The Skinny

Cool New Thing Announcement: Play With Your Data

Mama always said never to play with your data. Or was it food? I think it was data.

Well it's officially time to stop listening to mom.

As an add-on to our Q4-2008 Update to our foreclosure and short sales report, we're proud to announce the release of a brand-new interactive data tool that gives you the chance to sort and rank neighborhoods and cities within the Minneapolis/Saint Paul region! You can then dig-in to specific areas even further to understand with a high-level of detail how lender-mediated properties are affecting the market.

Click here to start playing! Here's a look at the monster:

See those blue links at the top that say "Sort?" You can click on any of them to re-sort the area list by a new figure. See which areas have the highest concentration of lender-mediated properties. See which ones saw the biggest increases in median sales price in 2008 for traditional, non-lender-mediated homes.

See those blue links that are area names? You can click on any of them to get a detailed two-page report for that area. See how traditional, non-lender-mediated homes faired in the last year. See if lender-mediated supply is growing or falling in your neighborhood, and by how much.

Here's a look at a page from the Minneapolis—Powderhorn report:

Dig in, play around, and tell us what you think! Do you want to see more of this kind of interactivity?

Tell us in the comments, or by dropping a line to jeffa@mplsrealtor.com.

Q4-2008 Foreclosures and Short Sales Report is Released

As you know, we've been providing analysis on the effect of lender-mediated foreclosures and short sales on the Twin Cities housing market every quarter. The Q4-2008 report was just released and illustrates that there's some reason for cautious optimism. Click here to view.

Foreclosures and short sales are showing early signs of slowing. During the fourth quarter of 2008, there were 4.3 percent fewer new lender-mediated listings than in the third quarter. That's the first quarter-to-quarter decrease since 2003. A cross-reference with the Hennepin County Sheriff's Sales confirms the same trend. Combined with healthy buyer demand (sales of lender-mediated properties are way up over last year), this tapering off of new supply led the overall inventory of lender-mediated homes for sale to decline about 600 units over the course of the fourth quarter.

By no means is the hard part totally over. What the economy does in 2009 is the real wildcard, but the sooner this cycle runs its course, the sooner the housing market can return to some normalcy.

This quarter's report also features some very exciting new interactive data bells-n'-whistles. We're so stoked on the enhancements that we're gonna give you another extra post on that subject. Stay tuned.

Weekly Market Activity Report 1.26.09

Now is the winter of our discontent here in the Twin Cities. With temperatures remaining stubbornly arctic, there is a very real possibility that we'll stay below freezing for the entirety of January. After a steady rise for the first two weeks of 2009, the Twin Cities housing market is reflecting the cold, with new listings down by 18 percent when comparing the week ending January 17 to the same week last year. If new listings continue to taper off, the market's supply balance can handle it, as we are still tilted generously in favor of the buyer.
 
For the same time period comparison, pending sales are up 13.2 percent over last year, and January 2009 has steadily outperformed January 2008. Total active listings trail last year, down by at least 10.5 percent. An ideal situation would be for listings overall to hold steady and for pending sales to keep rising...hopefully bringing temperatures up as well.
 
"And all the clouds that low'r'd upon our house, in the deep bosom of the ocean buried." – WS, R3

Click here for the full Weekly Market Activity Report.

Brooklyn Center Gets Serious

As the final pages of our most recent "Foreclosures and Short Sales in the Twin Cities Housing Market" report demonstrates, the scourge of lender-mediated properties has affected some areas of the metro more than others. Brooklyn Center has unfortunately ranked fairly consistently near the top of the list of areas with high lender-mediated market share.

Quite understandably, the city would rather see these often-vacant properties be utilized and, preferably, by home owners instead of renters. We can debate the relative merits or lack thereof of cities attempting to get rid of rental properties until we're blue in the face, but regardless, the city is now taking a proactive approach to the issue.

Brooklyn Center has taken the rather unprecedented step of putting together a fund of roughly $1,000,000 (you read that right, six zeroes following a one) to encourage prospective homeowners to swoop in and buy vacant homes. The cool million will be distributed to 100 applicants and help them take care of down payments and closing costs. In exchange, the applicants agree to live in the property as their primary residence for five years. If they leave early, they have to pay the money back.

