The Skinny

Weekly Market Activity Report

For the week ending May 23, there were 1,103 pending sales, which was down slightly from the week prior due to the Memorial Day weekend holiday. Despite the low-cal dip, the mark is still 27.2 percent higher than last year at this time. Of the week's sales, 43.2 percent were lender-mediated foreclosures and short sales. In week-by-week, year-over-year comparisons, sales are expected to be higher than last year for the remainder of the year.
 
Heavy sales and soft growth in new listings equate to no growth in the supply of homes for sale this spring—the time of year that typically shows the largest increases. There are currently 26,453 active listings, lagging 19.6 percent behind this time in 2008.
 
This week's edition of the MAAR Weekly Market Activity Report features a new Supply-Demand Ratio for June 2009 of 5.04, which means that there will be 5.04 houses per buyer during the month. This is an astounding 33.4 percent drop compared to June 2008.

Click here for the full Weekly Market Activity Report.

Weekly Market Activity Report 5.26.09

We here at MAAR trust you enjoyed a relaxing and respectful Memorial Day weekend. For the week ending May 16, there were 1,960 new listings, 10.2 percent less than the same week in 2008. The decline in new listings has helped improve the larger picture of total active listings.

Inventory is being sold through at a rate that is still flying high above last year’s numbers. Breaking the 1,200 pending sales threshold for the first time in three years, the 1,235 pending sales occurring during the most recent reporting week is up 36.9 percent over the same week last year. While many of these sales are lender-mediated properties, the increase in sales is welcome news regardless.

The decline in new listings, coupled with increased pending sales, has resulted in active listings supply dropping significantly. A year-over-year comparison of active listings from last May reveals a drop of 20.5 percent, bringing our Supply-Demand Ratio down to a healthy 5.23 houses for sale per buyer.

The rebalancing is beginning but the journey back will be slow. It appears that enough houses will soon be off the market, thus creating a rebalancing of the buyer-seller mix and a reversal in price trends.

Click here to access the full Weekly Market Activity Report.

May Monthly Skinny Video Online!

This month's Monthly Skinny Video is online! This edition is another quickfire update on the market, this time narrated by our Immediate Past-President Kevin Knudsen (aka "K-Knud" of "K2"). You'll also spy some zany British Chimney Sweep vocal stylings from our own Robyn Chargo.

Feel free to share this wherever and whenever you'd like.

Click here to view the video in a separate screen or just click the embedded clip below.

Weekly Market Activity Report 5.18.09

1,004. 1,046. 1,083. 1,078. 1,120. 1,185.
 
Notice a pattern? That's the number of signed purchase agreements each of the last six weeks in the Twin Cities housing market, growing most weeks as the spring buyer market heats up. The 1,185 pending sales during the week of May 9 were a robust 26.6 percent higher than the same week in 2008. Over the last three months, there have been 2,228 more pending sales than the same period last year.
 
There are some caveats to this good news:
 
1) Traditional home sales (excluding foreclosures and short sales) over those last three months are down 17.6 percent from a year ago.
2) Sales above $190,000 are down 19.2 percent from a year ago.
3) Sales of new construction homes are down 16.8 percent from a year ago.
 
Looking through a sharper lens is sometimes the best way to fully understand market dynamics. Take a look at our Housing Supply Outlook and foreclosures and short sales report to learn more.

Click here for the full Weekly Market Activity Report.

The 100+ is Updated for May

Want to know how many houses have sold year-to-date in Eagan? Or if its taking longer to sell a house in Saint Louis Park this year than last year?

Of course you do. You're only human.

That's why we've got "The 100+," our free monthly market update tool that provides housing market info for over 205 communities in the Twin Cities metro area. Just updated yesterday morning, you can find the latest info by clicking here.

Home sales hot streak continues into spring heat

We released our monthly stats news release today. Here's what we said:

April home sales in the Twin Cities were even stronger than March's upswing. There were 5,211 pending sales in April, up 23.8 percent from last April. This is the highest showing of signed purchase agreements in April since 2005 and the tenth consecutive month of year-over-year increases.

Of the month's pending sales, 46.0 percent were lender-mediated foreclosures and short sales—down from the last few months as more traditional properties are sold during the spring selling season but up from last year at this time.

The supply of homes for sale continues to experience sluggish growth this spring. There are currently 26,410 homes for sale in the Twin Cities, up 416 units from last month and down 18.4 percent from this time last year. The number of houses for sale for each buyer, as measured by our Supply-Demand Ratio, sits at 5.23 for May—down 28.6 percent from this time last year.

