confusion about this in the weeks to come. If you run into a dispute about this in one of your transactions, we encourage you to keep some perspective: it’s probably not worth jeopardizing a deal over an item that costs about $30.
Friday, October 3, 2008
This Weekend's Interest Rates
Conventional
15 Year Fixed: 5.500-5.625%
30 Year Fixed: 5.750-5.875%
40 Year Fixed: 6.375-6.500%
15 Year Fixed: 5.500-5.625%
30 Year Fixed: 5.750-5.875%
40 Year Fixed: 6.375-6.500%
Bailout Gets Passed
Now that the Bailout was passed it will take a couple of months before we see the difference, but people are still getting loans, they are just stricter on the credit score and having 20% down. Click here for a link an article from RIS media outlining the bill.
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