While city-funded home ownership programs are nothing new, and especially not in this day and age, this is probably far and away the most aggressive plan we've seen locally. Minneapolis' Advantage Loan Program offered similar incentives but with a far smaller overall fund.

The Star Tribune serves up an interesting articleon the project, complete with quotes from our VP of Public Affairs, Bill Gerst on the potential risks:

Gerst noted that a possible problem for the city and Minneapolis, which has a similar housing program, is that in many cases the home buyer makes no down payment investment because that is covered by the $10,000 incentive for many of the foreclosed, low-priced homes.

"Zero-down payment mortgages are not in favor now," Gerst said, "because some people who get those mortgages could lose their job or something happens. They can't make the payments and the city gets the house back."

Excellent point, Mr. Gerst. All in all though, this has to be seen as a "positive, proactive" program (to use Bill's words) that represents some excellent opportunities for home buyers interested in living in Brooklyn Center.

The program kicks off March 1st. There doesn't appear to be anything up on the BC website just yet about how to apply, but there hopefully will be soon.

Carrots and sticks, y'all.

January Monthly Skinny Video Is Up!

We're tempted to say that this one is, dare we say it, pretty funny. And informative.

Watch all the way through.

This month's edition is another quickfire update on the Twin Cities housing market, this time narrated by not one, Steve Havig, our 2009 President. A choice nugget:

Those of you waiting for when the bottom finally hits? It will be at exactly 9:03 AM tomorrow and a large bell will ring all throughout the land that officially announces the perfect time to buy.

Click here to view or just watch the embedded video below.

Weekly Market Activity Report 1.20.09

There's much "change" in the air around the world today. And there is also change happening on the streets of the Twin Cities metro area, as the number of new listings appearing in our Weekly Market Activity Report takes its ascendant year-opening uptick. Despite the increase, new listings for the week ending January 10 have not quite matched the numbers seen at this time period last year (down 7.6 percent). Pending sales are riding a healthy clip above where they were last year (up 19.4 percent) as more homeowners pour back into the market after the year-end transition.
 
As a summation of how most of 2008 went, total active listings for the year finished down 10 percent from the year before. Time will tell if the flurry of optimism associated with today's presidential inauguration will work its way into the economy, the housing market and, specifically, the Twin Cities housing arena. Hope meets anxiety at the crossroads of 2009.

Click here for the full Weekly Market Activity Report.

Twin Cities Housing Market Makes Big Changes in 2008

After two-plus years of a faltering market, a recent upswing in Twin Cities homes sales during the second half of 2008 is cause for some measured optimism heading into 2009. In the Twin Cities 13-county metro area, total pending sales for 2008 ended at 44,067, up 1.2 percent from 2007. This is the first year-over-year increase in pending sales since 2004. There were 38,746 closed home sales in 2008, down only 3.5 percent from 2007. 

In the second half of the year, sales picked up momentum and haven't let up since due to tumbling mortgage rates and increased affordability. Since July, there have been 15.7 percent more pending sales than there were during the same time period last year, and the most recent month saw a year-over-year increase of almost 30 percent.

Home prices continued to decline, as expected. The overall 2008 median sales price was $195,000, down 13.3 percent from last year's mark of $225,000.

Reasons for this decline can be found by dissecting two unique segments in today's housing market: lender-mediated and traditional. In 2008, the median sales price of lender-mediated foreclosure and short sale properties was $145,000, a drop of 13.4 percent from 2007. The median sales price for traditional properties was $223,000, which was a much quieter decline of 4.1 percent from last year. In all of 2008, 31.7 percent of closed sales in the region were lender-mediated, up from 10.4 percent in 2007.

The number of new listings on the market during 2008 decreased by 10.9 percent compared to last year, a drop of over 10,000 listings from last year and the lowest showing since 2003. This has helped stem the tide of oversupply our market has been experiencing in recent years.

The number of new foreclosure and short sale listings in the fourth quarter of 2008 was actually 4.3 percent lower than the third quarter, which is the first downward quarterly movement in new lender-mediated listings since 2003.

Video Fun

Steve Havig, our 2009 President, was recently featured on two WCCO-TV stories related to the local real estate market and the availability of mortgage financing for residential real estate (hint: it's actually readily available, contrary to popular opinion).

