The Skinny

Weekly Market Activity Report

When compared to the previous week's dive, pending sales held strong during a time of typical seasonal swoon. For the week ending November 21, there were 604 purchase agreements, a 5.2 percent increase over the same week in 2008 and the first time in a month not to show a week-over-week plunge in sales activity.

Although sales are up over last year, they have slowed considerably from October's tax credit gold rush. With the winter season before us, sales will likely continue their respite into 2010.

Click here for the full Weekly Market Activity Report.

 

Weekly Market Activity Report

Home sales in the Twin Cities region have dropped significantly in recent weeks as the tax credit's extension temporarily reduces urgency and autumn's typical slowdown sets in. For the week ending October 14 there were 603 signed purchase agreements, down 7.1 percent from the same week last year. That's the first year-over-year decline since last October. Previous weeks leading up to the tax credit extension were showing 40 percent increases or higher.
 
The slowdown in sales has been expected. Said Lawrence Yun, Chief Economist for the National Association of REALTORS®, "Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month. A measurable decline should be anticipated." Our local market isn't always in line with the national message, but we have to agree on this one.
 
New listings continue to underperform 2008 figures, which is keeping inventory low. There were 1,208 housing units added for the week ending November 14. Total active inventory for the current week is down more than 20 percent from last year.

Click here for the full Weekly Market Activity Report.

November Monthly Skinny Online

The November Monthly Skinny Video is up on the interwebz. This month's edition is another quickfire update on Twin Cities market trends, this time with an emphasis on what the tax credit extension/expansion might mean for the next 6 months.

This one is narrated by...me. Don't make fun of my Midwestern brogue too heavily, please.

Click here to view or just check the embedded clip below.

Weekly Market Activity Report

With the home-buyer tax credit now expanded and extended, sales activity in the Twin Cities region slowed down as expected for the week ending November 7. And by "slowed down," we mean it "only" posted a 17.2 percent year-over-year increase as opposed to last week's 42.9 percent year-over-year increase. So we're being openly facetious; market activity is still robust despite the respite from urgency.
 
New listings were down 14.3 percent for the same time period comparison, but the expansion of the tax credit to provide $6,500 to move-up or move-down buyers may create more new seller activity in the coming months.
 
And for the first time in several years, new listings may actually be welcome. The region has shed more than 12,000 units of inventory since the supply peak in September of 2007. In the lower price ranges, buyers are facing a shortage of good inventory. See page 6 of our Housing Supply Outlook for a more detailed look.

Click here for the full Weekly Market Activity Report.

Heavy Buyer Activity Continues in October

Low mortgage rates, affordable supply and the home buyer tax credit kept home sales moving in October.

There were 4,676 signed purchase agreements during the month, up 34.4 percent from a year ago—the 16th consecutive month of year-over-year increases in pending sales. The recent extension and expansion of the home-buyer tax credit should mean continued buyer movement into early 2010.

Traditional pending sales (excluding foreclosures and short sales) were up 55.0 percent from last October, a sure sign that demand is beginning to spill over into that segment.

The October median sales price of $169,000 is a slight dip from the prior month, but the dip is much less extreme than typical entering the fourth quarter. Compared to last October, it's a 6.1 percent decline—the lowest year-over-year decline in 24 months.

The median sales price of traditional homes in October was $193,500, down 13.2 percent from a year ago. Lender-mediated homes posted a October figure of $129,000, down 4.4 percent from a year ago.

Foreclosures are still selling much more frequently than short sales, bringing the months supply of foreclosures to 1.4, while short sales still have 13.2 months of supply. More information on these market segments is available with the October 2009 Update to Foreclosures and Short Sales in the Twin Cities.

Good news for sellers: Homes are selling quicker and sellers are receiving closer to their original asking price than they were a year ago. But the experience varies by price point. For example, activity in the upper-bracket price ranges is still pretty slow.

The lower and middle price brackets will probably see a lot of movement over the next nine months," said MAAR President-Elect, Brad Fisher. "If you're a buyer in those ranges, action is your best weapon."

Weekly Market Activity Report

The Twin Cities housing market continues to post strong pending sales figures as fall progresses. For the week ending October 31 there were 826 pending sales. That’s down from the week before but 42.9 percent greater than the same week last year.

The extension and expansion of the tax credit means that first-time home buyer activity will remain strong, but don't bank on the same blockbuster numbers we have seen this year. If you were a potential first-time home buyer who was qualified to purchase in 2009, odds are good that you already bought. The fact that the income limits have been raised for eligibility does help since it widens the credit's availability.

