The Skinny

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The MAAR Team

Pick of the Week – City of Waconia

With Taste of Minnesota moved to Waconia due to flooding, perhaps it’s a good opportunity to offer up a taste of the Waconia housing market. Inventory has been in the spotlight lately, so let’s look at the number of active listings in Waconia. Overall inventory levels have increased 5.7% from last year. It’s important to dig beyond the headline numbers and kick over some stones to see what lies beneath. Looking at the chart, the number of previously-owned properties on the market in Waconia has risen 13.6% from the same period last year. During that time, new construction inventory levels have fallen 21.9% though they’re still above their valley reached in late-2011. Encouraged by recent price increases, rising rents and an improved economy, existing homeowners are more eager to list their homes for sale. Homebuilders are more risk-averse, new construction inventory appears tepid but stable. That’s likely to change as population levels continue to grow and inventory remains tight—though there are signs that’s improving throughout the Twin Cities metro area.

Pick of the Week – Hiawatha Neighborhood

With Minnehaha Creek at its highest level ever from the heavy rainfall, the Hiawatha neighborhood in the Longfellow Community of Minneapolis is a tad soggy these days, but still a tremendous place to call home. The below charts clearly show new listing activity shifting away from foreclosed and short sale properties and back toward the traditional segment. This is consistent with the trend around the city and metro area, though it’s not quite ubiquitous.

Overall, new listings were up 8.9% to 122 for the 12-month period ending May 2014. But digging deeper, Foreclosure new listings were down 21.4%; short sale new listings were down 12.5%; traditional new listings were up 16.7%. The last time there were this many traditional sellers was September 2008. This is great news for homeowners and for home prices since traditional listings tend to sell at significantly higher price points than distressed properties.

Thirsty for more? You can literally generate millions of different charts by clicking on the “Infosparks” link once you’re logged into Northstar or on any listing page. Or you can access the tool from the MAAR homepage. Happy researching! And stay dry out there.

 

Weekly Market Activity Report

Some economists do not believe that housing has established enough upward momentum to warrant a declaration of recovery, yet many market analysts are observing the rule of The Tortoise and the Hare. Fast, energetic upward spikes in sales may be exciting, but slow and steady wins the race. This phase of stabilization will likely show itself in year-over-year comparisons that cause yawns, but this kind of race is ultimately good for the market as a whole.

In the Twin Cities region, for the week ending June 14:

• New Listings increased 5.9% to 2,076 • Pending Sales decreased 4.1% to 1,267 • Inventory increased 6.5% to 16,857

For the month of May:

• Median Sales Price increased 8.2% to $210,000 • Days on Market decreased 7.0% to 80 • Percent of Original List Price Received decreased 0.2% to 96.8% • Months Supply of Inventory increased 8.3% to 3.9

 

Weekly Market Activity Report

Price growth. It has been the result of low inventory in the market these days, and it would appear that the duration of the summer market will continue to see an increase in year-over-year median sales price. If inventory makes a significant leap, perhaps we'll see a different sort of impact on housing prices. Until then, the longer buyers wait, the more risk they take of paying a little bit more for that house key.

In the Twin Cities region, for the week ending June 7:

• New Listings increased 10.3% to 2,154 • Pending Sales decreased 0.7% to 1,283 • Inventory increased 6.2% to 16,453

For the month of May:

• Median Sales Price increased 8.2% to $210,000 • Days on Market decreased 7.0% to 80 • Percent of Original List Price Received decreased 0.2% to 96.8% • Months Supply of Inventory increased 8.3% to 3.9

Pick of the Week – City of Shakopee

With a May 2014 median sales price within $500 of the broader Twin Cities metro, it’s tempting to think that Shakopee is a typical poster child for the metro. It’s anything but. According to the Metropolitan Council and the Census, Shakopee nearly doubled its population between 2000 and 2010. It’s one of the fastest growing cities in the metro, situated in one of the fastest growing counties in the country. In May 2014, the number of homes for sale in Shakopee increased at a rate nearly three times that of the metro (19.7% vs. 6.9%). Perhaps more importantly, all of the increase in Shakopee came from traditional homes—which increased almost 54.0%. If it weren’t for foreclosure and short sale inventory declining (which is a good thing), that 19.7% market-wide figure would have been even higher.

Twin Cities Has Largest Pool of Homes for Sale in Almost a Year

House hunters in the 13-county Twin Cities metropolitan area are finally getting more to choose from. Inventory levels were up 6.1 percent to 16,368 homes for sale in May 2014. This comes as new listings were up 3.0 percent to 8,572 and pending sales were down 9.0 percent to 5,260. Even though overall buyer demand remains below 2013 levels, it's still well above 2011 and 2012 levels. Moreover, buyer demand increased for traditional homes.