Sit back with some popcorn and enjoy:

Video 1

 

Video 2

 

January 2009 Housing Supply Outlook

The January 2009 Housing Supply Outlook just hit the streets. As usual, here's a brief explanation of what to watch for:

• Thanks to increased home sales and declining new listings the January Months Supply of Inventory dropped to 7.6,  9.3 percent below the same time last year. The lowest months supply can be found in single-family detached properties, which currently sits at 7.0. The highest can be found in condominiums—a hearty 11.4 months of supply is available in that segment.
• The lower price ranges continue to see a growing share of market activity. Home sales below $150,000 have more than doubled in the last year, jumping 133.1 percent. The lion's share of homes being sold in these price ranges are lender-mediated foreclosures and short sales.
• As a result of this growing phenomenon, prices continue to soften. The Average Price Per Square Foot over the last twelve months is 14.5 percent lower than the twelve months before that. The largest declines can be seen in single-family detached properties.

Click here for the full January Housing Supply Outlook. Booyah.

 

The Hipponary Effect

With mortgage rates in serious decline and flirting with 50-year lows, there has naturally been an upswing in new mortgage and refinancing applications from consumers.

From a recent AP story on the subject:

Applications surged earlier this month to the highest level since July 2003, when refinancing activity boomed at the peak of the housing market.

More than 80 percent of applications came from borrowers looking to refinance at more affordable rates, the trade group said.

While only 20 percent of this recent upswing in applications has been caused by actual home purchases, we've seen a noticable bump in new pending sales since rates first dropped in early December. December's pending sales were up 21 percent over the same time last year, as our soon-to-be-released Monthly Indicators will tell you and our weekly numbers have been telling you.

Whether they're purchases or refinances, one thing is for certain: mortgage bankers are a lot busier this month than they'd anticipated. The always-great Alex Stenback from Behind the Mortgage chimes in with a new catch phrase for this trend:

There are fewer loan officers, loan processors, appraisers, title closers/examiners, underwriters, mortgage closers, than there were the last time we saw rates at these levels.  Documentation requirements are more strict, and every loan is subject to a higher level of scrutiny.  There is much fallout, which consumes already scarce “processing” resources.

This, of course, translates into increased turn times for newly originated applications.  And it will probably get worse.  Every day rates stay at these levels the number of days that elapse between the moment an application is completed and a loan is prepared to close goes up.

Anyway, we need a term for this.  We’re calling it the Hipponary effect, in that the lending industry right now has the mouth of a Hippo, and the digestive system (a$$) of a Canary.

So there you have it.

Alex will be a part of tomorrow's huge Residential Real Estate Summit we're co-hosting with the other three metro realtor associations begin held at the Earle Brown Heritage Center in Brooklyn Park. Don't miss it.

Register here or when you get there in the morning. See you tomorrow.

Weekly Market Activity Report 1.12.08

The New Year rang in with the normal post-holiday increase in new listings, but listings are still down from the same week last year. Pending sales for the week ending January 3 showed a strong increase during the year-end transition, rising nearly 40 percent compared to last year. Over the last three months of the year, pending sales were 18 percent higher than last year. Local housing inventory has reached its annual low point but looks to rebound in the opening months of 2009.
 
This week's edition of the MAAR Weekly Market Activity Report features updated figures from several important metrics:

In December, Days on Market Until Sale dropped 6.3 percent compared to last year. The market appears to have reached a plateau in the amount of time needed to sell a house, and this welcome decline certainly could continue into the next year. 

Percent of Original List Price Received at Sale closed at 90.0 in December, 1.3 percent lower than last year.

The new Housing Affordability Index (HAI) for January is extremely positive. Last month we stated that the HAI of 180 was the highest we had ever recorded. Now it's even higher, jumping an additional 12 points to 192. The rise reflects the help that interest rates and softer prices have given to the market. (Note: The decline in prices is driven by the significant amount of lender-mediated home sales and its benefit is not equal to all buyers.)

Click here for the full Weekly Market Activity Report.

January 14, 2009: Residential Real Estate Summit

Coming up on next Wednesday, January 14th is a huge event for the Twin Cities real estate community: the annual Residential Real Estate Summit, sponsed by the four Twin Cities metro realtor associations (hey, that's us!) and put on by the Real Estate Communications Group.