The median sales price for all properties in April of $153,000 is down 25.2 percent from a year ago. While this figure is mathematically correct, it is conceptually flawed. Since a higher share of sales this April were lender-mediated than last April, the number is skewed downward. The median April sales price of traditional homes was $205,000, down 8.5 percent from a year ago. Lender-mediated homes posted an April figure of $120,000, down 21.5 percent from a year ago.

Weekly Market Activity Report 5.11.09

Not everyone is thrilled by increasing numbers, but what they represent in the Twin Cities housing market is nothing to worry for 108 minutes over. Two increases—pending sales and housing affordability—are indicating improvement in the local housing market.

There were 1,120 pending sales for the week ending May 2, a healthy 26.3 percent above last year at this time. The Housing Affordability Index, now at 219, is 45.5 percent above where it was a year ago.

Active listings continue to underwhelm at 26,450, a decrease of 19.5 percent from last year. The lower figure, coupled with increased sales, has in turn helped to create a Supply Demand Ratio of 5.02 for April—31 percent lower than last year. Combining this with the 24.5 percent drop in Months Supply of Inventory over the past year could speak to the amount of houses (and foreclosures) remaining on the market that are selling through.

We don't want to get too far ahead of ourselves, but this could also usher in some new construction for the summer period. According to the Builders Association of the Twin Cities, there were 419 residential units permitted in April 2009, an increase of 43 percent over March 2009. You don't have to be able to read hieroglyphics to see that within these numbers there could be some optimism found in what was once Lost.

Click here for the full Weekly Market Activity Report

May Housing Supply Outlook

The May Housing Supply Outlook is live all up in the interwebz. As usual, here's a quick feel for what to watch for in this in-depth, detailed look at supply and demand in the Twin Cities. Lately, there appears to be a jumbo-sized problem with home sales (if you know what we mean):

While it's certainly welcome news that home sales are up in the Twin Cities metro, there's a big caveat to keep in mind pertaining to price points. All of the growth in sales can be found in the lower price ranges where, not coincidentally, foreclosure and short sales are more common.

The largest drops in home sales can be found in the price ranges above $350,000 where, not coincidentally, higher jumbo mortgage rates are charged to borrowers.

The inventory of homes for sale is now lower than it was a year ago for every price range except homes under $120,000, where it is still up 38.1 percent from this time last year.

Click here to view the full Housing Supply Outlook.

Weekly Market Activity Report 5.4.09

We trust that you had a good May Day, International Worker's Day or early Cinco de Mayo celebration. Whatever your cause for celebration, the Twin Cities housing market did not take a holiday. During the week ending April 25, pending sales posted their fourth consecutive week of more than 1,000 sales, a feat not accomplished since 2006. The 1,078 sales represent a 34.1 percent increase over the same week last year.
 
Supply remains a different story. New listings were hitting the market at a robust pace last spring, but activity has been comparatively tepid this year. New listings are 16.4 percent behind one year ago and the overall supply of homes for sale trails last year by 19.0 percent. We have remained near 26,000 homes for sale for most of this year, betraying the healthy seasonal growth we typically see this time of year.
 
Yes, supply is down, but there's still plenty of inventory out there. April's showers are behind us, the Housing Affordability Index is stratospherically healthy, low mortgage rates persist, and a first-time buyer tax credit remains in effect. At this clip, your buyers could certainly find May flowers blooming in front of their newly purchased homes.

Click here for the full Weekly Market Activity Report.

Minneapolis and Saint Paul: Partners in Foreclosure Absorption

Our two central sister cities—Minneapolis and Saint Paul (what, you were expecting Lakeville and Burnsville?)—have launched an ambitious collaboration designed to encourage consumers to purchase homes within their borders. With lender-mediated properties comprising a healthy chunk of the homes for sale in each city, we have to assume that the effort is motivated in part by a desire to see those properties become owner-occupied.

The fruits of their labor is a now-live website called LiveMSP, and it gives users the opportunity to learn more about any of the 80-plus neighborhoods in the two cities (here's the page for Powderhorn Park in Minneapolis, for example), as well as every financial incentive for home ownership or renovation available.

From a Strib story on the subject:

With thousands of foreclosed homes -- about 3,000 in Minneapolis and 2,000 in St. Paul -- the website, in conjunction with many new financing programs, is the latest weapon aimed at spurring home sales.