Absorption rates actually slowed to 3.9 months of supply, thanks to recent inventory increases. Even with more supply and less demand, the mix of sales continues to skew away from distressed properties and toward traditional homes that sell at higher price points. Consequently, the median sales price rose 8.2 percent to $210,000 – the highest May median sales price since 2007 and tied for the highest median price for any month since December 2007.

Though new listings rose 3.0 percent compared to last May, traditional new listings rose 14.1 percent while foreclosure and short sale new listings fell 44.0 percent and 47.7 percent, respectively. Similarly, though pending sales were down 9.0 percent, traditional pending sales rose 0.7 percent while foreclosure and short sale pendings fell 39.3 percent and 47.3 percent. And again, overall inventory was up 6.1 percent but traditional inventory was up 25.9 percent as foreclosure inventory fell 36.6 percent and short sale inventory plummeted by 53.6 percent.

With inventory up, consumers now have the largest pool of homes for sale in almost a year. Inventory hasn't shown this many consecutive year-over-year increases in about 3½ years. Perhaps more importantly, a larger share of that inventory falls under the more desirable traditional segment.

"Yes there's more inventory, but not in all areas or price points," said Emily Green, President of the Minneapolis Area Association of REALTORS® (MAAR). "The lack of supply is really starting to weigh on consumers and on sales numbers. This market has been supply-constrained for long enough, but the trend is moving in a positive direction."

As a result of this ongoing shift toward higher-priced and higher-quality product, the median sales price for the metro rose 8.2 percent to $210,000. That now makes 27 straight months of year-over-year price gains. Also helping along price recovery is the fact that foreclosures and short sales made up only about 10.0 percent of all new listings and about 15.0 percent of all closed sales. Those are the lowest figures since October 2007 and May 2007, respectively.

Homes continued to sell quickly, as days on market was down 7.0 percent to 80 days, on average. Sellers are receiving an average of 96.8 percent of their original list price. The Twin Cities now has 3.9 months' supply of inventory, just a tad higher than last May and consistent with this phase of market recovery.

"More inventory really is a good sign," said Mike Hoffman, MAAR President-Elect. "But housing relies heavily on the economy. That said, job growth, unemployment, consumer confidence and family financial situations must continue to show improvement."

Pick of the Week - Neighborhood of Prospect Park

This week we are keeping the spotlight on inventory. With the Green Line (FKA “Central Corridor”) opening this Saturday, Prospect Park and other University Avenue neighborhoods are surrounded by new sights, sounds and opportunities. Some of those new sights and opportunities include more homes for sale on the market. In fact, while metro-wide inventory levels were up 6.1 percent in May, the number of active listings in Prospect Park increased 25.0 percent. As rising prices continue to lift some homeowners out from underwater, more owners have the opportunity to sell and move up the housing chain, thereby further freeing up much-needed inventory at the more affordable end of the market. | MORE INFO 

 

Pick of the Week - City of Mound

“So how’s the market?” Some agents are asked this every day. The answers can range from “good” and “favorable” all the way to “historically affordable” and “my seller sold their house in 4 hours”. Perhaps the best answer is “It depends.” On what, you ask? Market performance is dependent upon many things, including but not limited to geographic area, market segment, time period, data source and more.

We’re shining the spotlight on a different metric in a different area each week. This week, we’re looking at inventory in Mound. Inventory in Mound is up 18.9% since May 2013, compared with a +4.0% increase for the entire Twin Cities region. Many consumers are eagerly watching inventory numbers for signs of additional properties for sale. With these early increases, an emerging pattern may just be upon us. Those shopping for one of these homes in Mound, try to stay out of Lake Minnetonka for a few weeks.

 

Weekly Market Activity Report

Higher prices gave sellers reason for optimism in early 2014. As prices stabilize, some are sensing the formation of a counter-trend. Silly rabbits. Price alone does not determine the state of the housing market. Number of sales by housing segment, the types of households being formed and the availability of well-paying jobs all play important roles to housing health. As the summer months approach, things like inventory of homes for sale, new listings and number of days on market until sale, along with pricing, will help predict the direction of the housing market.

In the Twin Cities region, for the week ending May 17:

• New Listings increased 10.0% to 2,039 • Pending Sales decreased 8.3% to 1,175 • Inventory increased 4.1% to 15,432

For the month of April:

• Median Sales Price increased 7.5% to $196,129 • Days on Market decreased 8.2% to 89 • Percent of Original List Price Received decreased 0.1% to 95.9% • Months Supply of Inventory increased 2.9% to 3.5

May Skinny Video

Where has the Twin Cities real estate market been and where is it heading? This monthly summary provides an overview of current trends and projections for future activity. Narrated by Cotty Lowry (2014 Treasurer, Minneapolis Area Association of REALTORS®), video produced by Chelsie Lopez.