The event features a keynote address from Tobias Madden of the Federal Reserve Bank of Minneapolis, panels with industry leaders, the official release of the 2008 Twin Cities housing market statistics and affiliated press conference, continuing education credits and much more.

Click here to register and look below for a breakdown of the day's events.

8:00 AM Looking Forward on the Economy
Keynote Speaker: Tobias Madden, Federal Reserve Bank of Minneapolis

• What is the outlook for the world, national and regional economies?
• A detailed look at the residential real estate sector

8:40 AM Capital Markets: Financing and Lending Update
Moderator: Tom Musil, University of St. Thomas
Jeanne Kadrlik, US Department of Veterans Affairs
Anita Olson, US Department of Housing and Urban Development
Alex Stenback, Residential Mortgage Group
Keith White, Marketplace Home Mortgage LLC

• Changes in the lending industry
• The impact of foreclosures on lenders, communities and consumers
• Mortgage rates: where are they headed and why
• What does the future hold for the Twin Cities mortgage market
• What is the impact of the $700 billion bailout on the Real Estate Industry

9:20 AM Break

9:40 AM 2008 Twin Cities Housing Market Statistics
Bob Day, North Metro REALTORS® Association
Christopher Galler, Minnesota Association of REALTORS®
Steve Havig, Minneapolis Area Association of REALTORS®
Rae Jean Malone, St. Paul Area Association of REALTORS®
Tony Maurer, Southern Twin Cities Association of REALTORS®

• The official release of 2008 Year-End Twin Cities Market Statistics to the media
• Hear what 2009 will have in store for the local housing market
• Brief question and answer session for the assembled media

10:05 AM State and Federal Housing Policy Update
Moderator: Christopher Galler, Minnesota Association of REALTORS®
Phillip Creglow, National Association of REALTORS®
Dan Bartholomay, Minnesota Housing Finance Agency

• State housing policy update: what will the impact be at the street-level?
• Federal housing policy update: what will the impact be at the street-level?
• The future of FHA, Fannie and Freddie and what it means

10:45 AM Break

10:55 AM Legal Strategies in a Down Market
Moderator: Peter Coyle, Larkin Hoffman Daly & Lindgren Ltd.
Thomas Alexander, Larkin Hoffman Daly & Lindgren Ltd.
William Griffith, Larkin Hoffman Daly & Lindgren Ltd.
Gary Van Cleve, Larkin Hoffman Daly & Lindgren Ltd.

• Dealing with work outs and troubled projects
• Foreclosure and bank selling - how to work the process
• Are my property taxes too high?
• Will I benefit from the Stimulus Package?

11:20 AM New Construction & Land Update   
Moderator: Tom Gump, Neighborhood Development Partners LLC
Jon Aune, Lennar
Michael DeVoe, The Ryland Group
Michael Noonan, Rottlund Homes
Art Plante, K. Hovnanian Homes

• Where are we today and specifically what does it mean for the future of the housing industry? How did we get into this situation? Are there bright spots within the market?
• How has today’s reality altered the way we conduct business – managing inventory (land, lots and production homes), pricing and incentive strategies, product design, addressing the uncertainty from the credit and mortgage crisis, dealing with prospects.
• What does the future hold? Thoughts about what the industry will look like as we emerge from the present slowdown. Addressing the notion that participants need to return or go back to basics – what defines the basics and do you necessarily agree?

12:00 PM Networking

Weekly Market Activity Report 1.5.08

As expected, all activity in the Twin Cities housing market basically flatlined during the week of the Christmas holiday, as consumers and REALTORS® alike took time away from buying and selling homes. For the week ending December 27, there were 550 new listings and 256 pending sales in the entire 13-county Twin Cities region, down 3.2 percent and up 8.9 percent, respectively, from the same week last year. The inventory of houses for sale declined by almost 2,000 units in the past week but should be boosted upwards again in the weeks ahead.
 
This edition of the MAAR Weekly Market Activity Report features an updated January 2009 figure for our Supply-Demand Ratio, which measures the number of houses for sale for each buyer. The January number is 8.36, which is a decline of 19.7 percent from last January's figure of 10.41. Falling supply and recent surges in demand brought about by plunging mortgage rates have reduced the amount of supply relative to demand in recent months.

Click here to view the full Weekly Market Activity Report.