"This is the first time all this information has been pulled together, and the first time that Minneapolis and St. Paul have used social networking sites to promote housing,'' said Natalie Fedie, a project coordinator at the St. Paul Department of Planning and Economic Development.

All in all, the level of collaboration is impressive and should be applauded. As a long-time urban dweller who's lived in both cities, it's fun to see the two work together.

Click here to access LiveMSP.com and learn more.

Weekly Market Activity Report 4.27.09

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

Click here for the full Weekly Market Activity Report.

Gallup: Jump in Home Buyer Confidence

Each year, the Gallup organization takes a poll of thousands of consumers to get a feel for whether or not they think it's a good time to buy a house.

Not surprisingly, the numbers have taken a beating the last three years. In 2008, the percentage of respondents who believe that it was a good time to a buy a house stood at 53%, the second lowest mark since 1979 (the dreaded era of 14%+ mortgage rates). This year? It skyrocketed up to 71%. The visual, courtesy of Gallup:

 

Boom-shakalaka.

Weakened consumer confidence in housing has long been a hurdle to reviving home sales activity. It likely took the same media coverage of falling housing prices that REALTORS® are often quick to rail against as "negative hysteria" to spur consumers into actually believe that it was a good time to buy again.

Department of Duh: Web Searches for Interest Rates Way Up

Another great piece from the always-interesting Hitwise Intelligence blog, which tracks the online search activity of consumers all over the world to get a feel for what we're interested in.

The folks at Hitwise compared the historical interest rates from the Bank of England with the amount of search activity that involved "interest rates" to see if there's a correlation. And, well, duh: when mortgage rates go down, search activity goes up. The visual:

While this post is based on search behavior from the UK, as opposed to North America, the trend lines are probably similar in our neck of the woods. There's been a huge uptick in searches for mortgage rates, which also helps explain the massive growth in loan applications and the recent jump in home sales.

Weekly Market Activity Report 4.20.09

Hopeful signs of a Twin Cities housing market recovery carry on thanks to a combination of no growth in the spring supply of homes for sale and still-improving sales figures.

Helping to keep inventory down is slow new listing activity, a metric that has been sluggish all year. For the week ending April 11, there were 20.7 percent fewer new listings than there were during the same week in 2008. Pending sales are still trending in the opposite direction, up 21.9 percent in year-over-year numbers to 1,046 for the week. That's only the second week of 1,000-plus pending sales or more since May 2007. If these two metrics persist, the market could be in for some serious re-balancing.

With the Housing Affordability Index reaching 218—an increase of 40.8 percent over last year—it seems to be an awfully good time for buyers to get off the wall and on the dance floor...being mindful that 29.1 percent of the dance partners are lender-mediated.

Click here for the full Weekly Market Activity Report.

Finding Price Bottoms: Months Supply of Inventory for Foreclosure and Short Sales

We announced yesterday that the number of foreclosures and short sales on the market in the Twin Cities has dropped over 1,200 units from February to April. That's undoubtedly a valuable measurement, but it also helps to look at metrics that take into account both supply AND demand like Months Supply of Inventory (MSI) to get a feel for where we're at in this market cycle.

A quick review on MSI: MSI measures the amount of time (in months) that will take the current number of homes for sale to sell through completely given the current sales rate. The higher the number, the more supply there is relative to demand, the tougher it is for sellers, the longer it takes to sell a house. The lower the number, the less supply there is relative to demand, the easier it is for sellers, the less time it takes to sell a house.

A market that's balanced between buyers and sellers is considered one in which there is roughly a 5- to 6-month supply of homes for sale.

So, what has the recent drop in inventory of lender-mediated properties meant for MSI in the Twin Cities market? Take a look:

In the last year, the MSI of lender-mediated properties has dropped 66.2 percent from an extreme buyers market of 15.6 months supply to a relatively balanced market of 5.3 percent. The traditional market has dropped very slightly from 9.7 months to 9.5 months.

What does this picture look like historically? Glad you asked. Take a gander at this here chart:

 

Lender-mediated MSI reached a peak of about 18 months supply during 2006. Since then its been on a general path downwards despite growing inventory thanks to increasing sales. The traditional market has been on a general path upward during that time period, though it appears to have plateaued somewhat this year.

Important takeaway #1: The foreclosure and short sale segment is not a buyer's market anymore and likely will become a seller's market in 2009, which will likely lead to a price bottom for that segment.

Important takeaway #2: The traditional market still sits firmly in the buyer's market category with 9.5 months of supply. Further price declines should be expected.