The $6,500 credit for second-time buyers will spur some sellers to put their homes on the market who had previously been on the fence. New listings will likely strengthen this winter and into early 2010 as a result.

Some updated numbers for this month:

• Days on Market is still shrinking, down to 128. That’s 9.4 percent below last October.
• The Percent of Original List Price Received bumped up to 94.6.
• The Housing Affordability Index increased to 202, up 25.5 percent increase over 2008.

Click here for the full Weekly Market Activity Report.

What the Tax Credit Extension/Expansion Means for the Local Market

Not sure if you've heard about this tax credit extension thingy? Maybe? The bill passed yesterday. Now first-time buyers have until April 30, 2010 to sign a purchase agreement and still be eligible for their $8,000 credit.

The real kicker here, though, is the expansion of the bill to assist second-or-third-time buyers. Those folks will receive a $6,500 tax credit when they sign a contract on a home before April 30 as long as they've bought and lived in a home for 5 consecutive years during the last 8 years. The National Association of Realtors has put together some nice answers to Frequently Asked Questions on this specific portion of the bill, which you can access here.

And here's a general overview of the entire bill, top-to-bottom.

We know you've been inundated with news on this thing for months, from the time the first rumblings and rumors of an extension were being discussed until today, when the bill was finally passed. There's little value in us regurgitating links to you from other sources that have already deftly covered the process of how this sausage was made. What we can do is provide some quick thoughts on this is going to affect the local housing market over the next 9 months.

First, you can assume that first-time home buyer activity will remain strong, but don't bank on the same blockbuster numbers we saw this year. If you were a potential first-time home buyer in the Twin Cities who is qualified to purchase, odds are pretty dang good that you already bought in 2009 to take advantage of the credit. So we have likely sold forward a year into our "inventory" of first-time buyers, and there probably isn't a massive deluge of new ones coming in 2010 considering the sluggish employment picture. The fact that the income limits have been raised for eligibility does help since it widens the credit's availability.

Second, the $6,500 credit for second-time buyers (move up, move down, move sideways, what have you) will spur some sellers in the low-to-mid price ranges to put their homes on the market who had previously been on the fence. To someone in a negative equity position, even $6,500 can be the little boost you need to help cover the loss you're going to take on the sale. Time will tell how many new sellers or move-up buyers this will create, but we know that it does provide some legitimately attractive incentives that some consumers will find hard to ignore. Prepare yourself to work with those types of consumers immediately.

And quite honestly, getting some more supply available for sale in the lower price ranges would be a very good thing. As we've noted before (and others have as well) there's very little supply left below $200,000.

November Housing Supply Outlook

The November Housing Supply Outlook just hit the internetz. As usual, here's a few quick takeaways.

Takeaway #1: The market segment that has the lowest months supply of homes for sale? Single-family detached homes under $120,000, which have 2.0 months of supply—an extreme seller's market.

Takeaway #2: The segment with the highest months supply? Single-family detached homes above $1,000,000, which have 37.6 months of supply. Things look even more extreme when you remove new construction properties from the equation—previously-owned homes in this category have 40.5 months of supply. In other words, it's a tough time to be a seller in the luxury market.

Takeaway #3: Sales are up from a year ago for every property type. The biggest growth in sales can be seen in the single-family detached segment, up 19.2 percent from a year ago.

Click here for the full Housing Supply Outlook.

Home Sales over the last 12 months:

 

Weekly Market Activity Report

Did you get all your screams out over the Halloween weekend? Well here’s a scary thought to keep you in the Halloween spirit: we’re running out of homes to sell in the lower price ranges.

For the week ending October 24 there were 926 signed purchase agreements, up a monstrous (get it?) 53.8 percent from a year ago. Over the last three months, sales of homes under $250,000 are up 40.0 percent from the same period during 2008, while sales above that watermark have dipped by 0.3 percent. As a result, compared to a year ago the inventory of available homes below $250,000 has dropped by over 5,300 units.

With the possibility of the federal tax credit for first-time buyers being extended and expanded, there may be significant shortages of inventory for buyers looking in those price ranges as 2010 begins.
 
For November, the overall Supply-Demand Ratio is a paltry 7.69 per buyer, down 29.3 percent from the year prior.

Click here for the full Weekly Market Activity Report.