Weekly Market Activity Report

Market normalization and an improved product mix is presented as housing weakness by some. However, price increases, demand and an improving national economic scene paint a brighter housing landscape. According to the Mortgage Bankers Association, total week-over-week mortgage application volume rose 5.3 percent on a seasonally adjusted basis. The trends for the drivers of new housing starts are as important as the trends within residential real estate. Where you find money and jobs, you find a fruitful housing market.

In the Twin Cities region, for the week ending May 3:

• New Listings increased 1.4% to 1,856 • Pending Sales decreased 13.4% to 1,203 • Inventory increased 2.6% to 14,688

For the month of April:

• Median Sales Price increased 7.6% to $196,425 • Days on Market decreased 8.2% to 89 • Percent of Original List Price Received decreased 0.2% to 95.8% • Months Supply of Inventory remained flat at 3.4

Traditional Sales Dominating the Housing Market

Home sales in the 13-county Minneapolis–St. Paul metropolitan area have appeared lackluster of late on the surface, but if you turn the dirt, you'll see more intriguing colors in the flowering market mix. Overall closed sales were down 11.9 percent to 3,806 for April 2014, but traditional sales were actually up 1.4 percent. The total was brought down by a 41.8% decline in foreclosure sales and 40.8% decrease in short sales.

Increased seller activity is critical to replenishing inventories. New listings rose 10.2 percent to 7,776 newly listed homes, a welcome sign for prospective buyers. Inventory levels are still constrained, but consumers should have more options to choose from this year than last year.

With higher prices and more buyers on the prowl, more sellers are able to go the traditional route. Traditional new listings rose 25.7 percent compared to last year at this time, while foreclosure and short sale new listings fell 41.6 percent and 49.6 percent, respectively.

On the demand side, pending sales declined 3.9 percent to 5,127 properties overall, once again reflecting less distressed market activity. Traditional pending sales were up 8.2 percent while pending foreclosure and short sales fell 40.4 and 35.1 percent, respectively. The inventory of homes for sale in the Twin Cities is now at 14,429 properties, 1.5 percent more than last year at this time, marking the first year-over-year increase since October 2013 and the largest increase since January 2011.

"We're seeing the return of a real estate market led by traditional listings and sales," said Emily Green, President of the Minneapolis Area Association of REALTORS® (MAAR). "Coupled with more inventory – attractive inventory – it's setting up to be an exciting year for buyers and sellers."

As a result of the ongoing shift in the types of homes being sold, the median sales price for the metro rose 8.0 percent to $197,000. That's 26 straight months of year-over-year price gains. Foreclosures and short sales now make up just 11.4 percent of all new listings. Last April, they made up 22.4 percent. For closed sales, the number fell from 31.3 to 20.9 percent.

On average, homes spent 89 days on the market, down 8.2 percent from last April. Sellers are receiving an average of 95.9 percent of their original list price. The Twin Cities now has 3.4 months' supply of inventory, the same mark that it was last April.

"Distressed inventory has made up the majority of the lower price ranges, and that market is evaporating," said Mike Hoffman, MAAR President-Elect. "We can anticipate more negotiations and transactions with people rather than banks."

All information is according to the Minneapolis Area Association of REALTORS® (MAAR) based on data from NorthstarMLS. MAAR is the leading regional advocate and provider of information services and research on the real estate industry for brokers, real estate professionals and the public. MAAR serves the Twin Cities 13-county metro area and western Wisconsin. 10K Research and Marketing, LLC is a wholly owned subsidiary of MAAR.

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Weekly Market Activity Report

 

There have already been a few items to watch in the burgeoning spring market, particularly around price, sales and inventory. Median sales prices are on the rise while sales have been a wee bit stubborn emerging from winter hibernation. Meanwhile, more choices are still needed for eager buyers. There's still plenty of time for the market to catch fire, and there's no reason to believe that it won't.

In the Twin Cities region, for the week ending April 26:

• New Listings increased 25.6% to 1,906 • Pending Sales decreased 2.4% to 1,212 • Inventory increased 0.5% to 14,318

For the month of March:

• Median Sales Price increased 7.6% to $189,950 • Days on Market decreased 12.0% to 95 • Percent of Original List Price Received remained flat at 95.0 • Months Supply of Inventory decreased 3.0% to 3.2

 

April Skinny Video

Where has the Twin Cities real estate market been and where is it heading? This monthly summary provides an overview of current trends and projections for future activity. Narrated by Emily Green (2014 President, Minneapolis Area Association of REALTORS®), video produced by Chelsie Lopez.